financialservices.house.gov
Cmte Financial Services (R)
Contact:
Witnesses Announced For Subcommittee Hearing on Legislative Proposals To End Failed Foreclosure Programs
Washington, Mar 1 -
The HAMP Termination Act ends the Treasury Secretary’s authority to provide new assistance under the program but preserves assistance already offered to homeowners through HAMP prior to the bill’s enactment. ###
The bills would terminate the Home Affordable Modification Program (HAMP), the Neighborhood Stabilization Program, the FHA Refinance Program, and the Emergency Mortgage Relief Program.
Witnesses scheduled to testify at the Subcommittee hearing are:
The Honorable David Stevens, Assistant Secretary for Housing and Commissioner of the Federal Housing Administration, Department of Housing and Urban Development
The Honorable Mercedes M. Marquez, Assistant Secretary, Community Planning and Development, Department of Housing and Urban Development
Matthew J. Scirè, Director, Financial Markets and Community Investment, U.S. Government Accountability Office
Katie Jones, Analyst in Housing Policy, Congressional Research Service, Library of Congress
“We need to break down barriers that have delayed the housing recovery, including expensive and ineffective government programs that have failed to help homeowners. Unfortunately, these programs were set up in haste, executed poorly, and have done little to restore stability in the marketplace,” said Chairman Biggert. “A government program that spends more to save a single borrower than it costs to buy a home is no help at all – it’s just a waste of taxpayer money. We need to stop funding programs that don’t work with money we don’t have.”
“In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners,” said Chairman Bachus. “These programs may have been well-intentioned but they’re not working and, in reality, are making things worse.”
Information on the four bills:
The Neighborhood Stabilization Program Termination Act. Congress has appropriated $7 billion for the Neighborhood Stabilization program, including $2 billion in the Obama Administration’s stimulus plan. Two rounds of NSP funding have already been provided to states and localities. The Neighborhood Stabilization Program Termination Act ends the program and rescinds the unobligated third round of funding of $1 billion.
Critics have argued that the NSP does not benefit at-risk homeowners facing foreclosure, and may instead create perverse incentives for banks and other lenders to foreclose on troubled borrowers – arguably worsening the housing crisis.
The FHA Refinance Program Termination Act terminates the program and rescinds unobligated funding. The price tag for this program is $8.12 billion, of which only $50 million has been disbursed thus far. For this large outlay, the taxpayers have seen minimal return on their investment. As of December 13, 2010, only 35 applications had been submitted for this program.
The Emergency Mortgage Relief Program Termination Act ends the program and rescinds unobligated funding. The Dodd-Frank Act reauthorized the long-expired Emergency Homeowners’ Relief Act of 1975 and provided $1 billion to authorize HUD to make emergency mortgage relief payments to homeowners facing foreclosure for up to 12 months, with a possible extension of another 12 months. These loans will serve to increase the amount of the borrower’s indebtedness, so a borrower who is unable to pay back either the original amount of principal or the additional loans made under the program will be worse off in the long run.