House Votes to Kill Obama Mortgage Plan (HAMP)

WASHINGTON (CNNMoney) — The House passed a bill Tuesday to kill a signature Obama administration program that helps homeowners stay in their homes but has faced criticism as ineffective.

The House voted 252 to 170 to stop any new funding for the Home Affordable Modification Program (HAMP). Eleven Democrats joined Republicans to defund the program.

The program taps the federal bailout that saved the big banks, providing incentives to mortgage servicers to modify mortgages for borrowers behind on their payments.

“To many struggling Americans seeking permanent mortgage relief, HAMP offered little more than false hope. More homeowners have been kicked out of the program than have received permanent relief,” Rep. Darrell Issa, the California Republican who chairs the House Oversight Committee, said in a statement.

The bill’s path in the Senate is uncertain. President Obama has vowed to veto it.

Already, House Republicans have passed three other smaller programs designed to help families and neighborhoods dealing with foreclosure. What makes the HAMP program different is the widespread criticism it has received, from both Republicans and Democrats, for being ineffective.

“It would put an end to the poster child for failed federal foreclosure programs,” said Rep. Judy Biggert, an Illinois Republican.

On Tuesday, 50 House Democrats wrote Treasury Secretary Tim Geithner a letter, urging him to reform the program, saying “HAMP must change to meet its potential.”

“Yes, the HAMP program has a lot of problems,” said Rep. Barney Frank, a Massachusetts Democrat, on the House floor. “But, the absence of any program leaves homeowners worse off.”

 

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