Ending Foreclosure Assistance Programs Right Now Is A Terrible Idea
Though their stated pledges since coming to power have been to 'cut the deficit' and 'create jobs,' House Republicans will soon take a series of votes to further solidify a radical agenda that does neither.
Instead, this week they will bring to the floor two bills -- the Home Affordable Modification Program (HAMP) Termination Act, H.R. 839, and the Neighborhood Stabilization Program Termination Act (H.R. 861) -- to end critical programs that help families and communities reeling from the effects of a financial crisis they didn't create.
Make no mistake; I have been one of the fiercest critics of HAMP in Congress. From the moment the program was created, I noted that because mortgage servicers were not compelled to participate, this program would fall short of its goals. And in the two years that the program has been operational, it's become clear that it's impossible to shame servicers into honoring the program they signed-on to. The inability or unwillingness of the Treasury Department to enforce program rules and police servicer behavior has only made things worse.
Terminating HAMP without a credible and stronger alternative would be contrary to our goal of helping homeowners stay in their homes, despite some of its flaws. Anticipated to spend $46 billion to help approximately 4 million homeowners, the Congressional Budget office now predicts that the program will only spend $4 billion. To date, the program has only completed 600,000 modifications.
Of course, 600,000 modifications are progress. But when you contrast that figure with the 5 million foreclosures that have occurred since HAMP started, it becomes clear that HAMP hasn't done nearly enough.
Even given these shortcomings, I will not vote to terminate HAMP because my Republican colleagues are not prepared to offer an alternative. In fact, they are working to weaken the new Consumer Financial Protection Bureau and undermine any settlement that state attorneys general can reach with misbehaving servicers.
Instead, I will vote to preserve HAMP, while continuing to fight for stronger rules and better enforcement. The Treasury Department should impose steep fines for non-compliance with HAMP rules; end the foreclosure "dual track," or the simultaneous loan modification and foreclosure processes that homeowners must endure; and allow people to seek a third-party, independent opinion when they have been denied a loan modification.
In addition to their no-alternative agenda on HAMP, Republicans will also vote tomorrow to terminate the Neighborhood Stabilization Program, a job-creating initiative which I authored to allow municipalities to access funds to clean up blighted homes and rundown communities devastated by the foreclosure crisis. This comes after their vote last week to end two programs designed to allow unemployed homeowners to access loans -- which they'll eventually pay back -- to make their mortgage payments, and to allow homeowners to refinance into a government-backed loan when their home has gone underwater.
So when Republicans vote tomorrow to dismantle these programs, I want them to be cognizant of and accountable for what they're doing. Amendments that I authored would direct homeowner and community inquiries from Treasury and HUD to our offices so that we can hear directly from constituents who were hoping to access these lifelines.
And I must say, it will be a sad day if we ever have to say to our constituents and our cities, 'Facing foreclosure? Property values driven down by boarded-up, rat-infested homes? Too bad! The programs we put in place to help you weather this crisis no longer exist. Good luck on your own.'