Given that special inspector general Neil Barofsky is currently busy blaming HAMP in large part for his decision to step down from his post, you might not think that anyone would really miss the struggling federal loan modification program if House Republicans get their way and axe it as part of their new budget[1]. At least, that is what Ohio’s Jim Jordan and North Carolina’s Patrick McHenry, who introduced bills to terminate HAMP and three other mortgage assistance programs last week, are hoping. The bills would also terminate the FHA Refinance program and the Neighborhood Stabilization program and put an end to federal fiscal support for the Emergency Homeowners Relief Program.
Chairman of the House Financial Services Committee Spencer Bacchus (R-Ala.) appears to support the move, saying “These programs may have been well-intentioned, but they’re not working.” Bacchus added that he believes they are actually “making things worse”[2]. The Obama administration has acknowledged that HAMP in particular has made a “slow start,” but insists that the program is now “beginning to pick up steam and is helping homeowners.” Given that much of the $28.1 billion net cost for TARP is tied to housing relief programs that offer no “opportunity to recover funds spent,” it is not surprising that these programs would end up in the crosshairs for budget cuts[3].
Do you think that the federal government’s anti-foreclosure programs should be axed?
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[1] http://www.bloomberg.com/news/2011-02-24/u-s-house-republicans-move-to-end-foreclosure-aid-programs.html
[2] http://thehill.com/blogs/on-the-money/801-economy/145901-house-gop-pushing-legislation-to-eliminate-administration-housing-relief-programs
[3] http://whtc.com/news/articles/2011/feb/24/house-panel-may-kill-housing-rescue-programs/
When the government set up these so called programs, they did not set up any type of over seering
identity to make sure that these funds were used correctly to benefit the American people.
Instead our wonderful government put the banks in charge to over look themselves… Thats like putting a fox in charge of the hen house and told to control itself… The money is now gone into the pockets of the banks themselves with no help at all to the home owners.
Lets go ahead and scrap these programs and stop the cash flow into the banks hands and setup a program with an over seer and lets get this money to the people that need it. Our government and court system needs to stop letting these banks and their attorneys from getting away with all the fraud and financial crimes they have committed and do something for the people who make up this country.
If this attitude of for the banks, by the banks continue they will destroy the ones that truly support this country with our blood, sweat, and tears. Lets get it together america…Its for the people, by the people…
The existing federal “mortgage relief” / “anti foreclosure” should be “axed”…but replaced
by one program that includes the following:
Takes back ALL the money given to all the banks that received the gov’t bailout largess.
Uses that repatriated money to fund a Gov’t overseen, not gov’t administered, program
that allows homeowners who wish to preserve their ownership to do so with an efficiently priced,
flexibly amortised payback of 100% of their loan balances with exception of penalties and
extra interest which was occasioned by bank malfeasance.
Allows for homeowners who wish to “walk away”, ie. allow their homes to foreclose to do so,
but with the burden of mandatory,federally registered deficiency judgements except in the case
of mortgage fraud perpetrated by the lender(s).
Recovers all deficiencies from all material, bank perpetrated,mortgage fraud affected loans
from the bank(s) involved.
Might not be a bad idea – the banks then know they have no government hadout to fall back on, and must resolve these problem loans – hopefully before they go to foreclosure. Either way, they must take a write down, but a short sale or a modification is much preferrable than the foreclosure loss – even though they get to charge investors amy fees for holding.