Frank says GOP should leave housing relief programs alone

Earlier in the day, House Financial Services Committee Chairman Spencer Bachus (R-Ala.) announced the panel would mark up four bills in March, and that each one would shutter an administration housing relief program. He said the programs may have been well-intentioned, but were ineffective at best and that the funds tied to them should be recouped.

One bill would kill the Emergency Mortgage Relief Program, authorized as part of the Dodd-Frank financial reform law. Under that program, the Department of Housing and Urban Development (HUD) received $1 billion, which could be used to make emergency mortgage relief payments to homeowners facing foreclosure.

Frank, the ranking member of the committee, said the program is designed not to help people who were “imprudent or irresponsible,” but those that are unemployed. He called it “the single most effective anti-foreclosure program that has been put forward.”

Singling out Bachus for criticism, Frank pointed out that the Republican’s home state of Alabama had a similar program, and that it was “particularly troubling” that Bachus wanted to strike a program that would offer similar benefits elsewhere.

Another bill would eliminate the Neighborhood Stabilization Program, which provides funds to assist neighborhoods hit hard by foreclosures and abandoned homes. Frank said that bill is “an attack on cities” and that the program helps cities address widespread blight while keeping local budgets in check.

However, Frank offered no defense of one of the administration’s key programs in this area, the Home Affordable Modification Program (HAMP). That program, designed to assist 3 million to 4 million struggling homeowners modify their mortgages to make them more affordable, has resulted in just over half a million permanent mortgage modifications. Of the $29 billion set aside for the program, just $840 million has been spent in its two-year history.

Frank argued that if Republicans want to cut spending, they should focus their efforts elsewhere.

“There are better ways for the federal government to cut spending than by attacking these programs,” he said.