House Votes to End Loan Modification Program
The US House of Representatives voted on Tuesday to halt President Obama’s much-criticized foreclosure prevention program called the Home Affordable Modification Program. The vote pretty closely followed party lines, with 252 voting to end the program and 170 voting against its early termination.
HAMP, as the program is commonly referred to, has been criticized from multiple directions for falling way short of its intended goal of obtaining meaningful modifications to outstanding home loans of 3 to 4 million Americans. In pre-vote debate, Republicans Representatives outlined the latest statistics for the program to illustrate its ineffectiveness.
Since being launched in 2009, the program has helped less than 600,000 homeowners obtain permanent modifications to their home loans, and more than 800,000 have had modifications canceled. “The intent was to help homeowners, but two years after the fact we’re left with the cold hard fact that this program has hurt more people than it’s helped,” said Rep. Patrick McHenry, sponsor of the HAMP Termination Act. Despite the bill’s easy passage through the House, however, the bill is unlikely to pass through the Democrat-controlled Senate and would almost certainly be vetoed by the President.
Consumer advocacy groups have attributed the program’s failure to the fact that banks who violate its guidelines have not been punished in any way by the US Treasury, which administers the program. Treasury, meanwhile, explains that it can’t punish the program’s violators because participation in the program is voluntary.