Democrats Push New Housing Bail-Out Agenda

Democrats are considering using TARP funds for a new purpose which is to bail out homeowners. Rep. Maxine Waters (D- Calif.) pushed a proposal that would channel $3 billion towards a mortgage relief for jobless home-owners. These funds would be taken out from the ‘Troubled Assets Relief Program (TARP) fund.

House Financial Services Committee Chairman, Barney Frank (D-Mass.), signed on this proposal on Monday. The said proposal also includes an additional $1 billion to be released to local and state governments for acquiring foreclosed properties. There are more than 100 such proposals pushing sweeping reforms, scheduled to be considered in the full house this week.

Democrats are also planning to vest bankruptcy judges with power to modify mortgage terms such as lowering interest rates or decreasing the principal amount owed. This measure had been put in front of the house earlier this year and was passed. However, it was eventually turned down by the senate.