Republicans prepared to 'pull the plug' on Obama housing relief

House Republicans are setting their sights on programs set up by the Obama administration to help struggling homeowners, saying it's time to "pull the pug" on efforts that aren't working.  

A key House committee announced plans Thursday to mark up legislation that would eliminate four of the administration's housing programs. The funding for the housing efforts totals $45 billion. 

Financial Services Committee Chairman Spencer Bachus (R-Ala.) announced Thursday that his panel would consider legislation on March 3 that would shutter four programs designed to assist struggling homeowners, deeming them failures.

"It's time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners," he said. "These programs may have been well-intentioned, but they're not working and, in reality, are making things worse."

Specifically, the panel will move on four bills. Each would shut down an administration program and rescind the money allocated for the effort.

At the top of the committee's list is the HAMP Termination Act. The Home Affordable Modification Program is a cornerstone of the administration's efforts to assist homeowners struggling with their mortgage payments. Included as part of the Troubled Asset Relief Program (TARP), HAMP was designed to help 4 million homeowners modify their mortgages to make them more affordable and to keep them in their homes.

However, while several programs authorized under TARP have been successful, HAMP has thus far come up short, assisting just over half a million homeowners make permanent modifications to their home loans. Of the $29 billion set aside for HAMP, just $840 million has been spent, Bachus said.

The administration has acknowledged the program's slow start, but maintained that it is beginning to pick up steam and is helping homeowners.

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The committee will also consider legislation that would terminate the Neighborhood Stabilization Program. That program, administrated through the Department of Housing and Urban Development (HUD), is intended to provide funds to neighborhoods that are struggling with large numbers of foreclosures or abandoned homes in the wake of the housing crisis. The Republican bill would kill the program and rescind $1 billion in funding that has not been spent.

Another bill would terminate a mortgage refinancing program administered by HUD's Federal Housing Administration. Of the $8.12 billion set aside for the program, just $50 million has been sent out the door so far, with just 35 applications submitted for the program as of Dec. 13, Bachus said.

A fourth measure would eliminate the Emergency Mortgage Relief Program authorized by the Dodd-Frank financial reform law. That program gave HUD $1 billion to make emergency mortgage relief payments to homeowners facing foreclosure. But Republicans argue that since the loans offered under that program increase the debt obligations of struggling homeowners, it actually leaves borrowers in a worse position in the end.