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[House Report 112-31]
[From the U.S. Government Printing Office]


112th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                     112-31

======================================================================



 
                    THE HAMP TERMINATION ACT OF 2011

                                _______
                                

 March 11, 2011.--Committed to the Committee of the Whole House on the 
              State of the Union and ordered to be printed

                                _______
                                

         Mr. Bachus, from the Committee on Financial Services, 
                        submitted the following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 839]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Financial Services, to whom was referred 
the bill (H.R. 839) to amend the Emergency Economic 
Stabilization Act of 2008 to terminate the authority of the 
Secretary of the Treasury to provide new assistance under the 
Home Affordable Modification Program, while preserving 
assistance to homeowners who were already extended an offer to 
participate in the Program, either on a trial or permanent 
basis, having considered the same, report favorably thereon 
with an amendment and recommend that the bill as amended do 
pass.
    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``The HAMP Termination Act of 2011''.

SEC. 2. TERMINATION OF AUTHORITY.

  Section 120 of the Emergency Economic Stabilization Act of 2008 (12 
U.S.C. 5230) is amended by adding at the end the following new 
subsection:
  ``(c) Termination of Authority To Provide New Assistance Under the 
Home Affordable Modification Program.--
          ``(1) In general.--Except as provided under paragraph (2), 
        after the date of the enactment of this subsection the 
        Secretary may not provide any assistance under the Home 
        Affordable Modification Program under the Making Home 
        Affordable initiative of the Secretary, authorized under this 
        Act, on behalf of any homeowner.
          ``(2) Protection of existing obligations on behalf of 
        homeowners already extended an offer to participate in the 
        program.--Paragraph (1) shall not apply with respect to 
        assistance provided on behalf of a homeowner who, before the 
        date of the enactment of this subsection, was extended an offer 
        to participate in the Home Affordable Modification Program on a 
        trial or permanent basis.
          ``(3) Study of use of program by members of the armed forces, 
        veterans, and gold star recipients.--
                  ``(A) Study.--The Secretary shall conduct a study to 
                determine the extent of usage of the Home Affordable 
                Modification Program by, and the impact of such Program 
                on, covered homeowners.
                  ``(B) Report.--Not later than the expiration of the 
                90-day period beginning on the date of the enactment of 
                this subsection, the Secretary shall submit to the 
                Congress a report setting forth the results of the 
                study under paragraph (1) and identifying best 
                practices, derived from studying the Home Affordable 
                Modification Program, that could be applied to existing 
                mortgage assistance programs available to covered 
                homeowners.
                  ``(C) Covered homeowner.--For purposes of this 
                subsection, the term `covered homeowner' means a 
                homeowner who is--
                          ``(i) a member of the Armed Forces of the 
                        United States on active duty or the spouse or 
                        parent of such a member;
                          ``(ii) a veteran, as such term is defined in 
                        section 101 of title 38, United States Code; or
                          ``(iii) eligible to receive a Gold Star lapel 
                        pin under section 1126 of title 10, United 
                        States Code, as a widow, parent, or next of kin 
                        of a member of the Armed Forces person who died 
                        in a manner described in subsection (a) of such 
                        section.
          ``(4) Publication of member availability for assistance.--Not 
        later than 5 days after the date of the enactment of this 
        subsection, the Secretary of the Treasury shall publish to its 
        Website on the World Wide Web in a prominent location, large 
        point font, and boldface type the following statement: `The 
        Home Affordable Modification Program (HAMP) has been 
        terminated. If you are having trouble paying your mortgage and 
        need help contacting your lender or servicer for purposes of 
        negotiating or acquiring a loan modification, please contact 
        your Member of Congress to assist you in contacting your lender 
        or servicer for the purpose of negotiating or acquiring a loan 
        modification.'.''.

                          Purpose and Summary

    H.R. 839, the HAMP Termination Act, would terminate the 
authority of the Treasury Department to provide any new 
assistance to homeowners under the Home Affordable Modification 
Program (HAMP) authorized under Title I of the Emergency 
Economic Stabilization Act (12 U.S.C. 5230), while preserving 
any assistance already provided to HAMP participants on a 
permanent or trial basis. The bill also provides for a study by 
the Treasury Department to identify best practices for how 
existing mortgage assistance programs can be applied to 
veterans, active duty military personnel, and their relatives.

                  Background and Need For Legislation

    H.R. 839, the HAMP Termination Act, was introduced by 
Congressman Patrick McHenry and Chairman Bachus to terminate 
new mortgage modification activities under the HAMP. Created 
under the auspices of Section 109 of the Troubled Assets Relief 
Program (TARP) enacted in 2008 (P.L. 110-343), HAMP is a 
federally-funded mortgage modification program that provides 
financial incentives to participating mortgage servicers to 
modify the mortgages of eligible homeowners.
    As the signature piece of the Administration's overall 
Making Home Affordable initiative on foreclosure prevention, 
HAMP has been both costly and ineffective. According to the 
Treasury Department, as of February 3, 2011, the Administration 
has obligated $29.91 billion to HAMP, although thus far it has 
only disbursed $940 million. Overall, the Administration has 
obligated $45.63 billion of TARP dollars to the Making Home 
Affordable initiative, which also includes the Hardest Hit Fund 
and the FHA Refinance program.
    By any objective measure, HAMP and these other programs 
have failed to produce their promised results. The 
Administration originally projected that Making Home Affordable 
would help 7 to 9 million homeowners, yet foreclosures have 
remained elevated and the number of assisted families has 
fallen far short of promised levels. For example, in 2009, an 
estimated 2.8 million Americans had their homes enter 
foreclosure. In 2010, that number rose slightly to 2.9 million. 
Currently, 2.2 million mortgages in the United States are 90 
days or more delinquent and around 13 percent of the loans 
outstanding in the market are delinquent in some way.
    HAMP itself, which was initially projected to modify 3 to 4 
million loans, has only started 1.47 million trial 
modifications in its two years of existence. Of those loans 
trials, only 521,630 loans have been transitioned to a 
permanent status and remained active. Meanwhile, more than half 
of the trial modifications started--involving 792,529--loans 
have ended up being cancelled. HAMP's lack of success has been 
so pronounced that the New York Times noted in a January 2010 
editorial that HAMP has ``raised false hopes among people who 
simply cannot afford their homes''.
    Additional concerns have been raised about the benefit to 
participants of a mortgage modification program that gives 
borrowers a false sense of hope as they struggle to keep their 
homes. The Special Inspector General for the Troubled Asset 
Relief Program (SIGTARP) has testified before Congress that 
HAMP is a program that ``benefits only a small portion of 
distressed homeowners, offers others little more than false 
hope, and in certain cases causes more harm than good.'' That 
harm comes from having borrowers provisionally make reduced 
loan payments during a trial period, only to be told that they 
owe back payments, interest, and fees, sometimes in one lump 
sum, should they be rejected from the program before attaining 
permanent status. For some borrowers, that reversal constitutes 
their last gasp, as their increased indebtedness and tarnished 
credit rating preclude them from qualifying for a private-
sector proprietary loan modification program which might have 
helped them retain their home.
    Finally, in addition to its high cost and poor track 
record, HAMP has also been plagued by poor administration and 
resistance to proper oversight since its inception, placing 
taxpayers at risk. For example, the Government Accountability 
Office (GAO) has cited the Treasury Department for having not 
``fully implemented all of our prior recommendations to 
increase the transparency, accountability, and consistency of 
the program.'' The Congressional Oversight Panel for TARP has 
noted that ``despite repeated urgings from the Panel, Treasury 
has failed to collect and analyze data that would explain HAMPs 
shortcomings, and it does not even have a way to collect data 
for many of HAMPs add-on programs.'' SIGTARP has added that 
HAMP ``has been beset by problems from the outset and, despite 
frequent retooling, continues to fall dramatically short of any 
meaningful standard of success.''
    Continued government intervention and bailouts only prolong 
our current economic crisis and ensure that the housing market 
will continue to struggle. The market needs to find its own 
footing free of government intervention and manipulation so 
that we can get on with a full recovery. HAMP, for all its good 
intentions, has thus far impeded that process and prolonged our 
economic woes. Thus, Congress should enact H.R. 839 to 
immediately end this costly, ineffective, injurious, and poorly 
run program.

                                Hearing

    The Subcommittee on Insurance, Housing, and Community 
Opportunity held a hearing on March 2, 2011 entitled 
``Legislative Proposals to End Taxpayer Funding for Ineffective 
Foreclosure Mitigation Programs.'' The following witnesses 
testified:
           The Honorable Neil M. Barofsky, Special 
        Inspector General for the Troubled Asset Relief 
        Program, Office of the Special Inspector General
           The Honorable David Stevens, Assistant 
        Secretary for Housing and Commissioner of the Federal 
        Housing Administration, Department of Housing and Urban 
        Development
           The Honorable Mercedes M. Marquez, Assistant 
        Secretary, Community Planning and Development, 
        Department of Housing and Urban Development
           Mr. Matthew J. Scire, Director, Financial 
        Markets and Community Investment, U.S. Government 
        Accountability Office
           Ms. Katie Jones, Analyst in Housing Policy, 
        Congressional Research Service, Library of Congress

                        Committee Consideration

    The Committee on Financial Services met in open session on 
March 3, 2011 and ordered H.R. 839, the HAMP Termination Act, 
as amended, favorably reported to the House by a record vote of 
32 yeas and 23 nays, (Record vote no. FC-19).

                            Committee Votes

    Clause 3(b) of rule XIII of the Rules of the House of 
Representatives requires the Committee to list the record vote 
on the motion to report legislation and amendments thereto. A 
motion by Chairman Bachus to report the bill, as amended, to 
the House with a favorable recommendation was agreed to by a 
recorded vote of 32 yeas and 23 nays, (Record vote no. FC-19). 
The names of Members voting for and against follow:

                                              RECORD VOTE NO. FC-19
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................        X   ........  .........  Mr. Frank (MA)...  ........  ........  .........
Mr. Hensarling.................        X   ........  .........  Ms. Waters.......  ........        X   .........
Mr. King (NY)..................  ........  ........  .........  Mrs. Maloney.....  ........        X   .........
Mr. Royce......................        X   ........  .........  Mr. Gutierrez....  ........  ........  .........
Mr. Lucas......................        X   ........  .........  Ms. Velazquez....  ........        X   .........
Mr. Paul.......................        X   ........  .........  Mr. Watt.........  ........  ........  .........
Mr. Manzullo...................        X   ........  .........  Mr. Ackerman.....  ........        X   .........
Mr. Jones......................        X   ........  .........  Mr. Sherman......  ........        X   .........
Mrs. Biggert...................        X   ........  .........  Mr. Meeks........  ........        X   .........
Mr. Gary G. Miller (CA)........        X   ........  .........  Mr. Capuano......  ........        X   .........
Mrs. Capito....................        X   ........  .........  Mr. Hinojosa.....  ........        X   .........
Mr. Garrett....................        X   ........  .........  Mr. Clay.........  ........        X   .........
Mr. Neugebauer.................        X   ........  .........  Mrs. McCarthy      ........        X   .........
                                                                 (NY).
Mr. McHenry....................        X   ........  .........  Mr. Baca.........  ........        X   .........
Mr. Campbell...................        X   ........  .........  Mr. Lynch........  ........        X   .........
Mrs. Bachmann..................        X   ........  .........  Mr. Miller (NC)..  ........        X   .........
Mr. Marchant...................  ........  ........  .........  Mr. David Scott    ........        X   .........
                                                                 (GA).
Mr. McCotter...................        X   ........  .........  Mr. Al Green (TX)  ........        X   .........
Mr. McCarthy (CA)..............        X   ........  .........  Mr. Cleaver......  ........        X   .........
Mr. Pearce.....................        X   ........  .........  Ms. Moore........  ........  ........  .........
Mr. Posey......................        X   ........  .........  Mr. Ellison......  ........        X   .........
Mr. Fitzpatrick................        X   ........  .........  Mr. Perlmutter...  ........        X   .........
Mr. Westmoreland...............        X   ........  .........  Mr. Donnelly.....  ........        X   .........
Mr. Luetkemeyer................        X   ........  .........  Mr. Carson.......  ........        X   .........
Mr. Huizenga...................        X   ........  .........  Mr. Himes........  ........        X   .........
Mr. Duffy......................        X   ........  .........  Mr. Peters.......  ........        X   .........
Ms. Hayworth...................        X   ........  .........  Mr. Carney.......  ........        X   .........
Mr. Renacci....................        X   ........  .........
Mr. Hurt.......................        X   ........  .........
Mr. Dold.......................        X   ........  .........
Mr. Schweikert.................        X   ........  .........
Mr. Grimm......................        X   ........  .........
Mr. Canseco....................        X   ........  .........
Mr. Stivers....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    During consideration of H.R. 839, the following amendments 
were considered:
    1. An amendment offered by Mrs. McCarthy of New York, no. 
1, providing that termination does not apply to those who 
submitted an application or made a verifiable request to the 
servicer for a modification before March 1, 2011, was not 
agreed to by a recorded vote of 24 yeas and 31 nays, (Record 
vote no. FC-16).

                                              RECORD VOTE NO. FC-16
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................  ........        X   .........  Mr. Frank (MA)...  ........  ........  .........
Mr. Hensarling.................  ........        X   .........  Ms. Waters.......        X   ........  .........
Mr. King (NY)..................  ........  ........  .........  Mrs. Maloney.....        X   ........  .........
Mr. Royce......................  ........        X   .........  Mr. Gutierrez....  ........  ........  .........
Mr. Lucas......................  ........        X   .........  Ms. Velazquez....        X   ........  .........
Mr. Paul.......................  ........        X   .........  Mr. Watt.........  ........  ........  .........
Mr. Manzullo...................  ........        X   .........  Mr. Ackerman.....        X   ........  .........
Mr. Jones......................  ........        X   .........  Mr. Sherman......        X   ........  .........
Mrs. Biggert...................  ........        X   .........  Mr. Meeks........        X   ........  .........
Mr. Gary G. Miller (CA)........  ........        X   .........  Mr. Capuano......        X   ........  .........
Mrs. Capito....................  ........        X   .........  Mr. Hinojosa.....        X   ........  .........
Mr. Garrett....................  ........        X   .........  Mr. Clay.........        X   ........  .........
Mr. Neugebauer.................  ........        X   .........  Mrs. McCarthy            X   ........  .........
                                                                 (NY).
Mr. McHenry....................  ........        X   .........  Mr. Baca.........        X   ........  .........
Mr. Campbell...................  ........        X   .........  Mr. Lynch........        X   ........  .........
Mrs. Bachmann..................  ........        X   .........  Mr. Miller (NC)..        X   ........  .........
Mr. Marchant...................  ........  ........  .........  Mr. David Scott          X   ........  .........
                                                                 (GA).
Mr. McCotter...................  ........        X   .........  Mr. Al Green (TX)        X   ........  .........
Mr. McCarthy (CA)..............  ........        X   .........  Mr. Cleaver......        X   ........  .........
Mr. Pearce.....................  ........        X   .........  Ms. Moore........        X   ........  .........
Mr. Posey......................  ........        X   .........  Mr. Ellison......        X   ........  .........
Mr. Fitzpatrick................  ........        X   .........  Mr. Perlmutter...        X   ........  .........
Mr. Westmoreland...............  ........        X   .........  Mr. Donnelly.....        X   ........  .........
Mr. Luetkemeyer................  ........        X   .........  Mr. Carson.......        X   ........  .........
Mr. Huizenga...................  ........        X   .........  Mr. Himes........        X   ........  .........
Mr. Duffy......................  ........        X   .........  Mr. Peters.......        X   ........  .........
Ms. Hayworth...................  ........        X   .........  Mr. Carney.......        X   ........  .........
Mr. Renacci....................  ........        X   .........
Mr. Hurt.......................  ........        X   .........
Mr. Dold.......................  ........        X   .........
Mr. Schweikert.................  ........        X   .........
Mr. Grimm......................  ........        X   .........
Mr. Canseco....................  ........        X   .........
Mr. Stivers....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    2. An amendment offered by Mr. Grimm, no. 3a, requiring the 
Secretary of Housing and Urban Development to study the usage 
of the HAMP for members of the armed forces, veterans, and gold 
star recipients, to the amendment offered by Mr. Green, no. 3, 
allowing for the continuation of the program for members of the 
armed forces, veterans, and gold star recipients was agreed to 
by a recorded vote of 32 yeas and 24 nays, (Record vote no. FC-
17).

                                              RECORD VOTE NO. FC-17
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................        X   ........  .........  Mr. Frank (MA)...  ........  ........  .........
Mr. Hensarling.................        X   ........  .........  Ms. Waters.......  ........        X   .........
Mr. King (NY)..................  ........  ........  .........  Mrs. Maloney.....  ........        X   .........
Mr. Royce......................        X   ........  .........  Mr. Gutierrez....  ........  ........  .........
Mr. Lucas......................        X   ........  .........  Ms. Velazquez....  ........        X   .........
Mr. Paul.......................        X   ........  .........  Mr. Watt.........  ........  ........  .........
Mr. Manzullo...................        X   ........  .........  Mr. Ackerman.....  ........        X   .........
Mr. Jones......................        X   ........  .........  Mr. Sherman......  ........        X   .........
Mrs. Biggert...................        X   ........  .........  Mr. Meeks........  ........        X   .........
Mr. Gary G. Miller (CA)........        X   ........  .........  Mr. Capuano......  ........        X   .........
Mrs. Capito....................        X   ........  .........  Mr. Hinojosa.....  ........        X   .........
Mr. Garrett....................        X   ........  .........  Mr. Clay.........  ........        X   .........
Mr. Neugebauer.................        X   ........  .........  Mrs. McCarthy      ........        X   .........
                                                                 (NY).
Mr. McHenry....................        X   ........  .........  Mr. Baca.........  ........        X   .........
Mr. Campbell...................        X   ........  .........  Mr. Lynch........  ........        X   .........
Mrs. Bachmann..................        X   ........  .........  Mr. Miller (NC)..  ........        X   .........
Mr. Marchant...................  ........  ........  .........  Mr. David Scott    ........        X   .........
                                                                 (GA).
Mr. McCotter...................        X   ........  .........  Mr. Al Green (TX)  ........        X   .........
Mr. McCarthy (CA)..............        X   ........  .........  Mr. Cleaver......  ........        X   .........
Mr. Pearce.....................        X   ........  .........  Ms. Moore........  ........        X   .........
Mr. Posey......................        X   ........  .........  Mr. Ellison......  ........        X   .........
Mr. Fitzpatrick................        X   ........  .........  Mr. Perlmutter...  ........        X   .........
Mr. Westmoreland...............        X   ........  .........  Mr. Donnelly.....  ........        X   .........
Mr. Luetkemeyer................        X   ........  .........  Mr. Carson.......  ........        X   .........
Mr. Huizenga...................        X   ........  .........  Mr. Himes........  ........        X   .........
Mr. Duffy......................        X   ........  .........  Mr. Peters.......  ........        X   .........
Ms. Hayworth...................        X   ........  .........  Mr. Carney.......  ........        X   .........
Mr. Renacci....................        X   ........  .........
Mr. Hurt.......................        X   ........  .........
Mr. Dold.......................        X   ........  .........
Mr. Schweikert.................        X   ........  .........
Mr. Grimm......................        X   ........  .........
Mr. Canseco....................        X   ........  .........
Mr. Stivers....................        X   ........  .........
----------------------------------------------------------------------------------------------------------------

    3. An amendment offered by Mrs. Maloney, no. 4, allowing 
for the HAMP to continue operating after the date of enactment 
until 500,000 additional loan modifications have been made 
permanent, was not agreed to by a recorded vote of 23 yeas and 
32 nays, (Recorded vote no. 18).

                                              RECORD VOTE NO. FC-18
----------------------------------------------------------------------------------------------------------------
         Representative             Aye       Nay     Present     Representative      Aye       Nay     Present
----------------------------------------------------------------------------------------------------------------
Mr. Bachus.....................  ........        X   .........  Mr. Frank (MA)...  ........  ........  .........
Mr. Hensarling.................  ........        X   .........  Ms. Waters.......        X   ........  .........
Mr. King (NY)..................  ........  ........  .........  Mrs. Maloney.....        X   ........  .........
Mr. Royce......................  ........        X   .........  Mr. Gutierrez....  ........  ........  .........
Mr. Lucas......................  ........        X   .........  Ms. Velazquez....        X   ........  .........
Mr. Paul.......................  ........        X   .........  Mr. Watt.........  ........  ........  .........
Mr. Manzullo...................  ........        X   .........  Mr. Ackerman.....        X   ........  .........
Mr. Jones......................  ........        X   .........  Mr. Sherman......        X   ........  .........
Mrs. Biggert...................  ........        X   .........  Mr. Meeks........        X   ........  .........
Mr. Gary G. Miller (CA)........  ........        X   .........  Mr. Capuano......        X   ........  .........
Mrs. Capito....................  ........        X   .........  Mr. Hinojosa.....        X   ........  .........
Mr. Garrett....................  ........        X   .........  Mr. Clay.........        X   ........  .........
Mr. Neugebauer.................  ........        X   .........  Mrs. McCarthy            X   ........  .........
                                                                 (NY).
Mr. McHenry....................  ........        X   .........  Mr. Baca.........        X   ........  .........
Mr. Campbell...................  ........        X   .........  Mr. Lynch........        X   ........  .........
Mrs. Bachmann..................  ........        X   .........  Mr. Miller (NC)..        X   ........  .........
Mr. Marchant...................  ........  ........  .........  Mr. David Scott          X   ........  .........
                                                                 (GA).
Mr. McCotter...................  ........        X   .........  Mr. Al Green (TX)        X   ........  .........
Mr. McCarthy (CA)..............  ........        X   .........  Mr. Cleaver......        X   ........  .........
Mr. Pearce.....................  ........        X   .........  Ms. Moore........  ........  ........  .........
Mr. Posey......................  ........        X   .........  Mr. Ellison......        X   ........  .........
Mr. Fitzpatrick................  ........        X   .........  Mr. Perlmutter...        X   ........  .........
Mr. Westmoreland...............  ........        X   .........  Mr. Donnelly.....        X   ........  .........
Mr. Luetkemeyer................  ........        X   .........  Mr. Carson.......        X   ........  .........
Mr. Huizenga...................  ........        X   .........  Mr. Himes........        X   ........  .........
Mr. Duffy......................  ........        X   .........  Mr. Peters.......        X   ........  .........
Ms. Hayworth...................  ........        X   .........  Mr. Carney.......        X   ........  .........
Mr. Renacci....................  ........        X   .........
Mr. Hurt.......................  ........        X   .........
Mr. Dold.......................  ........        X   .........
Mr. Schweikert.................  ........        X   .........
Mr. Grimm......................  ........        X   .........
Mr. Canseco....................  ........        X   .........
Mr. Stivers....................  ........        X   .........
----------------------------------------------------------------------------------------------------------------

    The following amendments were also considered by the 
Committee:
    1. An amendment offered by Mr. Bachus and Mr. Green, no. 
2a, to add ``lender or'' before ``servicer'' on line 10 and to 
strike ``stay in your home'' and insert ``negotiating or 
acquiring a home modification'' on line 12, to the amendment 
offered by Ms. Waters, no. 2, requiring HUD to post on its 
website a notice regarding the termination of the program, was 
agreed to by voice vote.
    2. An amendment offered by Ms. Waters, no. 2, as amended by 
an amendment offered by Mr. Bachus and Mr. Green, requiring HUD 
to post on its website a notice regarding the termination of 
the program inviting borrowers who are having trouble paying 
their mortgage and need help in communicating with their lender 
or servicer to contact their Member of Congress for assistance 
in reaching the lender or servicer for the purpose of 
negotiating or acquiring a loan modification, was agreed to by 
voice vote.
    3. An amendment offered by Mr. Green, no. 3, as amended by 
an amendment offered by Mr. Grimm, no. 3a (Recorded vote no. 
17), requiring HUD to study the usage of the HAMP for members 
of the armed forces, veterans, and gold star recipients, was 
agreed to by voice vote.
    4. An amendment offered by Ms. Waters, no. 5, requiring HUD 
to inform HAMP applicants of the program termination, was 
withdrawn.

                      Committee Oversight Findings

    Pursuant to clause 3(c)(1) of rule XIII of the Rules of the 
House of Representatives, the Committee has held a hearing and 
made findings that are reflected in this report.

                    Performance Goals and Objectives

    Pursuant to clause 3(c)(4) of rule XIII of the Rules of the 
House of Representatives, the Committee establishes the 
following performance related goals and objectives for this 
legislation:
    The purposes of H.R. 839, the HAMP Termination Act, are to 
terminate the authority of the Treasury Department to provide 
any new assistance to homeowners under the Home Affordable 
Modification Program (HAMP) as authorized under Title I of the 
Emergency Economic Stabilization Act (12 U.S.C. 5230), while 
preserving any assistance already provided to HAMP participants 
on a permanent or trial basis and to provide a study by the 
Treasury Department to identify best practices for how existing 
mortgage assistance programs can be applied to veterans, active 
duty military personnel, and their relatives.

   New Budget Authority, Entitlement Authority, and Tax Expenditures

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee adopts as its 
own the estimate of new budget authority, entitlement 
authority, or tax expenditures or revenues contained in the 
cost estimate prepared by the Director of the Congressional 
Budget Office pursuant to section 402 of the Congressional 
Budget Act of 1974.

                        Committee Cost Estimate

    The Committee adopts as its own the cost estimate prepared 
by the Director of the Congressional Budget Office pursuant to 
section 402 of the Congressional Budget Act of 1974.

                 Congressional Budget Office Estimates

    Pursuant to clause 3(c)(3) of rule XIII of the Rules of the 
House of Representatives, the following is the cost estimate 
provided by the Congressional Budget Office pursuant to section 
402 of the Congressional Budget Act of 1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 11, 2011.
Hon. Spencer Bachus,
Chairman, Committee on Financial Services,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 839, the HAMP 
Termination Act of 2011.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Chad Chirico, 
who can be reached at 226-2820.
            Sincerely,
                                              Douglas W. Elmendorf.
    Enclosure.

H.R. 839--HAMP Termination Act of 2011

    Summary: H.R. 839 would terminate the Department of the 
Treasury's Home Affordable Modification program (HAMP).
    CBO estimates that enacting the legislation would decrease 
direct spending by $1.3 billion over the 2011-2016 period and 
$1.4 billion over the 2011-2021 period. Pay-as-you-go 
procedures apply because the legislation would affect direct 
spending.
    The bill contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act (UMRA).
    Estimated Cost to the Federal Government: The estimated 
budgetary impact of H.R. 839 is shown in the following table. 
The costs of this legislation fall within budget function 600 
(income security).

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                         By fiscal year, in millions of dollars--
                                ------------------------------------------------------------------------------------------------------------------------
                                   2011     2012     2013     2014     2015     2016     2017     2018     2019     2020     2021   2011-2016  2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                               CHANGES IN DIRECT SPENDING

Estimated Budget Authority.....      -10     -279     -354     -276     -222     -195      -91       -2        0        0        0     -1,337     -1,437
Estimated Outlays..............      -10     -279     -354     -276     -222     -195      -91       -2        0        0        0     -1,337     -1,437
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Basis of Estimate: For this estimate, CBO assumes that the 
legislation will be enacted by June 2011. Because of the 
complementary nature of the Treasury's Making Home Affordable 
programs, CBO also assumes that the following related programs 
would be terminated along with HAMP:
           Second Lien Modification Program,
           Federal Housing Administration HAMP,
           U.S. Department of Agriculture Rural Housing 
        Service's Rural Development HAMP,
           Home Affordable Foreclosure Alternatives,
           Home Price Decline Protection,
           Home Affordable Unemployment Program, and
           Principal Reduction Alternative Program.
    The Making Home Affordable programs are intended to help 
homeowners who are facing the possibility of foreclosure by 
subsidizing loan modifications as well as other foreclosure 
alternatives. The Department of Treasury has obligated about 
$27 billion of spending authority provided by the Emergency 
Economic Stabilization Act of 2008 for HAMP and its related 
programs.
    Program funds are used to cover costs incurred for the 
modification of mortgages that are not owned or guaranteed by 
the government-sponsored enterprises (GSEs) Fannie Mae or 
Freddie Mac. Generally, the programs provide incentive payments 
to mortgage servicers, investors, and eligible homeowners to 
either reduce the homeowner's mortgage payment to 31 percent of 
monthly income or to sell their house outside of foreclosure. 
All modification payments are contingent on borrowers remaining 
current on their mortgages. Through December 31, 2010, 
approximately 600,000 mortgages have been modified through the 
HAMP and its related programs (listed above), 45 percent of 
which were non-GSE mortgages. Servicers and borrowers currently 
have until December 31, 2012, to modify mortgages through the 
program.
    CBO estimates that H.R. 839 would prevent the Treasury from 
making payments for approximately 100,000 new modifications of 
non-GSE mortgages. (The cost of modifications entered into 
prior to enactment would continue to be paid by the Treasury.) 
Based on data provided by the Office of the Special Inspector 
General for the Troubled Asset Relief Program, CBO estimates 
that such modifications, when combined with the costs of the 
related programs mentioned above, cost an average of about 
$13,000. As a result, CBO estimates that enacting H.R. 839 
would reduce direct spending by $1.3 billion over the 2011-2016 
period and $1.4 billion over the 2011-2021 period.
    Pay-as-you-go considerations: The Statutory Pay-As-You-Go 
Act of 2010 establishes budget reporting and enforcement 
procedures for legislation affecting direct spending or 
revenues. The net changes in outlays and revenues that are 
subject to those pay-as-you-go procedures are shown in the 
following table. Enacting H.R. 839 would have no impact on 
federal revenues.

 CBO ESTIMATE OF PAY-AS-YOU-GO EFFECTS FOR H.R. 839, THE HAMP TERMINATION ACT OF 2011, AS ORDERED REPORTED BY THE HOUSE COMMITTEE ON FINANCIAL SERVICES
                                                                    ON MARCH 9, 2011
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                           By fiscal year, in millions of dollars--
                                     -------------------------------------------------------------------------------------------------------------------
                                       2011     2012     2013     2014     2015     2016     2017    2018    2019    2020    2021   2011-2016  2011-2021
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                             NET DECREASE (-) IN THE DEFICIT

Statutory Pay-As-You-Go Impact......     -10     -279     -354     -276     -222     -195      -91      -2       0       0       0     -1,337     -1,437
--------------------------------------------------------------------------------------------------------------------------------------------------------

    Intergovernmental and private-sector impact: The bill 
contains no intergovernmental or private-sector mandates as 
defined in UMRA and would impose no costs on state, local, or 
tribal governments.
    Estimate prepared by: Federal Costs: Chad Chirico; Impact 
on State, Local, and Tribal Governments: Lisa Ramirez-Branum; 
Impact on the Private Sector: Paige Piper/Bach.
    Estimate approved by: Peter H. Fontaine, Assistant Director 
for Budget Analysis.

                       Federal Mandates Statement

    The Committee adopts as its own the estimate of Federal 
mandates prepared by the Director of the Congressional Budget 
Office pursuant to section 423 of the Unfunded Mandates reform 
Act.

                      Advisory Committee Statement

    No advisory committees within the meaning of section 5(b) 
of the Federal Advisory Committee Act were created by this 
legislation.

                  Applicability to Legislative Branch

    The Committee finds that the legislation does not relate to 
the terms and conditions of employment or access to public 
services or accommodations within the meaning of the section 
102(b)(3) of the Congressional Accountability Act.

                         Earmark Identification

    H.R. 839 does not contain any congressional earmarks, 
limited tax benefits, or limited tariffs benefits as defined in 
clause 9 of rule XXI.

             Section-by-Section Analysis of the Legislation


Section 1. Short title

    This section establishes the short title of the bill, the 
`The HAMP Termination Act of 2011.'

Section 2. Termination of authority

    This section amends Section 120 of the Emergency Economic 
Stabilization Act of 2008 to terminate the authority of the 
Treasury Department to provide any new assistance to homeowners 
under the Home Affordable Modification Program (HAMP). It also 
preserves the Treasury Department's authority to continue to 
provide any assistance to homeowners who have already been 
extended an offer to participate in HAMP on a permanent or 
trial basis.
    Further, this section directs the Treasury Secretary to 
conduct a study to determine the extent of usage of HAMP by 
``covered homeowners.'' Covered homeowners are defined as 
individuals who are active duty members of the U.S. armed 
forces and their spouses or parents, veterans of the U.S. armed 
forces, and individuals eligible to receive a Gold Star lapel 
button under 10 U.S.C. 1126 as the widow, parent, or next of 
kin of a fallen member of the U.S. armed forces. The Treasury 
Secretary is then required to submit a report to Congress 
including the results of that study and identifying any best 
practices that could be applied to existing mortgage assistance 
programs available to covered homeowners within 90 days of 
enactment of this Act.
    Finally, this section requires the Treasury Secretary to 
publish in a prominent location on the Treasury Department's 
website, in a noticeable font, a statement that HAMP has been 
terminated and inviting borrowers who are having trouble paying 
their mortgage and need help in communicating with their lender 
or servicer to contact their Member of Congress for assistance 
in reaching the lender or servicer for the purpose of 
negotiating or acquiring a loan modification.

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (new matter is 
printed in italics and existing law in which no change is 
proposed is shown in roman):

              EMERGENCY ECONOMIC STABILIZATION ACT OF 2008


DIVISION A--EMERGENCY ECONOMIC STABILIZATION

           *       *       *       *       *       *       *


TITLE I--TROUBLED ASSETS RELIEF PROGRAM

           *       *       *       *       *       *       *


SEC. 120. TERMINATION OF AUTHORITY.

  (a) * * *

           *       *       *       *       *       *       *

  (c) Termination of Authority To Provide New Assistance Under 
the Home Affordable Modification Program.--
          (1) In general.--Except as provided under paragraph 
        (2), after the date of the enactment of this subsection 
        the Secretary may not provide any assistance under the 
        Home Affordable Modification Program under the Making 
        Home Affordable initiative of the Secretary, authorized 
        under this Act, on behalf of any homeowner.
          (2) Protection of existing obligations on behalf of 
        homeowners already extended an offer to participate in 
        the program.--Paragraph (1) shall not apply with 
        respect to assistance provided on behalf of a homeowner 
        who, before the date of the enactment of this 
        subsection, was extended an offer to participate in the 
        Home Affordable Modification Program on a trial or 
        permanent basis.
          (3) Study of use of program by members of the armed 
        forces, veterans, and gold star recipients.--
                  (A) Study.--The Secretary shall conduct a 
                study to determine the extent of usage of the 
                Home Affordable Modification Program by, and 
                the impact of such Program on, covered 
                homeowners.
                  (B) Report.--Not later than the expiration of 
                the 90-day period beginning on the date of the 
                enactment of this subsection, the Secretary 
                shall submit to the Congress a report setting 
                forth the results of the study under paragraph 
                (1) and identifying best practices, derived 
                from studying the Home Affordable Modification 
                Program, that could be applied to existing 
                mortgage assistance programs available to 
                covered homeowners.
                  (C) Covered homeowner.--For purposes of this 
                subsection, the term ``covered homeowner'' 
                means a homeowner who is--
                          (i) a member of the Armed Forces of 
                        the United States on active duty or the 
                        spouse or parent of such a member;
                          (ii) a veteran, as such term is 
                        defined in section 101 of title 38, 
                        United States Code; or
                          (iii) eligible to receive a Gold Star 
                        lapel pin under section 1126 of title 
                        10, United States Code, as a widow, 
                        parent, or next of kin of a member of 
                        the Armed Forces person who died in a 
                        manner described in subsection (a) of 
                        such section.
          (4) Publication of member availability for 
        assistance.--Not later than 5 days after the date of 
        the enactment of this subsection, the Secretary of the 
        Treasury shall publish to its Website on the World Wide 
        Web in a prominent location, large point font, and 
        boldface type the following statement: ``The Home 
        Affordable Modification Program (HAMP) has been 
        terminated. If you are having trouble paying your 
        mortgage and need help contacting your lender or 
        servicer for purposes of negotiating or acquiring a 
        loan modification, please contact your Member of 
        Congress to assist you in contacting your lender or 
        servicer for the purpose of negotiating or acquiring a 
        loan modification.''.

           *       *       *       *       *       *       *


                            DISSENTING VIEWS

    H.R. 839, ``The HAMP Termination Act of 2011,'' is one of 
four bills being advanced by the Majority as a coordinated 
assault on federal programs designed to address the nationwide 
housing and foreclosure crisis. The bill would prohibit new 
mortgage loan modifications under the Home Affordable 
Modification Program (HAMP), which is funded under authority 
generally referred to as TARP. However, the bill would 
grandfather in assistance on behalf of homeowners who, prior to 
the date of enactment, had already been extended an offer to 
participate in RAMP, either on a permanent or trial basis.
    This program is one of a number of complementary federal 
programs that address different problems posed by our current 
housing programs. The other programs the Majority is shutting 
down are an FHA refinance program that is used in conjunction 
with principal mortgage reductions, loans to unemployed 
homeowners to bridge the gap so that homeowners can resume 
payments when they find a job, and grants to local communities 
for purchase and rehabilitation of foreclosed and abandoned 
homes, to address blight and deterioration of neighborhoods 
experiencing a high foreclosure rate. At the hearing on these 
four bills, not a single witness--including the GAO and 
SIGTARP, who were witnesses called by the Majority--supported 
shutting down any of these four programs at this time.
    A major factor in the housing crisis was private sector 
lenders originating loans to borrowers that could not afford 
them, with such loans often combined with predatory loan 
features, such as exploding mortgage rate reset terms. As the 
housing crisis hit and homeowners started to default on loans, 
these same private sector lenders announced that they would 
address problems through proprietary loan modifications. In 
practice, there is a general consensus that these initial 
efforts were woefully inadequate to address the default and 
foreclosure crisis, particularly since a majority of these 
modifications actually increased the payments borrowers were 
required to make. Therefore, in early 2009, the Obama 
Administration started to roll out the first of a number of 
initiatives, using general authority under the TARP 
legislation, to facilitate loan modifications and refinancings 
of borrowers in or at risk of default, and in danger of 
foreclosure.
    Now, two years later, as some of these initiatives are 
showing real results and others are just beginning to take off, 
the Majority wants to shut these efforts down. They claim that 
these federal programs have not helped enough homeowners. But, 
their answer to the criticism that not enough homeowners have 
been helped by these programs . . . is to stop them from 
helping anyone else in the future. Their answer is to eliminate 
federal assistance that helps keep people in their homes and to 
eliminate the nationwide loan modification standards that go 
with them. Their answer is to turn over resolution of the 
foreclosure crisis to the very entities that created the bad 
loans in the first place and failed to achieve meaningful loan 
modifications in the period before these government programs 
were put in place. The result would lead inevitably to a 
worsening of the foreclosure crisis, dampened home prices, and 
economic instability.
    The HAMP program was put in place by the Obama 
Administration in early 2009. Servicers of over 90% of 
mortgages nationwide currently participate in HAMP, under which 
homeowners who have defaulted on, or are at serious risk of 
defaulting on, a mortgage may be eligible for a mortgage 
modification. A HAMP modification reduces the homeowner's 
payments to a sustainable debt to income ratio of 31%. This 
significantly enhances the ability of homeowners to make their 
mortgage payments and keep their home, as well as improving 
loan performance, by avoiding the heightened cost of a 
foreclosure. The program provides incentives to loan investors 
and servicers in consideration for the loan modifications, and 
incentives for homeowners to continue to make on-time payments. 
program is authorized to run through the end of 2012. As of 
January 31, 2011, there are approximately 540,000 homeowners 
with current permanent HAMP loan modifications. The number of 
new permanent HAMP modifications averaged around 29,000 per 
month over the last six months of 2010. Therefore, assuming a 
modestly declining rate from this, a reasonable estimate is 
that program participation will double by the end of next year, 
for a cumulative total of 1.1 million homeowners. Based on this 
estimate, the bill would deny modifications to more than a half 
million homeowners at risk of foreclosure.
    Median savings on a HAMP loan modification is $527 a month, 
and Treasury estimates aggregate homeowner savings to date of 
some $5 billion. After 12 months of a HAMP loan mod, 85% of 
homeowners have remained in a permanent modification. The OCC 
has reported that the re-default rate for HAMP loan 
modifications (60+ days delinquent) at six months was about 
half the rate of non-HAMP modifications done by lenders.
    To date, only around $1 billion has been spent on these 
540,000 permanent HAMP modifications, and a reasonable estimate 
of the ultimate cost of assisting these families would be in 
the range of $5 billion. Since these families are grandfathered 
in under the bill, the bill produces no cost savings related to 
these homeowners.
    However, as noted, the bill would prevent new mortgage 
modifications going forward. The Majority has argued that this 
program imposes a cost on taxpayers, and therefore this bill 
will save taxpayers the cost of the program going forward. In 
fact, the TARP statute requires the President to propose a fee 
on financial institutions to recover any TARP expenditures not 
previously recovered. Thus, assuming the President's proposal 
is adopted, all program costs will be borne by financial 
institutions, and there will be no cost to the taxpayer.
    The Majority has criticized HAMP on the grounds that the 
program has not met initial Administration estimates that it 
could help 3 to 4 million homeowners. There are a number of 
reasons for this failure to meet initial numerical goals. 
First, the program appropriately excludes different categories 
of borrowers--including investors, owners of second homes, 
homeowners whose mortgages are unsustainable even with HAMP 
assistance, and homeowners that can pay their mortgage without 
government assistance. Secondly, legally, banks and other 
mortgage holders cannot be forced to reduce interest payments 
or principal. Therefore, programs have had to be voluntary, 
targeting financial assistance to incentivize lenders to reduce 
mortgage payments in lieu of foreclosing on defaulted 
borrowers.
    Finally, banks and other mortgage servicers were generally 
understaffed and unprepared to carry out the level loan 
modifications precipitated by the housing crisis. This has 
resulted in widespread homeowner complaints about lost files, 
conflicting guidance given to them about the program, and 
outright non-responsiveness in the application process for a 
loan modification.
    Many in the Minority Party have expressed concerns about 
these issues, urging the Treasury Department to take stronger 
actions to ensure that servicers respond to HAMP applications 
in a more timely, responsive, and effective way--criticisms 
that tend to echo those raised by the TARP Inspector General 
(SIGTARP).
    However, regardless of the criticisms of servicer 
performance, and regardless of the fact that the program has 
not reached as many homeowners as hoped, it is a mistake to 
terminate this program at a time of heightened default and 
foreclosure levels, and a fragile housing market. Terminating 
the program at this time would simply increase our nation's 
foreclosure level. The bill should be rejected.

                                   Barney Frank.
                                   Maxine Waters.
                                   Luis V. Gutierrez.
                                   Carolyn B. Maloney.
                                   Brad Miller.
                                   Ruben Hinojosa.
                                   Michael E. Capuano.
                                   Keith Ellison.
                                   Melvin L. Watt.
                                   Joe Baca.
                                   Gary L. Ackerman.
                                   Al Green.
                                   Stephen F. Lynch.
                                   Emanuel Cleaver.
                                   Nydia M. Velazquez.

                                  
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