Foreclosure Help and Government Assistance

WASHINGTON, Oct 20 (Reuters) – Two top U.S. lawmakers urged President George W. Bush on Monday to appoint Federal Deposit Insurance Corp Chairman Sheila Bair to supervise a government-wide effort to reduce foreclosures.

Rep. Barney Frank, a Massachusetts Democrat who chairs the House Financial Services Committee, and Rep. Maxine Waters, a California Democrat, said in a letter that Bair would be ideal to coordinate the effort to mitigate foreclosures.

“Giving one official clear responsibility, particularly one as knowledgeable on the subject as Chairman Bair, will improve the effectiveness of the efforts of the federal government at a time when prompt and efficient action is most urgently needed,” the letter said.

FDIC spokesman Andrew Gray said Bair shares Congress and the administration’s commitment to tackling housing woes.

“The key to addressing our current economic situation remains avoiding preventable foreclosures and pursuing sustainable loan modifications for troubled borrowers to keep them in their homes,” he said.

Frank and Waters wrote Bush that the government has new powers to stabilize the housing market because of its takeover of mortgage giants Fannie Mae  and Freddie Mac and recent legislation.

They also note the $700 billion market rescue plan passed on Oct. 3, has language requiring the administration to protect homeowners.

“Certainly the government’s role will necessarily differ in regard to mortgages the government actually owns or controls and others that remain in pools backing securities in the private market,” the letter said. “The combination of tools available, however, allows us to have a substantial impact on the foreclosure crisis that continues to undercut economic recovery.

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