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Saturday, April 2, 2011

House Votes to Scrap Foreclosure Program

House Votes to Scrap Foreclosure Program 

Republicans, ignoring a veto threat from the White House, pushed a bill through the House on Tuesday that would eliminate a foreclosure prevention program that provides financial incentives to mortgage servicers who modify loans for homeowners who are behind on their payments.
The House voted 252-170, mostly along party lines, to terminate the $30 billion Home Affordable Modification Program and redirect unspent funds toward reducing the deficit. Republicans argue that the program forces taxpayers to bail out banks at a time when budget cuts are needed to strengthen the economy. The lawmakers also say the program has failed to prevent many foreclosures and has left some homeowners worse off.
Representative Judy Biggert, a Republican from Illinois, described the program as one that was “set up in haste” and had “done little to restore stability in the market.”
“We need to stop funding programs that don’t work with money we don’t have,” she added, repeating a refrain Republicans have used often in the budget debate.
Republicans introduced an identical bill last week in the Senate, although the Democrats who control the chamber have so far shown no inclination to follow the House’s lead. The White House has said the measure will be vetoed if it reaches President Obama’s desk. Democrats, who acknowledge the program’s shortcomings, say repealing the program would eliminate a viable alternative to foreclosure and further undermine the housing market recovery.
“Yes, the HAMP program has a lot of problems,” said Representative Barney Frank, a Massachusetts Democrat, on the House floor. “But, the absence of any program leaves homeowners worse off.”
The vote is the fourth time this month that House Republicans have approved eliminating government assistance for homeowners and neighborhoods that have seen property values fall since the housing bubble burst.

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