WASHINGTON (CNNMoney) -- The House passed a bill Tuesday to kill a signature Obama administration program that helps homeowners stay in their homes but has faced criticism as ineffective.
The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.
The program taps the federal bailout that saved the big banks, providing incentives to mortgage servicers to modify mortgages for borrowers behind on their payments.
"To many struggling Americans seeking permanent mortgage relief, HAMP offered little more than false hope. More homeowners have been kicked out of the program than have received permanent relief," Rep. Darrell Issa, the California Republican who chairs the House Oversight Committee, said in a statement.
The bill's path in the Senate is uncertain. President Obama has vowed to veto it.
Already, House Republicans have passed three other smaller programs designed to help families and neighborhoods dealing with foreclosure. What makes the HAMP program different is the widespread criticism it has received, from both Republicans and Democrats, for being ineffective.
"It would put an end to the poster child for failed federal foreclosure programs," said Rep. Judy Biggert, an Illinois Republican.
On Tuesday, 50 House Democrats wrote Treasury Secretary Tim Geithner a letter, urging him to reform the program, saying "HAMP must change to meet its potential."
"Yes, the HAMP program has a lot of problems," said Rep. Barney Frank, a Massachusetts Democrat, on the House floor. "But, the absence of any program leaves homeowners worse off."
The outgoing special investigator general for the Troubled Asset Relief Program called HAMP a "failure," in an interview with CNN on Friday. He said it was supposed to help 3 to 4 million underwater homeowners stay in their homes. But so far, it has only managed to help about 500,0000 homeowners.
"It's really one of the deep failures of TARP," said Neil Barofsky, the special investigator general. "TARP wasn't supposed to just help the banks return to profitability, it was supposed to help people stay in their homes."
Treasury has pointed out, on several occasions, that while the HAMP program could be better, it's the only federal program spurring mortgage servicers to help homeowners.
"This is a very difficult housing market to fix, and this program, is at least helping fix it," Timothy Massad, the Treasury acting assistant secretary who is overseeing HAMP, said recently to a Senate Banking panel. "It's not enough. But it needs to be continued so we can try to ease the pain for millions of American families."
The GOP proposal would stop Treasury from being able to help 100,0000 new troubled homeowners, according to the Congressional Budget Office. Treasury spends about $13,000 per homeowner on the program, CBO said.
It would also cut federal deficits, saving a minimal amount, $1.3 billion over the next five years.
Some families are outraged at the sums they've been offered by Lufthansa as compensation for the Germanwings plane crash in March which killed 150 people. More
The Bank of Russia has cut interest rates again and warned the recession is deeper than it expected. More
Uber promises to pour $1 billion into India over next nine months, says the market is a global priority. More
Fast-food chains that operate in more than 30 locations nationwide are the sole target of a new rule in New York to hike their minimum wage to $15. But consumers and small business owners, as well as some employees, may be the ones to pay the price. More
You can't blame it on the economy anymore. More Millennials now have jobs, but are still living at home. More