WASHINGTON (Reuters) ? The Obama administration's key housing market rescue programs have landed on the chopping block as the U.S. House of Representatives Financial Services Committees scheduled a vote next week to terminate them.The panel's Republican leadership said on Thursday it will consider a bill to kill the Home Affordable Modification Program, which it said has failed to help a sufficient number of distressed homeowners to justify its cost.
It also will vote on bills to shut down a Federal Housing Administration refinancing program and a fund to stabilize neighborhoods suffering from heavy foreclosures. A fourth bill would kill a program to provide 12-month emergency loans to homeowners to stave off foreclosures.
Frankly, though the other programs would be a shame to lose, HAMP would not be a great loss. Thus far it's spent just $840 million of the $29 billion earmarked for it. It was created to provide incentives for mortgage servicers to renegotiate lower monthly payments for homeowners. For too many mortgage servicers, it seems like the incentive has been to rack up fees and rip-off homeowners with little or no oversight or sanctions from Geithner's Treasury Department.
There have been dozens of horror stories that reach the blogosphere and occasionally the traditional media, but this one David Dayen chronicles is undoubtedly one of the worst and worth the read to find out how bad a poorly conceived and administered program can be.
Chances are pretty damned good, however, that the House Financial Services Committee is not going to propose something better, something that might actually help stave off future foreclosures or help anybody now currently facing this legal and financial mess. Which, by the way, is still a national crisis. Or at least it is if you can believe Nobel Prize-winning economist Joseph Stiglitz, who forecasts another two million foreclosures this year.
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