Rep. Frank introduces TARP Reform BillMortgagePress.comRep. Barney Frank, TARP, mortgage reform, TARP Reform and Accountability Act of 2009, HR 384, Troubled Assets Relief Program, foreclosure prevention
Rep. Barney Frank has introduced the "TARP Reform and
Accountability Act of 2009" (HR 384). The bill amends the Troubled
Assets Relief Program (TARP) provisions of the Emergency Economic
Stabilization Act of 2008.
The bill would require the U.S. Department of the Treasury
(Treasury) Secretary to develop a foreclosure prevention and
mitigation plan that commits up to $100 billion, but no less than
$40 billion, toward the plan. The plan would need to be developed
and approved by the Financial Stability Oversight Board by March
15, 2009, and the Treasury Secretary would be required to begin
committing TARP funds to implement the plan no later than April 1,
2009.
The programs under the plan would be required to apply only to
owner-occupied residences, and would be required to leverage
private capital to the maximum extent possible consistent with
maximizing prevention of foreclosures. The plan would also be
required to use one, or a combination of more than one, of the
following program alternatives:
• A guarantee program for qualifying loan modifications
under a systematic plan, which may be delegated to the Federal
Deposit Insurance Corporation (FDIC) or other contractor,
• Bringing costs of Hope for Homeowner (H4H) loans down,
either through coverage of fees, purchasing H4H mortgages to ensure
affordable rates, or both,
• A program for loans to pay down second lien mortgages
that are impeding a loan modification subject to any write-down by
existing lender the Treasury may require,
• Servicer incentives/assistance...payments to servicers
in connection with implementation of qualifying loan modifications,
and/or
• Purchase of whole loans for the purpose of modifying or
refinancing the loans (with authorization to delegate to FDIC).
The bill would also authorize the use of TARP funds for
automobile manufacturers and other uses, such as consumer loans and
commercial real estate loans. In addition, the bill would require
greater oversight and reporting requirements along with greater
restrictions on executive compensation. The bill also expands the
H4H program, requires the Treasury to develop a home buyer stimulus
program, and permanently increases the FDIC deposit insurance
limits.
For a copy of the bill, click
here.
