The painful effort to cut the federal deficit is putting many programs at risk. One example is the introduction of two bills in the House that would end two foreclosure assistance programs.
The first of these bills is called the Federal Housing Administration Refinance Program Termination Act. It would end a refinancing program that was part of the Troubled Asset Relief Program (TARP) that even Rep. John Boehner, the Republican House majority leader, had voted for when TARP was passed. There were many concerns about the program, however, and very few loans were actually refinanced under it.
The second bill now under consideration, H.R. 836, is called the Emergency Mortgage Relief Termination Act. It would scrap the Emergency Homeowners' Relief Program. This program was created in 1975 but had remained dormant until $1 billion was authorized to fund it last year. It would have given 12-month loans to unemployed homeowners. Loans could be renewed for another 12 months.
The Fate of HAMP
Two other programs may also be discontinued. One is the $29 billion Home Affordable Mortgage Program (HAMP), which has been beset by mismanagement and overly restrictive qualification requirements. The other is the $7 billion Neighborhood Stabilization Program, which would have benefited cities hit hard with large numbers of foreclosures.
Many members of Congress criticized these programs as bailouts that don't work and unfairly burden taxpayers. But Representative Barney Frank, D-Mass., defended the targeted programs as sensible expenditures that would assist cities coping with foreclosures and the costs that come with reduced property taxes.
According to Rep. Frank, the Emergency Homeowner Relief Fund is similar to successful programs in 17 states designed to prevent unemployed homeowners from experiencing foreclosures.
Making a Decision
If you are facing foreclosure, you need to consider all of your debt relief options, including bankruptcy. Contact an experienced bankruptcy attorney to discuss where you stand.
