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.
Kyle Bass is the founder and chief investment officer of Hayman Capital Management. More
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