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Reuters reports: "The US House of Representatives on Tuesday voted to kill President Barack Obama's signature program to help struggling homeowners avoid foreclosure. A bill to terminate the program was approved on a 252-170 vote. But the bill is unlikely to clear the Senate."

In Boulder, Colorado, the true cost of the Foreclosure Crisis becomes clear as a disabled former homeowner is awakened to a Sheriff's eviction, 12/11/09. (photo: John Moore/Getty Images)
In Boulder, Colorado, the true cost of the Foreclosure Crisis becomes clear as a disabled former homeowner is awakened to a Sheriff's eviction, 12/11/09. (photo: John Moore/Getty Images)



House Votes to Kill Main Obama Foreclosure Aid

By Corbett B. Daly, Reuters

30 March 11


RSN Special Coverage: GOP's War on American Labor

 

he US House of Representatives on Tuesday voted to kill President Barack Obama's signature program to help struggling homeowners avoid foreclosure.

A bill to terminate the program was approved on a 252-170 vote. But the bill is unlikely to clear the Senate.

It was the last in series of four measures brought forward by newly empowered House Republicans to end government assistance for homeowners hurt by the housing crisis.

Republicans argued the foreclosure prevention plan, known as the Home Affordable Modification Program, is ineffective and not worthy of taxpayer support amid soaring budget deficits. The vote broke largely along party lines.

The program, which offers incentives for lenders to modify loans, was launched to great fanfare in the spring of 2009. The Obama administration had hoped it would permanently lower mortgage payments for 3 million to 4 million homeowners.

But fewer than 600,000 borrowers have received permanent loan modifications, and the program has been widely criticized as ineffective from critics on both the left and the right.

"The HAMP program is a failure," said Representative Patrick McHenry, the North Carolina Republican who sponsored the bill. "If we can't eliminate this failed program, what program can we eliminate?"

Analysts see the votes as an effort by Republicans, who last seized control of the House in an election in November with an anti-bailout, anti-spending message, to score points with their political base.

The White House has already threatened to veto the measure. However, it is unlikely to come to that since Democrats, who retained control of the Senate, largely opposed the measure. Both the House and Senate would have to approve the bill for it to reach the president's desk.

About $30 billion has been set aside for the program from the government's $700 billion financial rescue fund, but only about $1 billion of that has been spent so far.

Democrats argued the program should be fixed, not killed.

"The absence of any program leaves people worse off," said Representative Barney Frank, the top Democrat on the House Financial Services Committee.

Even as the Obama administration argues for keeping HAMP in place, it is pressing forward on a separate track that could result in much larger aid for struggling homeowners.

Big US banks are meeting with federal officials and state attorneys general at the Justice Department on Wednesday as they negotiate what could turn into a multi-billion dollar settlement over alleged abuses by the companies that collect mortgage payments.

The banks and authorities are expected to discuss a settlement proposal that the state officials sent out earlier this month, which called on banks to treat borrowers better and to reduce loan balances for some struggling homeowners.

A group of 50 state attorneys general and about a dozen federal agencies are probing bank mortgage practices that came to light last year, including the use of "robo-signers" to sign hundreds of unread foreclosure documents a day.

On March 3, state attorneys general leading the probe sent banks the outline of a proposed settlement endorsed by some federal agencies, including the Justice Department, the Housing and Urban Development Department and Treasury staff setting up the Consumer Financial Protection Bureau.

The banks that received the proposal and that will have representatives at Wednesday's meeting are Bank of America Corp, JPMorgan Chase & Co, Citigroup Inc, Wells Fargo & Co and Ally Financial, according to sources briefed on the meeting.

(Additional reporting by Dave Clarke; Editing by Carol Bishopric)

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+8 # Activista 2011-03-30 09:32
Program was misused by big banks - they were preventing completion on some small administrative picks - in many cases seeded up foreclosure.
Instead of bailing out banks - congress should bailed up foreclosures - real people who live in their houses for years.
 
 
+8 # Kayjay 2011-03-30 12:44
More of the same old b.s. from those compassionate House Republicans. I am really tired of all the corporate coddling which leads to cutting needed programs for masses. As to GOP claims that HAMP is ineffective, how much foot dragging or outright sabotage have they orchestrated? It seems the GOP loves to say...."I've got mine....tooooo bad for you."
 
 
+4 # todd williams 2011-03-30 13:39
I say fully fund the program, repair its flaws and move forward. Screw the Repugs! They're nothing but scammers, cheats, liars and fools.
 
 
+2 # alice 2011-03-30 17:06
The HAMP program serves banks/lenders and their investors. Lenders no longer have any liability since they've sold the loans to investors. Loan mods that I've seen may lower monthly payments, but the amount owed is tacked onto the end of the loan so it's really digging homeowners deeper into debt. Sometimes interest rates are lowered for a set amount of time. Some people in extreme circumstance may have some of the debt written off, but it's a last resort for banks and doesn't happen often. Banks have spent money to set up whole call centers just to deflect the inquiries of homeowners seeking loan modification or seeking answers about the progress of their particular case. The program IS a mess and does need fixing so that it serves the homeowners. Banks and investors are fully capable of taking a loss. Debt forgiveness has, in the past, been the way of re-starting the US economy and should be used now to help homeowners -- after all, we now know they DIDN'T cause this economic crisis.
 
 
+1 # KittatinyHawk 2011-03-30 17:58
Again look at what your pensions, investments are in. Start asking questions. When you read, comment that is nice but it takes a movement to get anyone to take you seriously.
Want to stop the wrong ones from being disclosed on...find out who is playing with your money, where it is going, how they vote. Start writing into Newspapers in areas where foreclosures are numerous...writ e in. But remember like in any War, there are those who do this foreclosure thing as a sport.
Get information an do something, question authority, go to local government, state reps, senator offices. Get noticed in going. It will not fall on deaf ears. Make them uncomfortable. We take videos to our meetings, and we take recorders. That way we can record and use the words against them. You have the right to record a meeting. Time you start doing so. Should be doing it in Wisconsin.
Governor even hinting at violence should be impeached.
Do not forget Realtors. They are the problem as much as their buddies the banks. Why does no one discuss this. They do not care about your situation only their commission. Most sell you homes with problems knowingly! People could get them really well and just do not. Realtors like Engineers, lie.
 
 
+2 # jon 2011-03-30 21:10
A simple thing we can all do: move your banking from any commercial bank to a local credit union. It is easy, and if enough of us do it, another form of strike.
 

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