Lynn Woolsey was at it again today. She tweeted:
No matter what the House votes to cut in the budget, she attacks, all aghast. In this case, the House approved ending the mortgage assistance program. By a bipartisan vote of 256-171 (with eighteen Democrats supporting the bill and one Republican opposing it), the members decided
that terminating the program would save $8.1 billion, none of which has been spent so far. Part of the Republican argument against the FHA program is that it has been used to refinance just 44 mortgages, after the Obama administration said it expected up to 1.5 million mortgages to be refinanced. House Financial Services Committee Chairman Spencer Bachus (R-Ala.) was one of many who argued that the underperforming program needs to be cut, while other Republicans noted during the debate that the FHA program was never authorized by Congress, and was created by the administration with unused money from the Troubled Assets Relief Program (TARP).
Rep. Bachus, who happens to represent the 6th District — in Alabama — gave a notable floor speech today during the debate. Not only did he remind listeners of the dire straits of our federal finances (see a short excerpt of his speech here) but he also said:
“The money from this program doesn’t go to the homeowner, it goes to the lender, it goes to the banks. And who pays for it? The taxpayers and ultimately our children and grandchildren because the federal government borrows 42 cents of every dollar it spends,” said Chairman Bachus. “This program is already allocated $50 million and has helped only 44 people. Do the math.”
The bill was introduced by Illinois Congressman Robert Dold who, after the bill passed, stated:
“The FHA Refinance Program was wrong for homeowners, wrong for taxpaying American families, and wrong for our future generations. I’m very pleased that my bill to end this ineffective and harmful government program passed on a bi-partisan basis. Democrats and Republicans alike know that we must stop wasting money on ineffective government programs and instead focus on improving the conditions for jobs and income growth.”
Despite the fact that only 44 families applied for this program during the time it has been on offer, and we taxpayers spent $50 million for just those 44, Lynn Woolsey can’t bear to admit that this is an assistance program that — rightly — wasn’t being used by Americans (when the program was first approved, the expectation was that thousands would apply, but most Americans don’t want to apply for such handouts) and should be eliminated. Rep. Woolsey, big-government politico she is, doesn’t seem to think that people who buy houses should pay their own mortgages.
Now, of course, we all know that the mortgage crisis has caused some homeowners with mortgages to lose their homes. Some of these cases were due to the homeowners having bought homes that they couldn’t really afford. Some were due to the homeowners losing their jobs and the banks beginning foreclosing procedures before they could find new employment and resume their mortgage payments. And there have been other reasons why foreclosures have occurred. Each case has its own set of facts, and in an ideal world, each case would receive fair and independent consideration from the lenders in question. Since we don’t have a perfect world, there have been situations where those delinquent on their mortgages have not been treated well. The light of attention has shone on this state of affairs, and better dealings between lenders and lendees seem more in evidence, fortunately. That is how underwater mortgages should be treated –and why mortgages should be mainly if not exclusively issued by local lenders who can deal personally with the people being granted mortgages.
The answer to underwater mortgages is not to have the government pay the mortgage, not temporarily, not permanently. The federal government should not, really, be involved in mortgages at all. This is a matter best handled locally by those directly involved.
But Rep. Woolsey won’t see that. She, as usual, wants the federal government to bail out anyone and everyone. She thinks federal money should be used to provide entitlements (and mortgage assistance, if she had her way, would become a permanent entitlement, I have not doubt). She refuses to see that this said mortgage assistance program was inefficient and an improper use of federal funds.
So, rail away, Congresswoman. You are wrong though. The House’s voting to cut this program is not “irresponsible and reckless” It’s the right thing to do. Well done, ladies and gentlemen who voted to end mortgage assistance. Now, if only the Senate and President Obama were also as responsible….