On Thursday, March 3, 2011, the House Financial Services Committee voted to end two Federal Housing programs. The two seemingly unmanageable programs sought to be eliminated include the FHA (Federal Housing Administration) Short Refi Program and the program initiated through the Dodd-Frank Reform Act last summer which provided a “bridge loan” for those who lost their jobs. The bills to terminate these programs will go to the full House for debate.
In the Las Vegas housing market, financially distressed properties rule the day and many borrowers have turned to different federal programs in order to offer some relief. Despite their hope that these programs would provide meaningful assistance, it appears that many do not. The “unhelpfulness” of these programs is now the party line as the Federal Government has lost interest in backing programs targeted at assisting the financially distressed property owner. The Feds allege that many of the programs do not work and some even create more problems than solutions. In fact, Financial Services Committee Chairman Spencer Bachus did state, “In an era of record-breaking deficits, it’s time to pull the plug on these programs that are actually doing more harm than good for struggling homeowners.” Considering that a significant portion of the Obama administration’s estimated $28.1 billion net cost for Troubled Asset Relief Program is vested in housing relief programs, why not create programs that have some “teeth,” rather than simply ending programs that haven’t proven successful?