06/15/2010 11:59 am ET Updated May 25, 2011

Democrats Throw Life Line to Unemployed in the Midst of GOP Tsunami

While the GOP is putting legislation in place to shove homeowners further underwater, Democrats are scrambling to throw them a lifeline.

Barney Frank (D-MA), Chair of the House Financial Services Committee, and Rep. Maxine Waters (D-CA), a ranking member of the Committee, sponsored an amendment to the Financial Reform Bill that would provide a two year bridge loan to struggling homeowners who have lost their job and can't afford their mortgage. The creation of the loan program could help as many as 400,000 unemployed homeowners avoid foreclosure.

The provision has made it through the House and the House-Senate Conference Committee For The Financial Reform Bill will decide on or around the 22nd of June whether it makes into the final bill.

The program is based on a successful model used in Pennsylvania. The provision would make loans to unemployed homeowners to help them pay their mortgage for a maximum of two years or until they find new employment, at which time they would be expected to repay the loan amount in full.  It would be paid for using federal dollars that have already been designated for foreclosure prevention and like the Pennsylvania model it is based on, could actually produce a profit for the federal government.

This program could be a win-win all around: Homeowners who have lost their jobs through no fault of their own would be provided a loan for two years while they looked for work and got back on their feet; banks would get their money for the next two years; and a portion of the funds allocated to the failing HAMP program wouldn't go to pay servicer salaries and bonuses.

The Obama administration has offered a forbearance of three months to unemployed homeowners, but considering the average unemployment averages 7.5 months, three months would only serve to sink homeowners deeper into financial and emotional despair.

The opposition to this amendment on the part of the GOP is astounding as they continue to hammer away at the middle class, side with the banks, and stack the deck in favor of Wall Street.

Last week Ryan Grim of Huffington Post reported that the House Republicans pushed legislation through the House to punish homeowners who are behind on their mortgages -- an ironic, cruel, and hypocritical use of big government to hold back the middle-class and already cash strapped homeowners. According to a GOP memo, sent last Thursday, "families that have chosen to stop paying their mortgage and instead use the extra money they are saving each month to "buy season tickets to Disneyland...take a Carnival cruise to Mexico...and go out to dinner more often."

"It [sic] disgusts me that the Republicans would use Big Government to interfere with the sanctity of contract," said Dean Baker, an economist with the progressive-leaning Center for Economic Policy and Research.

Of the hundreds of stories we've received at from homeowners losing their homes I have yet to read one in which someone is recounting the fabulous time they had on their Mexican cruise or their fun filled trip to Disneyland.

"We started the loan modification process in July and were notified our three trial payments would be close to what the reduced payment would be once approved for final modification 2,800. The 3 mos turned into 7 mos. During this time I am still unemployed and receive the maximum 405.00 weekly in unemployment. We faxed and resubmitted the same documents time and again. Every month we received late statements with no record," writes Lisa Bielawski of Long Island NY in her story - far from a trip to Disneyland or a lavish night on the town.

In addition to wanting to punish homeowners in default, the GOP has also taken to attacking the unemployed, insinuating that they are lazy and shouldn't receive government assistance in the form of much needed and deserved unemployment benefits. Georgia Republican Rep. John Linder suggested Thursday that extended unemployment benefits keep people from looking for work. "And even when businesses are willing to hire, nearly two years of unemployment benefits are too much of an allure for some," Linder said.

Foreclosures across the country have escalated to an estimated 300,000 a month. The banks and many of their allies in Congress would like us to believe that foreclosures are the result of irresponsible homeowners who simply don't want to pay their mortgage. The simple truth is that unemployment is now the main reason for foreclosure, accounting for 58 percent of all foreclosures according to NeighborWorks America - up from 49 percent in June of last year.

Massachusetts residents brought this problem to Congressman Frank's attention when 600 people met with him in November. The meeting was sponsored by the community improvement organizations that are part of the PICO National Network of faith based community organizations; Brockton Interfaith Community and the Massachusetts Communities Action Network.  Congressman Frank pledged to take action on this issue of unemployed homeowners facing foreclosure and has followed through by getting this amendment passed in the House bill - now its fate remains with the House-Senate Conference Committee on the Financial Reform legislation who will decide this month whether the provision becomes part of the final bill.

In the midst of a GOP tsunami against the middle class this is a buoy of sensibility.

What can you do? Contact your member of Congress, particularly if they sit on the House-Senate Conference Committee, and tell them you want this amendment in the final bill. We've provided a listing and sample letter at in this fact sheet provided by Massachusetts Communities Action Network. It contains more information about the amendment, a list of the House and Senate conferees, and a sample letter.