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Human Events...
House GOP Shuts Down
Failed TARP Mortgage Programs
by Emily Miller
03/10/2011
The Republican House terminated a mortgage refinancing program
established by President Obama and rescinded $8 billion in TARP funds
designated for it. The “Federal Housing Administration Refinance
Program Termination Act” passed the House on Thursday by a vote of
256-171, with 18 Democrats voting in favor of it. The unspent
money will go toward reducing the U.S. debt, which is currently more
than $14 trillion.
“I’m pleased the House has voted to save taxpayers billions of dollars
by beginning to shut down the TARP bailout program. The American
people understand we can’t continue spending money we don’t have,
especially on things that don’t work,” Speaker of the House John
Boehner (R.-Ohio) said in a statement. “I hope the Senate will
give these spending cuts the consideration they deserve.”
The “FHA Refinance Program Termination Act,” which was sponsored by
Rep. Robert Dold (R.-Ill.), will still need to pass the
Democrat-controlled Senate.
The White House announced on Wednesday that President Obama will veto
the bill because he believes that “continuation of the FHA refinancing
programs is vital to the nation’s sustained economic recovery.”
The Obama administration established the FHA Refinance Program a year
ago and directed $8.12 billion in TARP funds to finance it. The
program, run by the Federal Housing Administration, uses federal
dollars to allow homeowners who are under water on their mortgages to
refinance.
“The money from this program doesn’t go to the homeowner, it goes to
the lender, it goes to the banks. And who pays for it? The
taxpayers and ultimately our children and grandchildren, because the
federal government borrows 42 cents of every dollar it spends,” said
Financial Services Committee Chairman Spencer Bachus (R.-Ala.).
When the Obama administration created the program, it claimed that it
would help between 500,000 and 1.5 million homeowners. Since it
went into effect in September, however, the program has wasted millions
of dollars on only 44 homeowners.
“This program is already allocated $50 million and has helped only 44
people. Do the math,” said Bachus during the floor debate.
Also this week, the committee passed two bills that end other
ineffective and costly government housing programs and save $30
billion. The bills, which passed the committee on Wednesday,
would terminate the Home Affordable Modification Program (HAMP) and the
Neighborhood Stabilization Program (NSP). The bills will be voted
on by the House next week.
“All who investigate, analyze, or survey this program conclude that it
is an epic failure. The government is offering false hope to
hundreds of thousands of Americans, and it just can’t deliver,” said
Rep. Patrick McHenry (R.-N.C.), who sponsored the bill to end HAMP.
HAMP was announced by the Obama administration in February 2009 and
cost $30 billion in TARP funds. In the past two years, only $840
million of the funds have been spent for the ineffective program, so
the remaining $29 billion in TARP funds will be rescinded.
At the time it was established, the administration claimed that HAMP
would help 4 million homeowners, but instead the program has put many
people in worse financial shape. The program has modified only
521,630 loans, and the re-default rate is high, according to the
committee.
NSP was established by the Obama administration in 2008 to supposedly
help homeowners avoid foreclosure. Instead, the program has only
helped mortgage lenders and real estate speculators, who have used it
to get rid of foreclosed properties at taxpayers’ expense.
Originally funded with $1 billion from the “Dodd-Frank Wall Street
Reform and Consumer Protection Act,” NSP has run out of money twice in
two years. The formerly Democratic Congress gave the program new
funding of $1 billion and then $2 billion from the stimulus
spending. The committee bill closes the failed program and
refuses to add another round of funding.
“We have little to show for the nearly $6 billion of the taxpayers’
money that was spent on this ineffective program. NSP was
inefficient and it did not target resources to those areas with the
most need. Even worse, there was no requirement for repayment of
the allocated funds,” said Rep. Gary Miller (R.-Calif.), sponsor of the
bill to end the program.
The bills this week that rescind billions of dollars in TARP funding
and terminate wasteful programs are part of a larger effort by House
Republicans to stop the out-of-control government spending from the
years in which Democrats controlled Congress.
“Democrats and Republicans alike know that we must stop wasting money
on ineffective government programs and instead focus on improving the
conditions for jobs and income growth,” Dold stated after passage of
his bill.
Read it at Human Events
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