WASHINGTON, D.C. – March 17, 2011 – (RealEstateRama) — This week, the House of Representatives voted to terminate the Neighborhood Stabilization Program, saving $1 billion of taxpayer money. The Neighborhood Stabilization Program was created in the 2008 Fannie Mae and Freddie Mac bailout bill and allocated federal taxpayer dollars to state and local governments to purchase, renovate, rebuild, and resell abandoned and foreclosed property.
“I made a promise to my constituents that business as usual in Washington was over,” stated Westmoreland. “We can no longer afford to fund costly, ineffective, and wasteful programs like the Neighborhood Stabilization Program. Not only does this program do nothing to help struggling homeowners, it actually created a taxpayer-funded incentive for lenders who foreclose on properties rather than attempting to work to help borrowers who find themselves in tough situations.”
After the initial $4 billion investment, Congressional Democrats have since added an additional $2.93 billion to this program that has been fraught with problems, including misuse of money and inadequate bookkeeping. The Inspector General for the Department of Housing and Urban Development (HUD) has identified multiple cases of misused funds and the Government Accountability Office has detailed HUD’s inability to track the funds allocated for the program. The most recent $1 billion allocation has yet to be spent. H.R. 861, the Neighborhood Stabilization Program Termination Act would end the program and return that money to the US taxpayers.
“Since it began, this program has been plagued with problems, including the misuse of funds,” stated Westmoreland. “Not to mention the fact that HUD doesn’t have the necessary tools to keep a proper accounting of how these funds are getting spent. What we’ve got here is a taxpayer funded bailout for lenders and servicers and it’s time the free handouts stopped.”
The bill passed the House with bipartisan support and will now be sent to the Senate for consideration. Congressman Westmoreland is a member of the House Financial Services Committee, the committee of jurisdiction over the legislation.
Leslie Shedd 202-225-5901