Congress Yet To Decide On the Release of Foreclosure Bailout Funds- By: John Cutts
The Congress is left with merely less than two weeks to decide on whether the second half of the $700 billion bailout fund would be released or not. Supposedly, the fund is to be used to address the persisting foreclosure crisis in the country.
Barney Frank, Chairman of the House Financial Services Committee, is looking forward that by Wednesday or Thursday, his legislation would have been deliberated by Congress. The said legislation is expected to be deliberated by Senate on Thursday.
Based on the bill, transparency and openness is expected to be practiced when administering the funds. Also, a required $50 billion worth of bank rescue funds would be utilized in implementing a program that would help distressed homeowners in mortgage modification in order to prevent foreclosure.
Time is of essence in this concern. Congress is allowed only until January 27 to disapprove the release of funds. Also, if the proposed legislation by Frank is to be attached to the release, it has to be approved on or before the same date. Otherwise, the amount is mandatorily allotted to the Treasury without any provisions.
At this early point, a number of lawmakers have already expressed opposition to the bailout. Some say that the release of funds would lead to a federal deficit while others argue that a bailout would not help in genuinely solving the foreclosure problem and would only make people dependent on the government.
Meanwhile, Barney Frank said that without the funds, foreclosure relief would not be achievable. A substantial part of the $350 billion fund would be used in modifying mortgages to help save homeowners from foreclosure.
A number of Democrats expressed support to the legislation of Frank. They said that if the bill is approved, it will definitely relieve distressed homeowners of the burden of mortgage and ensuing foreclosure. Furthermore, they said that failure to act only worsens the problem.
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John Cutts has been educated in the finer points of the foreclosure market over 5 years.