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Posted at 5:48 PM ET, 03/10/2011

House votes to end foreclosure-assistance program

By Felicia Sonmez

The House on Thursday voted to end the Federal Housing Administration Refinance Program, one of two federal foreclosure-assistance programs on the chopping block this week.

The measure, H.R. 830, passed on a 256-to-171 vote, with 18 Democrats breaking ranks to join Republicans in backing it. One Republican, Rep. Joe Heck (Nev.), joined Democrats in opposing the proposal; Heck represents Nevada's third district, which was the district hardest-hit by foreclosure in 2010.

The bill, sponsored by Rep. Bob Dold (R-Ill.), would end the FHA's short-refinance program, which was authorized under the Troubled Asset Relief Program. The program has used only $50 million of the more than $8 billion that has been set aside for it, leading to criticism from Republicans that it ought to be terminated and the money used to pay down the federal deficit.

The Senate is unlikely to take up the bill, however, and the White House earlier this week issued a veto threat.

"As nearly one quarter of American homeowners are currently underwater on their mortgages, the Administration believes that continuation of the FHA refinancing programs is vital to the Nation's sustained economic recovery," the White House said in its statement of administration policy.

In his statement heralding the vote Thursday evening, House Speaker John Boehner (R-Ohio) made no reference to the bill's goal of ending the FHA short-refinance program and did not mention the words "FHA" or "mortgage." Rather, he cast the bill as a "vote to begin shutting down TARP."

"I'm pleased the House has voted to save taxpayers billions of dollars by beginning to shut down the TARP bailout program," Boehner said. "The American people understand we can't continue spending money we don't have, especially on things that don't work. That's why we're focusing not just on discretionary spending, but mandatory spending as well. Unfortunately, the Democrats who run Washington believe in this time of fiscal challenges we should continue propping up government programs that overspend and underdeliver."

Democrats earlier this week pointed out that Boehner himself was a vocal supporter of TARP in the fall of 2008.

House Minority Whip Steny Hoyer (D-Md.) said in a statement after the vote that lawmakers must do more to address the country's foreclosure crisis, "but the Republican housing bills on the floor this week are not the answer."

"By only proposing to terminate housing programs and not offering any solutions of their own to help responsible middle class American families stay in their homes, these bills are not the way forward," Hoyer said. "So far, Republicans have not put forth a jobs plan, have not put forth a real health care reform plan and today, it is clear they have no plan to help middle class families stay in their homes."

A second foreclosure-assistance measure, H.R. 836, would end the Department of Housing and Urban Development's Emergency Homeowners' Relief Program, an initiative that was created in 1975 but had remained unfinanced until the Dodd-Frank Wall Street Reform and Consumer Protection Act reauthorized it last summer.

A vote on that bill is expected on Friday.

By Felicia Sonmez  | March 10, 2011; 5:48 PM ET
 
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Comments

Unemployed, homeless and poor. Just they way the secret, ultra-rich Republican backers like their American workforce. They just shut up and do what their told that way.

next they'll try to pass legislation requiring working papers in order to vote. You'll owe your soul to the Company Store.

They can always pray.

Posted by: thebobbob | March 10, 2011 6:27 PM | Report abuse

first they do away with rules so that banks can sell people fraudulent misleading loans. Then when people can't pay the loans back they take away the program that prevents them from becoming homeless which then makes them a drain on taxpayer dollars because now they will qualify for government assistance. All in the name of $50 million spent which is something like .0000000000000000000000001% of the deficit.

Would it not be better to let the banks take the loss rather than the citizens?

Posted by: ianshmian805 | March 10, 2011 9:05 PM | Report abuse


It is fantastic time to refinance home mortgage. As Clark Howard says it is very tough to find these low rates for long time. Search online for 123 Mortgage Refi they found me THE lowest possible rate.

Posted by: briangarza49 | March 11, 2011 1:06 AM | Report abuse

Well if only $50million has been used out of $8billion, and we have been in this foreclosure mess for some 3years, then something is definitely wrong with the program. That is the inescapable conclusion that any open minded person can have. More than likely because it was a creation of the Congress and micro-managing Executive Branch, we got a duck-billed platypus of a program. It is neither fish nor fowl. At this point, I must agree to get rid of the program, it is not doing what its intended purpose is.

Posted by: RedRat | March 11, 2011 1:57 PM | Report abuse

The reason the program did not work is Republicans would not agree to regulations of the program guaranteeing the banks would actually offer it. The gov't was only allowed to offer "suggestions" how to run the program (which means Repubs killed the program before it got started). Banks got to choose whether to use the gov't sugggestions or make up their own. Making up their own meant, hundreds of paperwork "disappeared" so people were not qualified. New tables for qualifications were made up (usually in favor of a no rather than a yes). To make the program work, regulations must be imposed - banks must follow these. It's a good program, it not only keeps people from having to foreclose but will help the housing market because it will not be inundated by houses that banks will sell cheap. But, in their hatred for regulation, Republicans have once again made a program fail. Now, they're trying to do away with it before someone realizes why it failed. Kind of like SS.

Posted by: Indy60 | March 11, 2011 6:21 PM | Report abuse

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