Our Terms of Service and Privacy Policy have changed.

By continuing to use this site, you are agreeing to the new Privacy Policy and Terms of Service.

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

Index Last Change % Change
Dow 17,084.49 33.74 0.20%
Nasdaq 4,830.47 19.68 0.41%
S&P 500 2,014.89 1.46 0.07%
Treasuries 2.10 -0.01 -0.43%
Data as of 4:06pm ET
Company Price Change % Change
Alcoa Inc 10.26 -0.75 -6.81%
Bank of America Corp... 15.58 -0.17 -1.08%
Apple Inc 112.12 2.62 2.39%
EMC Corp 27.86 0.68 2.50%
Freeport-McMoRan Inc... 13.49 0.03 0.22%
Data as of Oct 9


Michael Dell is on the verge of the biggest tech deal ever. But he needs to raise a ton of debt before the market's next freakout. More

Federal Reserve Vice Chairman Stanley Fischer told CNN International anchor Richard Quest that concern's about China's slowdown is pushing back the Fed's decision to raise rates. More

Elon Musk recently called Apple a "Tesla graveyard" that hires all the employees he's fired. But now he says he doesn't hate Apple. More

Yes, the new chip-enabled credit cards are more safe than what used to be in our wallets. But they aren't bullet-proof against fraud. More