Senators Introduce Own Legislation to End HAMP

With so much attention focused on the House of Representatives' efforts to stamp out four separate federal foreclosure programs, a bill making its way through the Senate - which like its House counterpart would effectually terminate the Home Affordable Modification Program (HAMP) - has received less attention but is progressing nonetheless.

Pundits insisted such legislation would fall flat in the Senate, but key members of the chamber's Banking and Finance Committees are pushing their bill forward on the argument that the free market, on its own, is working where government programs are faltering.
[IMAGE] Last week, Sens. Jim DeMint (R-South Carolina) and Bob Corker (R-Tennessee), both members of the Senate Banking Committee, and Tom Coburn, M.D. (R-Oklahoma), a member of the Senate Finance Committee, introduced legislation that would effectively prohibit any new modification trials from being extended under HAMP. Homeowners already participating in the program, whether through a trial or permanent plan, would continue to receive assistance.

""Congress should move swiftly to end the president's disastrous mortgage program,"" said Sen. DeMint. ""It has funneled millions of taxpayer dollars to big banks and Fannie Mae while taking struggling homeowners on a wild goose chase as foreclosures increase…..[HAMP] has succeeded in pushing hundreds of thousands of Americans closer to foreclosure and personal bankruptcy.""

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In a statement, DeMint notes that over the last two years, HAMP has provided just over 500,000 homeowners with a modified mortgage. In contrast, he says, the private sector completed over 1.2 million proprietary loan mods in 2010 alone.

""Taxpayer dollars shouldn't have been used to finance loan modifications that the private sector is performing on its own far more successfully,"" said Sen. Corker.

DeMint added, ""The real story here is that the free market is working where the government is failing."" ""It's time to stop HAMP from hurting more homeowners and allow the housing market to finally recover without the government picking winners and losers.""

The HAMP Termination Act (S. 527) sponsored by DeMint is identical to a House bill (H.R. 839) aimed at ending the administration's flagship mortgage assistance program, which is scheduled for a House vote after lawmakers return from next week's recess. The Senate bill currently sits with the Senate Banking Committee.

Assistant Treasury Secretary Tim Massad testified before the Senate Banking Committee Thursday that before HAMP, the mortgage industry was “ill-equipped and unwilling to respond to the foreclosure crisis.”

“Terminating HAMP would prevent us from helping tens of thousands of additional families each month [and] relax the pressure on mortgage companies to offer better assistance to struggling homeowners,” Massad said.

Multiple reports have implied that legislation to end HAMP will never take off in the Democratic-controlled Senate, but the action taken last week by DeMint and his colleagues indicates it's not altogether a non-issue for the chamber.

The White House has threatened to veto any bill that would end HAMP and other federal housing programs, but the frenzy of political activity centered on the federal modification program in recent weeks is a clear indication that lawmakers want something to change, and fast.