This was a vote on final passage of legislation eliminating a program enabling homeowners to refinance their home mortgages if, as a result of plummeting housing prices, their mortgage debt exceeded the value of their home.
Rep. Francisco Canseco (R-TX) urged support for the bill: “This bill is about a failed government program, because the FHA refinance program [the program eliminated by the bill]…has failed to work properly….The program does not work and it's wasteful….Many of my colleagues on the other side of the aisle often think that we are just one government program away from solving our problems. But when you think that way, you end up piling one government program on top of another, wasting the taxpayers' money without even helping our fellow citizens who are struggling in this day and age.”
Rep. Judy Biggert (R-IL) argued: “President Ronald Reagan famously said--with tongue in cheek, no doubt--that the closest thing to eternal life on this Earth is a federal government program…. Under the FHA Refinancing Program, the FHA [Federal Housing Administration] is directed…to refinance mortgages that are current but underwater. Its record has been abysmal, with the FHA Commissioner stating during our hearing last month: `As of February 11, 44 loans have been endorsed.'…this bill ends another failed government program. Taxpayers shouldn't foot the bill for failure.”
Rep. Stephen Lynch (D-MA) argued that while the program had only refinanced 44 mortgages, it had only been operating for four months: “I do want to also emphasize that this program started in November….We've had about 4 months to get families on board to be helped by these programs. For much of that 4 months, we have had abject resistance from the ]home loan] servicers. They have been the obstruction in making these programs work. But I am happy to say that in the last 10 days, we have had three major servicers, Allied, GMAC and Wells Fargo, that have finally come forward and said, we're going to work within this program, and we're going to try to help families stay in their homes not out of charity, but because they realize that we need to put a floor under this housing market in order to help sustain the weak economic recovery that we have going forward.”
Rep. Barney Frank (D-MA) opposed the bill: “I cannot accept the lecture on fiscal responsibility from someone who votes to lavish money in wasteful ways on Afghan cities but begrudges it in American cities; who would send it for Iraqi police officers but not for American police officers… I do believe we need to cut the deficit….My [Republican] colleagues…have said we cannot put a program out there that will help Americans facing foreclosure--and not simply to help them but to help the cities and to help the whole economy. There is a great consensus among economists that dealing responsibly with foreclosures is the way to deal with this.”
The House passed this bill by a vote of 256-171. Voting “yea” were 238 Republicans and 18 Democrats. 170 Democrats—including a majority of progressives—and 1 Republican voted “nay.” As a result, the House passed legislation eliminating a program enabling homeowners to refinance their home mortgages if, as a result of plummeting housing prices, their mortgage debt exceeded the value of their home.