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Wednesday
Mar022011

Obama Administration Fights To Save Embattled Housing Program

Photo Courtesy - ABC News (WASHINGTON) -- In the spring of 2009, the Obama administration unveiled a program that they said would help three to four million struggling homeowners avoid foreclosure, but to date the plan has fallen so far short that non-partisan government watchdogs are blasting it and House Republicans are trying to do away with it altogether.

The Home Affordable Modification Program -- known as HAMP -- has only helped around 540,000 borrowers receive permanent loan modifications to enable them to stay in their homes. By comparison, more than 800,000 homeowners have dropped out of the program.

On Capitol Hill, the program has become a lightning rod for criticism. On Wednesday, a government watchdog ripped the plan before a House subcommittee. 

Neil Barofsky, the outgoing Special Inspector General for TARP (SIGTARP), said the program “continues to fall woefully short of meeting its original expectations” and there is now “near-universal agreement that the program has failed.”

That will only be fuel for the fire of House Republicans, who have unveiled a bill to end the program before it expires at the end of next year, contending that it is wasting tens of billions of taxpayer dollars.

While Treasury has acknowledged that the program will not meet its stated goal of keeping three to four million homeowners in their homes, they have argued that is still helping some 25,000 to 30,000 borrowers every month, so getting rid of it would hurt the housing market.

But that may not be enough to stop Republicans from pulling the plug on it.

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ABC News Radio