Bill Calls for TARP Money for Loan Mods

As the Senate moved closer to passing an $827 billion economic stimulus bill, lawmakers added language that directs the Treasury Department to use at least $50 billion of the Troubled Asset Relief Program funds for loan modifications. Obama administration officials had stated several times that they plan to use $50 billion to $100 billion of the TARP to prevent foreclosures and the administration might unveil its plan on Feb. 10. But the sponsor of the amendment, Sen. Christopher Dodd, D-Conn., said the Bush administration refused to use TARP for loan modifications and he doesn't want to be burned again. Sen. Dodd's amendment also includes changes to Hope for Homeowners to make the Federal Housing Administration refinancing program more attractive to borrowers and servicers. The Senate is slated to vote on stopping a Republican filibuster of the stimulus bill this evening and vote on Feb. 10 on passage of the compromise stimulus bill put together by Sens. Susan Collins, R-Me., and Ben Nelson, D-Neb. The $15,000 homebuyer tax credit is part of the compromise bill. But the National Association of Home Builders and other supporters are concerned the tax credit could be pared back when House and Senate conferees sit down to hammer out a final bill. "One of the most damaging - from a stimulative impact - would be to knock it down to first time homebuyers," NAHB chief executive Jerry Howard said.