CONGRESSWOMAN ELISE STEFANIK
On Tuesday, March 29, 2011, the House is scheduled consider H.R. 839, the HAMP Termination Act of 2011, under a rule. The rule provides for one hour of debate equally divided and controlled by the chair and ranking minority member of the Committee on Financial Services. Additionally, the rule makes in order amendments printed in part A of the Rules Committee report accompanying H.Res. 170 and provides for one motion to recommit with or without instructions. The nine amendments printed in part A of the report are summarized below. The bill was introduced by Rep. Patrick McHenry (R-NC) on February 28, 2011, and referred to the Committee on Financial Services. On March 9, 2011, a mark-up was held and the bill was reported by a recorded vote of 32-23.
The legislation would amend the Emergency Economic Stabilization Act of 2008 (aka “TARP”) to terminate the authority of the Secretary of the Treasury to provide new mortgage modification assistance under the Home Affordable Modification Program (HAMP), except with respect to existing obligations on behalf of homeowners already extended an offer to participate in the program.
The legislation would also direct the Secretary to conduct a study to determine the extent of use of HAMP by members of the Armed Forces, Veterans, and Gold Star recipients.
Lastly, the legislation would also direct the Secretary of the Treasury to post a cancellation notice of the Home Affordable Modification Program on its website and encourage struggling homeowners to contact their Member of Congress.
The Home Affordable Modification Program (HAMP), part of President Obama’s “Making Home Affordable” (MHA) initiative, has been singled out for slow uptake and the Treasury Department’s failure to set and monitor metrics for the program’s success. The Treasury Department has obligated $29.9 billion of TARP funding to pay servicer, borrower, and investor incentives under HAMP. As of December 2010, a total of 522,000 permanent modifications were in place under HAMP at a cost of approximately $1.0 billion. Successive SIGTARP quarterly reports, in addition to reports from the Congressional Oversight Panel and the Government Accountability Office, have been particularly critical of the Program.
The Congressional Budget Office (CBO) estimates that the legislation would decrease federal budget deficits by $1.4 billion over the FY2011-2021 period.
Amendment No. 1—Rep. Hanna (R-NY): This amendment would add Congressional findings detailing the Home Affordable Modification Program’s flaws and state that cancelling the program would save taxpayers approximately $1.4 billion.
Amendment No. 2—Rep. Quigley (D-IL): This amendment would add Congressional findings on various facts about the HAMP program, including cost and number of permanent modifications.
Amendment No. 3—Rep. Canseco (R-TX): This amendment would direct that all unobligated balances rescinded by the bill be retained in the Treasury’s General Fund for the purpose of deficit reduction.
Amendment No. 4—Rep. Inslee (D-WA): This amendment would direct the Secretary of the Treasury to study the effectiveness of the program in assisting covered homeowners. Following submission of the study to Congress, the Secretary would be required to establish a new program based on the study’s findings, subject to funds appropriated for such purposes.
Amendment No. 5—Rep. Waters (D-CA): This amendment would direct the Secretary of the Treasury to send a notice to HAMP applicants as notification that they will not be considered for mortgage modification because the program has been terminated and that the individual should contact his or her Member of Congress.
Amendment No. 6—Rep. Jackson-Lee (D-TX): This amendment would direct the Secretary of the Treasury to conduct a study of the successful aspects of HAMP and to submit a report to Congress on a legislative recommendation for a new mortgage modification program.
Amendment No. 7—Rep. Matsui (D-CA): This amendment would require lenders and servicers participating in HAMP to continue publicly reporting loan modification information via a website and a report to Congress.
Amendment No. 8—Rep. Maloney (D-NY): This amendment would include a list of trial and permanent mortgage modifications started under HAMP by state, as well as the number of delinquent mortgages ineligible for modification under HAMP as a result of the program’s termination.
Amendment No. 9—Rep. Sanchez (D-CA): This amendment would express that it is the sense of Congress to encourage banks to work with qualified homeowners to provide loan modifications and to assist homeowners with foreclosure prevention programs and information on loan modifications.