Dem Reps Rebel Over Mortgage Program
Eighteen Democrats went against the wishes of the White House by voting yesterday for the termination of the Home Affordable Modification Program (HAMP), a centerpiece of the Obama administration’s efforts to combat foreclosures.
Under the HAMP program, eligible candidates would have their mortgage payments limited to no more than 31% of their gross income over the course of five years. But the program has fallen far short of expectations: though initially expected to help three to four million households facing foreclosure, only about 540,000 households have received permanent loan modifications.
Earlier this month, TARP Inspector General Neil Barofsky testified before Congress saying that the program was “clearly a failure”.
And yet, when voting to eliminate the $30 billion program, House members did so in the face of a direct veto threat issued by the President.
The eighteen Democrats who bucked the party line did so for a variety of reasons, and while most declined to speak out publicly against HAMP even after their vote, there were some exceptions.
Rep. Dennis Cardoza (D-CA) told FrumForum through a spokesperson that the program as another in a series of troubled programs:
HAMP is another one of the Administration’s half-baked programs that has failed to deliver results to the people who are most in need, and has in fact left many people worse off than they were before they entered the program. We need to scrap this failed program and dedicate to funding economically responsible initiatives that will actually reach those homeowners who are suffering the most.
Nevada Representative Shelley Berkley’s (D-NV) office referred us to her comments in the Las Vegas Review-Journal, where she was a bit less critical of the administration – arguing that HAMP gave too much power to banks. “It's time we find other ways to address this need," she told the Review-Journal. "Despite the best intentions of the administration, the most common stories I hear from Nevadans about HAMP involve lost paperwork and failed home loan modifications."
Indeed, of the $1.4 million temporary mortgage modifications attempted under the program, around 800,000 have failed to become permanent.
Much of the opposition that Democrats have with HAMP has to do with the complaints on how the program has been executed in practice. "What we saw was just a commonality of abuse by servicers, the banks, of our constituents," Rep. George Miller (D-CA) told the Huffington Post. "They were being lied to. Their documents were being lost on a regular basis. Their phone calls were not returned. They were told they'd be handed off to another person, that never took place. They were told they would be eligible in a couple months, that never took place."
The Republicans currently have a package of four bills addressing HAMP, each of which would put an end to the program – and each of which have been threatened for veto by President Obama.
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