The House of Representatives approved legislation to end the Neighborhood Stabilization Program on Monday.
Passed by a vote of 242-182, it’s the third bill approved by the House in the last two weeks that targeted government funded mortgage relief.
“Today the House acted yet again to end wasteful spending on a government program that does nothing to help homeowners facing foreclosure,” said Financial Services Committee Chairman Spencer Bachus. “In fact, this program creates perverse incentives for banks and other lenders to foreclose on homeowners. This program is not only bad for struggling homeowners, it’s horrible for taxpayers, too. It uses taxpayer money to bail out lenders and real estate speculators. We simply cannot continue to use taxpayer dollars to bailout those who made bad decisions.”
The NSP provides taxpayer dollars to state and local governments, as well as non-profits, to purchase, rehabilitate, and resell foreclosed properties. In a statement, Bachus said the program represents a costly bailout of lenders, servicers, and real estate speculators who made risky bets on the housing market and will now offload their foreclosed property onto the taxpayer.
“I am pleased that the House of Representatives voted today to terminate the ineffective and unaccountable Neighborhood Stabilization Program,” said Subcommittee Chairman Gary Miller. “The NSP, which has already consumed $6 billion, does absolutely nothing to help homeowners facing foreclosure. Instead, it gives away billions of dollars while lacking the proper oversight and accountability protocols necessary to ensure that program funds are being used effectively and are allocated to the areas of greatest need.”
The NSP was provided $4 billion at its inception in 2008, $2 billion more in 2009, and another $1 billion as part of the Dodd-Frank Act in 2010.