Update (3/17/11): The House of Representatives Republican majority voted on Wednesday to withdraw funding for HUD’s Neighborhood Stabilization Program. The vote was largely along party lines. The measure is not likely to be heard in the Democrat-led Senate.
Last week, the House of Representatives voted to end two foreclosure prevention programs and intends to vote to end two others. The programs are:
- FHA Short Refi program (house voted to terminate it last week)
- Emergency Homeowner Loan Program (House voted to cancel last week)
- Neighborhood Stablization Program (NSP)
- Home Affordable Modification Program (HAMP)
The House is currently considering a bill to rescind $1 billion in funding for HUD’s Neighborhood Stabilization Program and will vote after next week’s recess on ending HAMP. All four programs are likely to never make it to a Senate vote. However, if the act to eliminate HAMP does pass the Senate, President Obama has said he would likely veto it.
Last week, House Republicans voted largely along party lines to terminate two programs they feel have been unsuccessful, or too costly. On Thursday, the House passed the FHA Refinance Program Termination Act (H.R. 830), which would eliminate the FHA “short” refinance program. The program, which launched last September, requires investors in mortgage-backed securities to reduce the borrower’s primary mortgage by at least 10 percent to help homeowners whose property values have fallen drastically. On Friday, the House passed the Emergency Mortgage Relief Program Termination Act (H.R. 836), which would eliminate the yet-to-be-launched Emergency Homeowners’ Loan Program, a program funded under the Dodd-Frank Act that provides mortgage payment assistance to unemployed homeowners.
Today, the House of Representatives is expected to vote on terminating HUD’s Neighborhood Stabilization Program (NSP). Republicans argue that the program is too costly during a time of record deficits while Democrats argue that taking away the program takes away a tool that cities can use to mitigate the impact of foreclosures in their neighborhoods.
The vote to terminate HAMP was scheduled to occur later this week but has been postponed until after next week’s recess. The HAMP Termination Act of 2011 (H.R. 839), which has been widely criticized by Republicans and Democrats alike for severely under performing, will likely by passed by the House but according to a source will be “dead on arrival” in the Senate.