Larry Summers, top economic adviser of incoming US President Barack Obama, has assured House Financial Services Committee Chairman Barney Frank that the incoming president will commit up to $100 billion of the $350 billion Troubled Asset Relief Program financial bailout fund to help struggling homeowners avoid foreclosure.
According to Frank, the economic team of Obama also approved other goals and terms he included in a legislation under debate by members of the House.
The Democrat legislator's bill proposes to allocate a portion of the fund for abating foreclosures, limit the financial institution's spending of the bailout fund and executive pay.
Summers had submitted a letter that outlined the economic team's goals to congressional leaders. The letter includes Obama's request to apportion nearly a third of the remaining half of the $700 billion financial bailout fund to help stabilize the housing market by abating the increasing number of foreclosed properties.
However, several Democrats and Republicans pointed out that the letter submitted by Summers needs additional and specific information from Obama. After the release of the first half of the $700 billion financial bailout fund, Congress has given itself the authority to reject the spending of the remaining half of the bailout fund.
On his part, Obama explained that he needs the funds to enable him to provide loans to local governments, small businesses, consumers, and particularly to homeowners facing the threat of foreclosure.
Members of Congress have criticized the Bush Administration for not spending the bailout fund as originally intended.
However, Frank's bill which includes a proposal to allocate a portion of the bailout fund to help reduce the number of distressed properties, is not expected to pass the Senate because majority of Republicans have voiced opposition to the spending of the remaining Troubled Asset Relief Program fund, which includes setting aside a portion of the money for foreclosure prevention.
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