Frank Wants $2 Billion to Stop Foreclosures

Written by: Steve Cook   Mon, November 23, 2009 Beyond Today’s News, Crisis Programs

Once again, Chairman Barney Frank (D-MA) is pushing to use left over TARP money to help unemployed homeowners stave off foreclosure.  He pushed hard for a similar provision in January, but the Administration put its money on the HAMP program.

Nearly a year later, foreclosures driven my unemployment and the ailing economy are skyrocketing, HAMP has hardly done any better than its disastrous predecessor, HOPE Now, and Frank is at it again.  This time, the chairman of the House Financial Services Committee, just might succeed in pressuring the Administration Obama to use $2 billion from the Troubled Asset Relief Program to offer low-interest loans to Americans who have lost their jobs and are in danger of losing their homes.

In Massachusetts last week, Frank said the aid would not be for irresponsible people who bought homes they could not afford or borrowed money with subprime mortgages.  Rather, it would be for people who bought their houses years ago and were making regular loan payments until unemployment caused them financial problems.
In 2008 Congress and Bush originally authorized $700 billion to save the banks from ruin when the financial crisis peaked late last year. About $210 billion of the total was never spent.
About 47 banks have repaid $72.9 billion principal of loans from the TARP program. Another $12.4 billion in interest and dividends has been paid to the government, according to the program’s inspector general.  General Motors said Monday it intends to start repaying its loans this quarter.

Frank said he proposes taking the $2 billion in mortgage help from the interest paid on the government loans.  Frank said he believes the administration already has the authority to extend the financial help to homeowners from so-called TARP money without permission from Congress. He said he has been pushing the administration to act.

Obama, however, may be more interested in using the leftover TARP money to reduce the deficit.

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