Republicans attack Obama homeowner relief

By Jennifer Liberto, senior writer


WASHINGTON (CNNMoney) -- In the latest blow to Obama signature programs, Republicans are now aiming to kill several White House plans aimed at keeping underwater borrowers in their homes.

The House GOP announced hearings for next week aimed at ending "failed and ineffective" housing programs.

The four plans on the chopping block include the Home Affordable Modification Program (HAMP), the Neighborhood Stabilization Program, the Federal Housing Administration Refinance Programs and the Emergency Homeowner Relief Fund. The move would save about $38 billion remaining and unspent by the four programs, according to House Republicans.

"In an era of record-breaking deficits, it's time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners," Rep. Spencer Bachus, an Alabama Republican who chairs the House Financial Services Committee, said in a statement.

But unlike other Obama programs that the GOP is targeting -- such as the Consumer Financial Protection Bureau and health care reforms -- the mortgage modification program, in particular, has faced criticism that transcends party lines.

While it has prevented hundreds of thousands of foreclosures, its impact is small compared to the millions of homeowners who fell behind on their mortgages or who have foreclosed anyway. Special Inspector General Neil Barofsky called the program a "failure" and has criticized Treasury for it.

As of Dec. 31, there have been just more than 500,000 ongoing permanent modifications under HAMP, with about 238,000 of those funded by and attributable to TARP, the inspector general's office reported. Barofsky called those figures "anemic."

The GOP announcement targeting housing programs comes after reports that the administration is seeking a $20 billion settlement with the 14 largest mortgage lenders accused of illegally foreclosing on homes in lawsuits, according to the Wall Street Journal, citing unidentified sources.

The administration is reportedly looking to either collect $20 billion in fines or to force the banks to provide a similar amount of loan modifications for underwater homeowners, according to the Journal.

Those reports prompted California Democratic Rep. Maxine Waters to call for Treasury to pursue fines against mortgage services that fail to comply with HAMP guidelines.

"These monetary penalties could be redirected for any number of purposes, including increasing legal services funding so that homeowners can be adequately represented by counsel in foreclosure," she said in a statement. To top of page

Frontline troops push for solar energy
The U.S. Marines are testing renewable energy technologies like solar to reduce costs and casualties associated with fossil fuels. Play
25 Best Places to find rich singles
Looking for Mr. or Ms. Moneybags? Hunt down the perfect mate in these wealthy cities, which are brimming with unattached professionals. More
Fun festivals: Twins to mustard to pirates!
You'll see double in Twinsburg, Ohio, and Ketchup lovers should beware in Middleton, WI. Here's some of the best and strangest town festivals. Play
Index Last Change % Change
Dow 17,131.97 100.83 0.59%
Nasdaq 4,552.76 33.86 0.75%
S&P 500 1,998.98 14.85 0.75%
Treasuries 2.59 -0.00 -0.08%
Data as of 8:10am ET
Company Price Change % Change
Apple Inc 100.86 -0.77 -0.76%
Bank of America Corp... 16.71 -0.03 -0.18%
Yahoo! Inc 42.71 0.16 0.38%
Alcoa Inc 16.16 -0.23 -1.40%
Facebook Inc 76.08 1.50 2.01%
Data as of Sep 16

Sections

When will the Fed raise rates? It all depends on whether the phrase 'considerable time' is or isn't in the Fed's statement. More

Things aren't looking good for Sony -- the Japanese company expects to lose billions of dollars this year, as the global smartphone race heats up. More

Y Combinator president Sam Altman is teaching a startup class at Stanford with Silicon Valley heavy hitters as guest lecturers. Bonus: All the videos will be available for free online. More

Occupy Wall Street offshoot Strike Debt says it has abolished nearly $4 million in private student loan debt for students who attended Everest College, part of Corinthian Colleges. More

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.