The House of Representatives voted 242 to 182 on March 16 to terminate the Neighborhood Stabilization Program (NSP). The bill, H.R. 861, would rescind all unobligated balances of the $1 billion provided in the third round of NSP funding for NSP, made through the Dodd-Frank Consumer Protection and Wall Street Reform Act of 2010. In September 2010, HUD announced round three NSP grants to 270 states and selected local governments to mitigate the negative impact of the nation’s economic decline and housing market collapse and to stabilize and revitalize communities hit the hardest by the housing crisis.
In a statement prior to the House vote, House Committee on Financial Services Ranking Member Barney Frank (D-MA) defended NSP as “a program which provides funding to help communities deal with large numbers of foreclosures and abandoned properties.”
During House debate on the bill, House Financial Services Subcommittee on Insurance, Housing and Community Opportunity Chair Judy Biggert (R-IL) criticized the NSP program as spending billions of dollars “to save a few homes here and there.”
Ranking Member Frank introduced legislation that would fund NSP and the Emergency Mortgage Relief Program, which the House voted to terminate on March 9. “During the recent debates on foreclosure mitigation programs, Republicans insisted that the programs are a burden on taxpayers and that they must be eliminated as part of efforts to reduce the budget deficit. However, Republicans previously acted to block a levy on the largest financial institutions which would have paid for Neighborhood Stabilization Program and the Emergency Mortgage Relief Program. The funding mechanism was part of the House-passed version of the Wall Street Reform and Consumer Protection Act, but it was stripped because of Republican opposition in the conference committee,” a statement on the Committee’s Minority website says.
On March 17, Ranking Member Frank introduced H.R. 1151, which would place a levy on the largest financial institutions in order to pay for foreclosure mitigation programs.
The House postponed a vote on H.R. 839, which would terminate the
federal Home Affordable Modification Program (HAMP). The Committee on
Financial Services also passed this bill on March 9 (see Memo, 3/11).