House panel OKs bill to kill Obama mortgage plan

Reuters News
Posted: Mar 21, 2011 3:14 PM
House panel OKs bill to kill Obama mortgage plan

WASHINGTON (Reuters) - Republicans in the U.S. House of Representatives on Tuesday took a step toward killing President Barack Obama's signature foreclosure prevention program, though the move will likely be blocked by the Senate.

The House Financial Services Committee voted 32-23 to shutter the Home Affordable Modification Program, which aims to help struggling borrowers win lower mortgage payments. The full Republican-controlled House is expected to follow suit next week.

The program, which offers incentives for lenders to modify loans, was launched to great fanfare in the spring of 2009. The Obama administration had hoped it would permanently lower mortgage payments for 3 million to 4 million homeowners.

To date, however, only about 500,000 borrowers have received permanent loan modifications, and the program has been widely criticized as ineffective.

(Reporting by Corbett B. Daly; Editing by Gary Crosse)