WASHINGTON - A program President Bush is expanding to help struggling homeowners head off foreclosure has helped only 1 percent of the borrowers it originally set out to assist and is expected to reach just 100,000 more by the end of the year.
The administration claims the initiative has reached 60 times more homeowners and will help a half a million by year’s end.
Rushing to counter Democratic calls for a broad housing rescue to help between 1 million and 2 million people avoid losing their homes, the Bush administration announced Wednesday it will expand a Federal Housing Administration program to allow more homeowners who have fallen behind on their mortgage payments refinance into more affordable government-insured loans.
However, that program, created in August 2007 and called FHASecure, has helped fewer than 2,500 such borrowers to date — a tiny fraction of the 240,000 the administration first projected, and the 150,000 the White House now claims.
The numbers are important because Bush and congressional Democrats are clashing over how broad a government response is needed to address the housing crisis that may have more than 2 million Americans staring at foreclosure this year.
Both sides are coalescing around the idea of having the FHA step in to help more homeowners refinance into government-backed loans, but there remains a wide gulf over how many people should be eligible — and how much taxpayer money should be put at risk.
Rep. Barney Frank, D-Mass., the House Financial Services Committee chairman, is pushing a measure under which the FHA would insure $300 billion in restructured loans, while Sen. Christopher J. Dodd, D-Conn., the Senate Banking Committee chairman, wants the agency to back $400 billion. They say their plans would reach between 1 million and 2 million homeowners.
THE SPIN:
The Bush administration said last August that FHASecure would help nearly a quarter of a million homeowners refinance and keep their homes. Bush said in a March 29 radio address that it had helped 130,000 homeowners, and a White House fact sheet the next week claimed it had reached 140,000.
White House spokeswoman Dana Perino used the 150,000 figure with …
