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Frank seeks US loans for those in foreclosure

JOBLESS LOSING THEIR HOMES Of the most recent jobs report, Barney Frank said: ‘I was disappointed. I expected a downward trend.’ JOBLESS LOSING THEIR HOMES
Of the most recent jobs report, Barney Frank said: ‘I was disappointed. I expected a downward trend.’
By Alison Vekshin
Bloomberg News / October 6, 2009

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WASHINGTON - US Representative Barney Frank, chairman of the House Financial Services Committee, plans to introduce a bill next week that would steer $2 billion in rescue funds repaid by banks to foreclosure relief for unemployed workers.

Money from the $700 billion Troubled Asset Relief Program should be loaned to Americans without jobs and at risk of losing their homes, Frank, a Massachusetts Democrat, said yesterday.

“We have a new wave of foreclosures coming not from people who got loans that they shouldn’t have gotten, but people who got loans that they clearly could afford but prolonged unemployment has put them in a tough situation,’’ he said.

Job losses accelerated last month and the US unemployment rate reached the highest level since 1983, the Labor Department reported Oct. 2, signaling that a recovery may be slow to develop. The number of properties entering foreclosure rose 18 percent in August from a year earlier, data provider RealtyTrac Inc. show.

“I was disappointed,’’ Frank said of the employment report. “I expected a downward trend.’’

Frank, who is leading debate in Congress on the overhaul of regulation of financial institutions, said his panel will begin in January to consider policies to create jobs, after it finishes work on the regulatory legislation.

“It does look now that jobs are not going to come back fully to the extent that a socially healthy society needs,’’ Frank said. “The time has come for us to start thinking about what we can do in terms of national policy to promote employment.’’

Frank said the administration should remove troops from Iraq in six months instead of at the end of 2011 and redirect the savings to create jobs.

“The thing to do now would be to withdraw the tens of billions we’re putting into Iraq and reprogram that into job-creation efforts in the US,’’ Frank said. A second economic stimulus package is something “people are going to be looking at,’’ he said.