Aid for homeowners emphasized

House leaders: Refocus rescue

House Financial Services Committee chairman Barney Frank and House Speaker Nancy Pelosi want more of the bailout funds directed to struggling homeowners facing foreclosure. (Larry Downing/Reuters)

WASHINGTON - Congressional Democrats are drafting legislation to demand the White House do more to reduce home foreclosures before Congress will agree to release additional money for the $700 billion bank bailout program.

Looking toward a possible request for $350 billion more cash for the Troubled Asset Relief Program, House Speaker Nancy Pelosi said yesterday she and Representative Barney Frank, a Newton Democrat, were discussing a prerequisite bill.

She said the Bush administration has "totally ignored" a provision of October's original TARP law requiring efforts to reduce foreclosures, which have soared this year since the bursting of a historic real estate bubble.

"Absolutely nothing has been done to respect that part of the legislation," Pelosi, a California Democrat, told reporters as she discussed the House's agenda in coming weeks.

She and Frank have talked about "legislation that insists that the provisions of the [TARP] law be honored, before we release any more funds," Pelosi said.

Legislation demanding more foreclosure mitigation will be ready within the next couple of weeks, said Steven Adamske, an aide to Frank, who chairs the House Financial Services Committee.

Senate Banking Committee chairman Christopher Dodd said last month he was willing to legislate if the financial sector failed to do more to curb foreclosures, restrain executive pay, and alter mortgages for homeowners.

It was unclear whether the Pelosi-Frank bill would also address executive compensation and mortgage modification.

It was also uncertain when or if the Bush administration would ask Congress to release the second half of TARP funding. Of the $350 billion already released by Congress, only $15 billion remains uncommitted.

The administration said Friday it might dip into the TARP to aid struggling US automakers, which failed Thursday to win a separate bailout of their own from Congress.

Pelosi said yesterday she expects the Bush administration will use the TARP to help the automotive industry.