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Posted at 1:26 PM ET, 03/ 7/2011

House to vote this week on cutting foreclosure-assistance programs

By Felicia Sonmez

The House this week is expected to take up two measures that would end a pair of federal foreclosure-assistance programs. Votes are expected to come by the end of the week.

The first bill is H.R. 830, the Federal Housing Administration Refinance Program Termination Act. The measure, sponsored by Rep. Bob Dold (R-Ill.), would end the FHA's short-refinance program, which was authorized under the Troubled Asset Relief Program.

Republicans note that of the $8.12 billion set aside for the program, only $50 million has been used; that money has gone toward the refinancing of only 44 loans. Dold's measure would terminate the program and put the unused funds toward paying down the deficit.

The second bill is H.R. 836, the Emergency Mortgage Relief Termination Act, sponsored by Rep. Jeb Hensarling (R-Texas). The measure 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.

The $1 billion program was designed to help unemployed homeowners by giving them 12-month loans that could later be renewed for another 12 months. Republicans took aim at the program, arguing that it increases struggling homeowners' debt burden and "leaves taxpayers holding the bag."

Massachusetts Rep. Barney Frank, the top Democrat on the House Financial Services Committee, has defended both programs and said last month that he was "disappointed" that House Republicans were seeking to end them. Noting that the Emergency Homeowner Relief Fund is similar to other programs in 17 states, Frank called the move to end it "particularly troubling," adding that the program "provides assistance to people who are unable to pay their mortgages not because they were imprudent or irresponsible but because they are unemployed."

"As we continue to respond to the victims of the foreclosure crisis in a responsible way, we will make the case that there are better ways for the federal government to cut spending than by attacking these programs," Frank said.

House Speaker John Boehner (R-Ohio) highlighted Republican efforts to end both programs in a Sunday blog post.

Democrats seized on Boehner's criticism of the FHA Refinance Program as a "taxpayer-funded bailout," pointing out that Boehner strongly urged House members to back TARP in a September 2008 floor speech.

In addition to the two measures on the floor this week, two other bills that would terminate foreclosure-assistance programs will be marked up this Wednesday by the Financial Services Committee.

Those measures take aim at the Treasury Department's $29 billion Home Affordable Mortgage Program, which was instituted in March 2009 and has been roundly criticized, although the Obama administration has defended it; and the $7 billion Neighborhood Stabilization Program, which provides funding to cities that have been hit by widespread foreclosures. Frank has criticized efforts to end the Neighborhood Stabilization Program as "an attack on cities," while Republicans argue that the program does not help at-risk homeowners.

By Felicia Sonmez  | March 7, 2011; 1:26 PM ET
 
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Comments

I'm encouraged that the House is looking hard at some of these worthless programs. Keep it up! The Democrats cannot sustain their support for multi-billion dollar programs that do nothing.

Posted by: exnavyemo1 | March 7, 2011 3:55 PM | Report abuse

Love thy neighbor...

I didn't know we had to make his house payment...

Posted by: UpAndDown | March 7, 2011 4:48 PM | Report abuse

Frank has criticized efforts to end the Neighborhood Stabilization Program as "an attack on cities," while Republicans argue that the program does not help at-risk homeowners.

Please do your homework...the Neighborhood Stabilization Program is not designed to "help at-risk homeowners," it's designed to help cities reduce vacancies and blight. Period. These funds help the homeowners who have stayed in their homes, if you reduce vacancies you can stop the decline in home prices (which helps everyone!). This is not a foreclosure prevention program and it's certainly not a waste.

Posted by: Smart_Gov | March 7, 2011 8:17 PM | Report abuse


Refinancing means taking out a new mortgage with a lower interest rate to pay off your existing mortgage, search online for 123 Mortgage Refinance I got 2.831% rate on refinance!

Posted by: markhead77 | March 8, 2011 2:21 AM | Report abuse

Good --- you're not entitled to a house you can't truly afford.

Posted by: chrojo01 | March 8, 2011 4:48 PM | Report abuse

"These funds help the homeowners who have stayed in their homes, if you reduce vacancies you can stop the decline in home prices (which helps everyone!). This is not a foreclosure prevention program and it's certainly not a waste."

No it doesn't. The only reason they are dropping in the first place is because they were too high to begin with. When they drop to a level that makes sense to buy they will no longer be vacant. This isn't rocket science. These programs do nothing but try to keep a person who cannot afford their mortgage in their home. That is it. I have been renting and saving. At some point I may wish to buy a condo. Does subsidizing someone's home so they can keep their price up help me? The obvious answer is no.

Posted by: jconboy0226 | March 8, 2011 5:24 PM | Report abuse

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