Financial Services Committee Chairman Spencer Bachus has scheduled a hearing and markup for early March to consider four bills that would terminate government-backed loan modification/foreclosure prevention programs that he calls "failed and ineffective."
The four being targeted include the Home Affordable Modification Program (HAMP), the Neighborhood Stabilization Program, Federal Housing Administration (Short) Refinance, and the Emergency Homeowner Relief Fund.
A hearing is set for March 2 with a full committee markup coming the next day.
In September the White House committed $8 billion in funding for the FHA Short Refi program, which has resulted in just 40 loans being funded.
If Republicans are successful in killing HAMP it could result in a major cost savings for the government. The Congressional Budget Office recently estimated that the White House will spend only $12 billion of the $45.6 billion allocated for the program.
To date, private sector loan modifications have dominated the mortgage restructuring landscape with HAMP accounting for four out of every 10 loans.
"In an era of record-breaking deficits, it's time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners," said Rep. Bachus. "These programs may have been well-intentioned but they're not working and, in reality, are making things worse."
Insurance and Housing subcommittee chairman Judy Biggert (R-Ill.) added that, "Unfortunately, these programs were set up in haste, executed poorly, and have done little to restore stability in the marketplace."
