Treasury official urges Congress to keep foreclosure prevention program
House Republicans pushed through legislation tonight 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.
A Treasury Department official visiting Harvard today urged Congress not to end the program.
Terminating the program "would immediately relax the pressure on mortgage companies to offer better assistance to struggling homeowners,'' said Tim Massad, the Treasury's Acting Assistant Secretary for Financial Stability and the administrator for the Troubled Asset Relief Program, in a speech at Harvard's Kennedy School. "It would create unnecessary hurdles
for those seeking relief, and it would remove a path to recovery for the tens of thousands of American families who are still joining the program every month."
The Treasury's Home Affordable Modification Program, known as HAMP, was created to encourage lenders to make mortgage terms more affordable for homeowners struggling to avoid foreclosure. The program, however, has been criticized as cumbersome and ineffective. The program initially aimed to assist as many as 4 million homeowners, but in fact has led to just 600,000 loan modifications.
The Obama administration said in a statement today that it "strongly opposes" the House bill, and that, if it reaches him, the president would veto it.
Governor Deval L. Patrick, in a letter on Monday, urged lawmakers to reject the measure, saying, "Now is not the time to withdraw federal support for foreclosure mitigation programs."
The letter, addressed to Representatives Barney Frank, the Newton Democrat, and Spencer Bachus, the Alabama Republican who chairs the House Financial Services Committee, said the HAMP program had helped 13,500 Massachusetts residents reduce their mortgages and stave off foreclosure.
Patrick sent copies of his letter to the entire Massachusetts
delegation, including Senators John F. Kerry and Scott Brown, as well as
Republican and Democrat leaders of the House and Senate.