Obama Wants Access to Financial Bailout Funds for Foreclosure Prevention

A week before his inauguration, incoming President Barack Obama is busy preparing to meet with members of Congress to attempt to gain a share on the remaining 50 percent of the estimated $700 billion Troubled Asset Relief Program (TARP) bailout fund.

The president-elect plans to meet with Democrats in the Senate while his transition team has prepared to dispatch representatives to meet with Republicans in the Senate for possible deliberation or vote on whether to allocate the TARP fund for foreclosure prevention and boost the flow of credit to ease the economic turmoil.

Meanwhile, the Financial Services Committee has scheduled a hearing to discuss the TARP in advance of a legislation proposed by Barney Frank, chairman of the committee, that would impose restrictions on beneficiaries of the funds and require disbursement to stem mortgage foreclosures.

Acting on Obama’s behalf, outgoing President George W. Bush asked the Congress for a share to the remaining 50 percent of the funds lawmakers authorized to help the country’s financial sector.

A deadline of 15 days has been set for Congress to reject Bush’s request. Lawmakers have criticized the way the Bush Administration handled the fund. They claimed that the way the Treasury Department handled the fund was muddled and misleading and lacks accountability and that it has failed to reduce the number of foreclosed homes in the country.

In the event that the Senate refused a request to reject the funds, Obama can start releasing the money one week after he officially assumes office on January 20, 2009.

Senate Majority Leader Harry Reid praised Obama’s efforts to include foreclosure prevention on the program and require accountability and transparency for the disbursement of funds.

Meanwhile, the Financial Deposit Insurance Corp. has issued a directive requesting financial institutions to monitor how the federal funds help them and homeowners who are facing foreclosure.