Obama would veto bill killing foreclosure prevention

Reuters News
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Posted: Mar 21, 2011 3:38 PM

WASHINGTON (Reuters) - President Barack Obama would veto a Republican-backed bill killing his signature mortgage foreclosure prevention program if Congress passes it, his administration said on Tuesday.

The Republican-controlled U.S. House of Representatives Financial Services Committee has approved a measure that would shutter the Home Affordable Modification Program (HAMP), which aims to help struggling borrowers win lower mortgage payments.

The Obama administration "strongly opposes" House action to eliminate HAMP, and if the legislation was presented to the president for his signature into law "his senior advisors would recommend that he veto the bill," it said in a statement.

The program is designed to prevent mortgage foreclosures by giving lenders incentives to permanently lower monthly mortgage payments to help struggling owners stay in their homes.

It aimed to reach up to 4 million U.S. households when it was launched in 2009. So far only about 500,00 borrowers have had their loan payments lowered under the program, but the White House said it was helping the battered housing market.

"As tens of thousands of responsible American homeowners struggling with their mortgages receive permanent assistance each month from HAMP, the Administration believes that continuation of HAMP is important to the Nation's sustained economic recovery, it said.

(Reporting by Alister Bull; Editing by Cynthia Osterman)