Republicans proposed cutting four foreclosure relief programs in their new budget (read this coverage here). After all was said and done, two programs ultimately got the axe (or at least are up for cutting so far). The FHA Refinance Program, which enabled underwater homeowners to refinance into a new FHA-insured mortgage as long as the lender wrote off at least 10 percent of the unpaid principal, and the Emergency Mortgage Relief Program (EMRP), which provided unemployed homeowners with “bridge loans” of up to $50,000 and additional payment plans to help them make up delinquent payments and keep current while looking for work, were eliminated by the House Financial Services Committee yesterday. Of course, all this really means is that now the House can debate whether or not these programs will actually be terminated on the floor. Democrats have promised to challenge “any moves to completely scrap the programs” although they are willing to “retool” them.
HAMP and HUD’s Neighborhood Stabilization Progam (NSP) will be debated in committee next week. During debate on the floor, the $1 billion in funding currently allocated to EMRP will be placed on hold. Even though the amount was approved last year during “Wall Street Reform,” none had yet been released to borrowers. The FHA Refinance Program also has had its share of problems with only 44 loans have been refinanced to date.
Do you think that any of these reforms will actually make it into the budget? Should they?
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