"Hope for Homeowners was sponsored by Rep. Barney Frank (D-MA), the powerful head of the House Financial Services Committee.
'The problem was when we passed it, and it's interesting how things have changed, we were under pressure from the right,' he says. 'Remember, it was the Bush administration. So to get it passed we had to dumb it down, which I regretted, but I thought it was better than nothing.'
Frank says some lawmakers didn't want to spend taxpayer money on what they saw as a bailout for homeowners. So the lawmakers basically tightened the lid on the program. 'The fees were too high. The restrictions on who could enter it were too much,' Frank says.
Critics say homeowners didn't like the program, and most couldn't qualify anyway. There were problems with the way the law dealt with second mortgages such as home equity loans. And, perhaps most importantly, there was also no real money in it for the lenders who were supposed to do the work to refinance the borrowers.
'We cut it back, and then the Senate cut it back even further,' says Frank, adding that the program got cut back so far it just became unworkable."