BUSINESS
03/18/2010 05:12 am ET | Updated May 25, 2011

Barney Frank Calls For $4 Billion In TARP Funds To Help Unemployed Homeowners, Fight Urban Blight

A revision to the House financial reform bill adds $3 billion in federal aid to help unemployed people facing foreclosure and $1 billion to fight urban blight.

House Financial Services Committee Chairman Barney Frank added the funding -- which would use money left over from the government's bank bailout -- after the Congressional Black Caucus abruptly shut down a vote on the bill last month, citing concerns that neither Congress nor the Obama administration was doing enough to help minorities who have been disproportionately affected by the financial crisis.

The new money is included in Frank's broad, 135-page amendment to the Wall Street Reform and Consumer Protection Act of 2009, the committee's nearly 1,300-page bill that attempts to fix what the financial crisis exposed as outdated and woefully inadequate financial regulations. The legislation tackles derivatives, consumer protection, "too big to fail" financial institutions, and the credit rating agencies, among other issues.

In response to the CBC's concerns, Frank added $3 billion to help homeowners impacted by a job loss facing foreclosure, and $1 billion to help state and local governments buy and renovate foreclosed homes.

The assistance for the unemployed attempts to fill a gap in the administration's current foreclosure-prevention plan. Obama's plan, Making Home Affordable, largely targets people who still have jobs. Under Frank's proposal, qualified homeowners would be eligible to receive up to $50,000 in emergency assistance.

The money for local governments is designed to help with foreclosure-related blight. Governments can use the money to buy and redevelop abandoned and foreclosed homes. A preference shall be given "for the development of affordable rental housing," according to the bill.