Obama threatens to veto bills killing foreclosure programs

The Obama administration said Tuesday night that it would veto two bills that would kill foreclosure prevention programs if Congress passed them. The House Financial Services Committee voted last week approving two bills that would terminate the Federal Housing Administration‘s Short Refi and the Department of Housing and Urban Development‘s Emergency Homeowner Loan Program. The FHA Short Refi program assists underwater homeowners with new FHA-insured loans. The EHLP provides mortgage assistance to unemployed borrowers in the form of 0% interest loans for up to $50,000. The Obama administration’s Office of Management and Budget released two statements defending the programs. “The Administration is committed to helping struggling American homeowners stay in their homes, and has taken many steps over the last two years to stabilize what was a rapidly-declining housing market,” the OMB said. The OMB said that EHLP is set to reach 30,000 distressed homeowners over the next 30 months. “The Administration believes that the EHLP is an important tool in helping these Americans struggling to stay in their homes,” the OMB said. Rep. Judy Biggert (R-Ill.) co-sponsored both bills. “A government program that spends more to save a single borrower than it costs to buy a home is no help at all – it’s just a waste of taxpayer money,” Biggert said last week. “We need to stop funding programs that don’t work with money we don’t have.” The bills will reach the House floor this week. Two other programs face termination as well. The committee will vote on bills ending the Home Affordable Modification Program and the Neighborhood Stabilization Program Wednesday. Write to Jon Prior. Follow him on Twitter: @JonAPrior