By
updated 3/30/2011 10:46:34 AM ET 2011-03-30T14:46:34

House Republicans pushed through legislation Tuesday to terminate an underachieving Obama administration program designed to reduce mortgage payments for homeowners in danger of losing their homes to foreclosure.

Most Democrats, while acknowledging that the Home Affordable Modification Program has fallen short of original goals, protested the vote to kill it. The White House, in a statement, said that if the bill ever reaches President Barack Obama's desk, his senior advisers would recommend he veto it. The vote was 252-170.

  1. More must-see stories
    1. The Hartford Courant, Political
      Wild Wall St.

      Has the market volatility got you nervous? These cartoons may give you a little comic relief.

    2. Cyber-thieves create fake Kelley Blue Book site
    3. US says Reebok toning shoes don't really
    4. Can you live on $9 an hour? Play the game

The GOP-led House this month has voted to kill three other programs aimed at reviving the struggling housing market, including one to aid homeowners who have lost their jobs or become sick and another helping state and local governments buy and revamp abandoned properties. All face veto threats in the unlikely event they clear the Senate, but they have given Republicans a platform to show their commitment to ending inefficient or expensive federal programs.

The HAMP program, said Rep. Judy Biggert, R-Ill., chairwoman of the House Finance Committee's housing panel, is "a poster child for failed federal foreclosure programs."

HAMP, enacted two years ago with funds from the Troubled Asset Relief Program, offers incentives to loan servicers to modify loans for people having trouble making payments. But the Treasury Department has no authority to compel banks and loan servicers to participate, and so far the program has only modified about 600,000 loans, well below the 3 million to 4 million anticipated.

Rep. Patrick McHenry, R-N.C., the sponsor of the bill, claimed that a majority of those who enter the program end up being harmed because they use up savings and damage credit ratings during months of waiting, and then are rejected for permanent reduced loans.

But Democrats questioned that conclusion and said Republicans were killing the program without offering an alternative. "Rather than try to get the program right we abandon all those people who are underwater," said Rep. Keith Ellison, D-Minn.

Fifty House Democrats led by Rep. Maxine Waters of California on Monday wrote Treasury Secretary Timothy Geithner urging him to "act as quickly as possible" to overhaul the program. "It is important to contrast these 600,000 modifications with the approximately 5 million foreclosures that have been completed since the program started," they wrote.

Rep. Barney Frank of Massachusetts, top Democrat on the Finance Committee, also denied that the program was a burden on taxpayers, saying that any TARP money spent and not returned to taxpayers when it ends in 2013 will be provided by large financial institutions.

Biggert said the program already has given out about $840 million out of the $30 billion in TARP funds available. The Congressional Budget Office said termination would save the government $1.4 billion over 10 years.

Frank's office said the median savings to homeowners receiving modifications is $527 a month, and 85 percent who received trial modifications were able to get permanent changes in their loans. Money is given out only after a trial period during which homeowners show they can make the modified mortgage payments.

© 2013 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

Discuss:

Discussion comments

,

Most active discussions

  1. votes comments
  2. votes comments
  3. votes comments
  4. votes comments

Data: Latest rates in the US

Home equity rates View rates in your area
Home equity type Today +/- Chart
$30K HELOC FICO 1.97%
$30K home equity loan FICO 5.80%
$75K home equity loan FICO 4.54%
Credit card rates View more rates
Card type Today +/- Last Week
Low Interest Cards 13.70%
13.70%
Cash Back Cards 17.66%
17.91%
Rewards Cards 17.05%
17.17%
Source: Bankrate.com