Foxx votes to eliminate failed, bailout-era program; bill saves $29 billion
Bill prevents nearly $29 billion dollars in new spending
Washington, DC – March 30, 2011 – (RealEstateRama) — Congresswoman Virginia Foxx (NC-5) voted today for a bill that ends a failed government mortgage modification program, saving taxpayers up to $29 billion. The program, known as Home Affordable Modification Program (HAMP), came into existence in 2009 and is widely criticized by government watchdogs like the Government Accountability Office (GAO). The bill, HR 839, passed the House 252-170.
“Ending this failed program will save taxpayers money and halt a government program that gives 1000’s of homeowners false hope,” Foxx said. “By almost any measure HAMP is a wasteful program that for many homeowners doesn’t even prevent a foreclosure. At a time when the federal government is borrowing more than 40 cents of each dollar it spends, we’ve got to stop shelling out taxpayer money for programs that aren’t working.”
HAMP originally aimed to help 4 million homeowners avoid a foreclosure. Instead, fewer that 550,000 have had permanent loan modifications under the program and many of these loans have returned to default status. According to the Treasury Department, every loan successfully modified under the program costs taxpayers $20,000.
The Inspector General for the program testified before Congress that HAMP “benefits only a small portion of distressed home
owners, offers little more than false hope, and in certain cases causes more harm than good.” The Congressional Oversight Panel also found that high re-default rates “signal the worst form of failure” and that “billions of taxpayer dollars will have been spent to delay, rather than prevent, foreclosure.”
“If Washington can’t end a broken program, how are we going to make the real difficult choices to overcome today’s over-spending and record budget deficits?” Foxx said. “Getting serious about eliminating failed government programs is just one of many steps we must take to get our fiscal house in order.”
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