Treasury Secretary Henry Paulson, who has been on the receiving end of sharp criticism as of late for the direction he has taken the $700 billion Troubled Asset Relief Program (TARP), said yesterday in Washington, D.C., that new initiatives are under consideration, and he indicated that foreclosure prevention may be among them.
For weeks, Paulson has rebuffed lawmakers' assertions that the allocation of TARP funds has been mishandled, and one of the most common complaints has centered on a lack of aid to homeowners in foreclosure. But in his prepared comments Monday, Paulson said TARP managers are "continuing to examine potential foreclosure mitigation ideas that may be an appropriate and effective use of TARP resources."
He noted that the Bush administration has used a "variety of authorities to reduce avoidable foreclosures," citing the Federal Deposit Insurance Corp.'s loan modification program with IndyMac and the government-sponsored enterprises' streamlined modification program, among others. Paulson reemphasized that unfreezing credit is the best solution for preventing foreclosures.
"As I have said for some time, the housing correction is at the root of our economic and market difficulties," he said. "The most important thing we can do to mitigate foreclosures and progress through the housing correction is to reduce the cost of mortgage finance, so more families can afford to buy a home, and so homeowners can refinance into more affordable mortgages."
SOURCE: U.S. Treasury