$2 Billion program part of package designed to prevent foreclosures.
Congressman Barney Frank wants to prevent unemployed homeowners from losing their houses by giving them government money to pay their mortgages.
The Newton Democrat, chairman of the House Financial Services Committee, will hold a hearing in Washington today on his proposal to spend $2 billion to prevent foreclosures on borrowers who don’t qualify for other mortgage aid programs because they are unemployed. The funds would come in the form of loans, and borrowers would have to pledge their homes as security.
The catalyst for the proposal is a growing jobless rate that reached a 26-year high of 9.5 percent in June, Frank said.
“It’s not a forgiveness program,’’ Frank said yesterday in an interview with The Boston Globe. “We do have serious unemployment.’’
The proposal is a revival of a 1975 program called the Emergency Housing Act, which was enacted during a recession. Frank would fund his program with the dividends the US government is getting from financial companies that received taxpayer funds from the $700 billion industry bailout.
