GOP: Anti-foreclosure program could prolong housing slump
“Many Americans are throwing their money away through a government program that’s supposed to help them, but is only leaving them in a bigger financial hole,” U.S. Rep. Jim Jordan (R-Ohio) said in releasing a report he co-wrote with U.S. Rep. Darrell Issa (R-Calif.).Under HAMP, major U.S. banks have agreed to voluntarily “modify” financially strapped homeowners’ mortgages rather than foreclosing.
Lenders typically cut a consumer’s monthly mortgage bill to no more than 31 percent of household income, extending a 30-year loan’s terms out an extra 10 years to make up the difference. Banks also get government cash bonuses for every mortgage permanently modified.
However, the Obama administration recently admitted that just 116,000 homeowners out of 1 million who’ve sought HAMP assistance have actually gotten permanent help.
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