The House of Representatives late Tuesday voted to kill HAMP, the White House's signature loan modification program and to stop the administration from spending more TARP funds on foreclosure prevention programs.
The Home Affordable Modification Program (HAMP) is the "poster child for ineffective government programs," declared Rep, Spencer Bachus, R-Ala., chairman of the House Financial Services Committee. "It doesn't work and has actually made things worse for many struggling homeowners."
To date, HAMP has helped nearly 600,000 mortgagors stay in their homes by reducing their monthly payments an average of $500. However, it's fallen far short of its initial goal of helping 3 million struggling borrowers. (One complaint about the program is that too many applicants who entered the three-month payment trials failed to get a permanent modification after using up their savings.)
The House voted 252-170 Tuesday evening to kill HAMP, but the Senate is unlikely to pass the bill (H.R. 839).
The White House has already threatened to veto the measure if it reaches the President's desk. "As tens of thousands of responsible American homeowners struggling with their mortgages receive permanent assistance each month from HAMP, the administration believes that continuation of HAMP is important to the nation’s economic recovery," the White House said in a statement.