The House GOP will start hearings to decide if they should stop “failed and ineffective” housing programs. This is another Obama signature program that is being scrutinized, specifically for homeowner relief. The four plans included in the program are:
1. Emergency Homeowner Relief Fund – offers mortgage relief payments to those close to foreclosure;
2. Neighborhood Stabilization Program – designed to help neighborhoods that have an abundance of abandoned homes or foreclosures;
3. Federal Housing Administration Refinance Programs, and
4. Home Affordable Modification Program (HAMP) – designed to help homes be more affordable to homeowners by modifying the mortgage.
There have already been more than 500,000 changes under HAMP. So the program has been able to help a small amount of homeowners keep their houses but there are millions more who have gone through foreclosure. Special Inspector General Neil Barofsky has deemed it a “failure.” Republican Rep. Spencer Bachus says, “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.” If the plans are closed down about $38 billion could be saved because of the remaining and unspent funds.
The GOP recently announced that they are trying to get a $20 billion settlement against mortgage lenders that are accused of not following proper foreclosure procedures. It’s said that they want to either collect the $20 billion or make the banks modify their loans.
Democratic Rep. Maxine Waters thinks that the Treasury should fine the mortgage services and use those funds to help homeowners. She stated, “These monetary penalties could be redirected for any number of purposes, including increasing legal services funding so that homeowners can be adequately represented by counsel in foreclosure.”
The decision to end these programs is not an easy one and it is being criticized by members of both parties.
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