Using some of the interest paid back to the government on money lent under TARP, Rep. Barney Frank is proposing a bailout for homeowners who are having difficulty making mortgage payments due to unemployment.
The Obama administration’s plan to fix the mortgage crisis has been criticized for being light on aid to unemployed homeowners. A congressional oversight panel revealed in a report last month that the $50 billion program “was not designed to address foreclosures caused by unemployment,” now the main cause of default.
Franks proposal, actually developed by Congress in the 1970s but never funded, was part of legislation introduced in September titled the Main Street TARP bill. Rep. Barney Frank is chairman of the House Financial Services Committee.
“These are people who are very responsible, very thoughtful. They got a home, it’s above water, they’ve got equity, but they’re unemployed, and you can’t afford mortgage payments on unemployment,” said Frank.
If passed, it would provide $2 billion for low-interest loans to unemployed homeowners who have the prospect of being able to continue making mortgage payments in the future.
Rep. Barney Frank is chairman of the House Financial Services Committee.
DHW asks: Do you know anyone in default of their mortgage due to a loss of employment?