On Monday December 16^th, House Speaker Nancy Pelosi said that she is directing House Financial Services Committee chairman Barney Frank, D-Mass to write legislation that would require the Treasury to move ahead with helping homeowners avoid foreclosure as a precursor to access to the second $350 billion in government bank bailouts fund.   At a news conference Pelosi said. “It was very clearly spelled out in the initial legislation that funds would be used for mortgage foreclosure forbearance,”

Spokesman for the House Financial Services Committee, Steve Adamske , said that Barney Frank has begun work on the bill Monday and expects it to be ready during the first week of the New Year.  There is a possibility that legislation could be expedited it the Treasury seek out the funds at an earlier timer. Adamske mentioned that that Frank is considering a variety of foreclosure mitigation conditions on the funds, which would include a provision to make a portion of the funds available for modifying mortgages which could help millions of American homeowners avoid foreclosure.

Adamske said that the bill that Frank is working on may also include provisions to expand the FHA Hope for Homeowners Program that which will refinance mortgages for distressed borrowers that can afford a new loan insured by the FHA.

The measure may also encourage the Treasury to allocate the funds to buy mortgage backed securities and individual mortgages as lawmakers expected the Treasury Dept to do shortly after Oct. 3 2008, when the Bush administration and Congress approved a $700 billion bank bailout fund. Instead, as the markets continued to plummet, Treasury Secretary Henry Paulson decided to use a provision in the new law to buy large minority stakes in financial institutions in an effort of rapidly reinstating confidence in the banks.

Federal Deposit Insurance Corp. chairwoman Sheila Bair is seeking $24.4 billion of the funds for a mortgage modification program she believes could help avoid 1.5 million foreclosures throughout the US.

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