Despite railing from Democrats including a few from the East Bay, the House today voted to scrap the Federal Housing Administration Refinance Program, which aims to help homeowners who are “underwater” – owing more on their mortgage than their home is worth – refinance. The vote was 256-171.
Authorized under the Troubled Asset Relief Program (TARP), the FHA program has used only $50 million of the more than $8 billion set aside for it, and Republicans think the money should be redirected to pay down the federal budget deficit. Democrats agreed the program has underperformed but said it should be fixed rather than abolished, as there’s still enormous need for it.
The bill now goes to the Democrat-dominated U.S. Senate, which probably won’t even take it up, and the White House earlier this week threatened a veto.
Here’s what Rep. Jerry McNerney, D-Pleasanton, said today on the House floor:
“I’m proud to represent much of San Joaquin County, which is the jewel of California’s Central Valley. Our Valley is a great place to live and work, but unfortunately we’ve been hit very hard by the economic downturn. The Valley has been ground zero for the foreclosure crisis.
“Over the past few years, thousands of families in San Joaquin County and throughout the Valley have lost their homes. I’ve hosted foreclosure assistance workshops; I’ve met with hardworking people who were misled by lenders who are struggling to stay on top of their mortgages. I’ve seen grown men cry because they couldn’t keep a roof over their children, I’ve talked to veterans who served their country only to return home to notices of default, and I’ve met seniors on the brink of homelessness.
“The administration’s foreclosure prevention initiatives have fallen short in the Valley. Simply put, the administration’s programs haven’t effectively served the people underwater on their mortgage, and the administration hasn’t been tough enough on the big banks. I call on President Obama and his cabinet to develop more effective efforts to stem the tide of foreclosures.
“But despite these shortcomings, the bill the House Republicans are offering today is absolutely the wrong approach. It’s throwing the baby out with the bathwater. Instead of canceling foreclosure relief programs at their beginning stages like they’re proposing, we should be strengthening them so they’re more effective. Mortgage counselors from my district advise and plead to improve our efforts, to get tough on big banks and provide meaningful relief to families. Stabilizing the housing market is critical to economic recovery and creating jobs.
“For those reasons, I oppose H.R. 830, and I yield back the balance of my time.”