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Congresswoman Waters Blasts Republicans for Voting to Dismantle Programs that Help Homeowners Avoid Foreclosure

March 3, 2011
Press Release

Congresswoman Maxine Waters (D-Calif.), a senior member of the Financial Services Committee, took Committee Republicans to task today for voting to defund two programs that help struggling homeowners.

"I am very disappointed in my colleagues on the opposite side of the aisle, who in their mania to achieve fiscal austerity at all costs, moved to cut two nascent programs designed to really help struggling homeowners," said Congresswoman Waters. "The reality is that homeowners in all 50 states, in urban cities, suburban communities, and rural areas, are struggling. They're not just Democrats or Republicans, they're Americans who by and large, through no fault of their own, either lost their jobs or their houses went underwater."

Republicans voted to terminate the Federal Housing Administration (FHA) Short Refinance program. Under the program, investors agree to write down at least 10 percent on the borrower's mortgage.  In exchange, the borrower is refinanced into an FHA loan.  Borrowers must be current on their mortgage, and federal funds are only spent in the event of a borrower default.  The program is an important option to have available for borrowers and numerous institutions, including Wells Fargo and GMAC/Ally, have recently agreed to participate in the program.

Republicans also voted to end the Emergency Homeowners Relief Program, which provides low-cost loans to unemployed homeowners to help them pay their mortgage. It is based on a highly successful program in Pennsylvania, which has helped 42,700 people since 1983. Congresswoman Waters was instrumental in getting this program included in the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010.

"In 2008 we were willing to spend almost $800 billion to save the ‘too big to fail' financial institutions that drove our economy into a ditch. But evidently, Congress is not willing to extend a mere pittance of that to help homeowners stay in their homes. And these programs have barely even gotten off the ground."

Congresswoman Waters continued, "This is just part one of the Republican assault on homeowners and working-class people.  The same attitude that led Speaker Boehner to say ‘so-be-it,' in response to news that the Republican budget would eliminate jobs, is fueling the Republicans' ‘repeal-but-don't-replace' agenda on foreclosure assistance. Next week they plan to undo the Home Affordable Modification Program (HAMP), without recognizing that we need more incentives to get servicers to do loss mitigation and loan modifications, not less. They have also targeted the Neighborhood Stabilization Program (NSP), a program I authored, which has really helped communities turn around after being devastated by foreclosures and blight.

"I will passionately defend these programs and any government assistance that helps people facing desperate situations."