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Frank: Foreclosure fund may fall short
Three days after Treasury Secretary Timothy F. Geithner announced a $50 billion program to prevent home foreclosures, a powerful Democratic congressman who is deeply involved in the housing crisis suggested that $50 billion might prove to be just a down payment for a larger taxpayer-funded program. "We may need more than $50 billion for foreclosure [mitigation]," Barney Frank, chairman of the House Financial Services Committee, told reporters Friday at a breakfast sponsored by the Christian Science Monitor. If there is not a high re-default rate after the $50 billion is injected into Treasury's homeowner bailout plan, the government should consider spending more money to fund the plan, the Massachusetts Democrat said. Mr. Frank said deteriorating home prices were a major cause of the plunging value of mortgage-related assets, which have blown huge holes in the balance sheets of many of the world's largest banks. And foreclosure mitigation is the best way to slow down home-price depreciation, he argued. Posted by: Fred 2009-02-14 |
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