The U.S. House voted 242-177 to cancel the Emergency Homeowner Loan Program (EHLP) for homeowners who have lost their jobs as Republicans move to eliminate funding for President Barack Obama’s anti-foreclosure efforts. The $1 billion emergency loan program to help borrowers keep their houses was funded by a Democrat-led Congress before Republicans took control of the House. Because it is still in the design phase, no money has been spent on it yet.
EHLP, created under the Dodd-Frank Act, would begin taking applications in the spring of 2011. The Department of Housing and Urban Development (HUD) set aside $1 billion to provide up to $50,000 in interest-free loans covering mortgage payments for up to 24 months. Roughly 30,000 homeowners are expected to take part in the program.
“This is about programs that aren’t working,” said Representative Shelley Moore Capito, a West Virginia Republican, before voting. “This is a good-sense cut.”
Rep. Spencer Bachus (R-Ala.), chairman of the Financial Services Committee, called the EHLP another bailout for the largest banks who hold the debt on these mortgages.
"This Washington spending binge is driving our country right off a cliff," Bachus said. "When the taxpayers pay a $50,000 check, who do you think it goes to? It goes to Bank of America. It goes to JPMorgan Chase. It goes to Citigroup. This billion dollars is not going to homeowners. It's going to the largest institutions."
Representative Melvin Watt, a North Carolina Democrat, said the Republican measure is “mean-spirited.”
Democrats have asked Republicans to improve the programs instead of terminating them.
Rep. Barney Frank (D-Mass.) said Democrats are planning a bill that would require all of the funding to come from institutions with more than $50 billion assets and hedge funds with more than $10 billion in assets.
To become law, the bills must clear the Democrat-controlled Senate and be signed by the president, which most government watchers doubt will happen.
Tags: EHLP, HUD, emergency loan program, borrowers, interest-free loans, mortgages, spending binge
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