Several federal housing programs came under attack during a hearing Thursday morning titled ""The Obama Administration's Response to the Housing Crisis.""[IMAGE]
Members of Congress challenged witnesses with questions about the effectiveness of several programs, including the Emergency Homeowners Loan Program (EHLP), the Neighborhood Stabilization Program (NSP), the Home Affordable Modification Program (HAMP), and the FHA Short Refi program.
Congress members pointed out that EHLP helped 12,000 homeowners after an original goal to help 30,000. HAMP has achieved loan modifications for about 800,000 homeowners, despite a goal to help about 4 million borrowers. FHA's Short Refi program set an original goal to help 1.5 million homeowners and reached about 300.
Looking to witnesses from HUD, the Treasury Department, and a representative for the NSP, Rep. Judy Biggert (R-Illinois) asked, ""Is there any program that has met its expectations?""
Neil M. Barofsky reiterated Biggert's implication later in the hearing stating, ""It's not just for me to say they're failing. These numbers are unambiguous; they're failing.""
In response to EHLP, Carol Galante, acting Federal Housing Administration commissioner and assistant secretary for HUD, ""acknowledge[d] that HUD could have done a better job to get the program up and running more quickly"" but asserted that HUD helped as many families as it could.[COLUMN_BREAK]
Gelante said the program received a ""tremendous response"" from homeowners, but the number who qualified was ""not nearly as high as we would have liked.""
She believes EHLP could help more homeowners if it were extended.
When Biggert asked how many foreclosures the NSP prevented, witnesses explained that the program is not aimed at foreclosure prevention.
Waters (D-California) came to the defense of the program stating, ""It was designed to stabilize neighborhoods; that's why it's called Ã¢â‚¬ËœNeighborhood Stabilization.'""
Rep. Robert Hurt (R-Virginia) asserted that when the government is borrowing 40 cents on the dollar, spending should be prioritized. He questioned the worth of a program that is not helping to prevent foreclosures.
However, ""Stabilizing the housing market means more than keeping people in their homes,"" countered Andrew Jakabovics, senior director of policy development and research at Enterprise Community Partners, stressing that it also means dealing with communities affected by foreclosures.
One point of criticism for HAMP is that it has not facilitated more principal reductions than it has. Laurie F. Goodman, senior managing director of Amherst Securities Group, believes principal reductions should be mandatory.
While the FHA's Short Refi program was mentioned several times for its failure in even coming close to its original goal to assist 1.5 million homeowners, Gelante said the program should not be abandoned but built upon.
Goodman, on the other hand, said, ""I think we need to focus on doing fewer programs well.""
Goodman expressed her support of a program currently under consideration to sell pools of foreclosed homes to investors to rent.
The bulk sale proposal is the ""most important initiative that's been taken,"" Goodman said.
Baofsky pointed out that a ""silver lining"" to the ""failure"" of the government's housing programs is that in not reaching their goals, they are also not spending as much of the government's and taxpayers' money.