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McCarthy move on mortgage bill

Rep. Carolyn McCarthy is shown in this file

Rep. Carolyn McCarthy is shown in this file photo. Credit: Newsday / Audrey C. Tiernan

Rep. Carolyn McCarthy (D-Mineola) plans to offer a buffer to a key House committee’s vote Thursday to terminate some of President Barack Obama’s homeowner rescue programs.

One of the votes scheduled by Republican-led House Financial Services Committee would end the Home Affordable Modification Program (HAMP), which gives lenders and loan servicers financial incentives to bring down interest rates or make other changes in favor of struggling borrowers. Republicans are looking for money to cover the budget and deficit, and they want to rescind billions of dollars in unspent funds on the loan modification program.

McCarthy’s amendment would grandfather-in a range of homeowners who don’t yet have permanent loan modifications under HAMP. It would cover those who applied for modifications by March 1 but have yet to submit all the paperwork; are waiting for answers from the lender or loan servicer; or have trial loan modifications but not permanent ones.

“We have to reduce spending in smart ways that have a positive long-term effect,” the congresswoman said. “Pulling the safety nets out from under our unemployed and Long Islanders who are days away from losing their homes will only make matters worse for them and burden our economy even further.”

The bill has a long way to go. If the House committee approves the measure, it would have to go the full House for a vote. Then the Senate would have to approve it, followed by the president’s signature.

Currently, HAMP is set to expire at the end of 2012.

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