Lawmakers Reject Legal Aid Money for Troubled Borrowers

U.S. House Republicans on Friday blocked a last-minute effort to allow foreclosure-prevention funds to be directed to legal aid groups, arguing it was an inappropriate use of financial rescue money.

Lawmakers failed to pass a bill sponsored by Rep. Marcy Kaptur (D., Ohio) that would allow those groups to receive money through a federal program to assist homeowners on the verge of foreclosure.

The bill needed a two-thirds vote to pass because it was brought up under a special House procedure intended for uncontroversial issues. It fell short, in a 210-145 vote, largely along party lines.

The Treasury Department has allocated $7.6 billion to 18 states and the District of Columbia through the Hardest Hit fund, which uses money from the $700 billion Troubled Asset Relief Program.

Currently, legal aid groups are not able to receive such assistance. Treasury Secretary Timothy Geithner said in a letter to lawmakers Friday that he supports legislation allowing them to do so.

Republicans said the measure amounts to a continuation of the deeply unpopular government bailouts. Speaking on the House floor, Rep. Lee Terry (R., Neb.) said Democrats are “attempting to bring the bailout back to life for the sole purpose of showering taxpayer money on community groups that provide legal assistance.”

You can check out the rest at the WSJ here…

The Bill: Aiding Those Facing Foreclosure Act of 2010

Dec 17, 2010: This bill failed in the House of Representatives by roll call vote. The vote was held under a suspension of the rules to cut debate short and pass the bill, needing a two-thirds majority. This usually occurs for non-controversial legislation. The totals were 210 Ayes, 145 Nays, 78 Present/Not Voting.

DETAILED VOTE COUNT BELOW

HR 5510 IH

111th CONGRESS

2d Session

H. R. 5510

To amend the Emergency Economic Stabilization Act of 2008 to allow amounts under the Troubled Assets Relief Program to be used to provide legal assistance to homeowners to avoid foreclosure.

IN THE HO– USE OF REPRESENTATIVES

June 10, 2010

Ms. KAPTUR introduced the following bill; which was referred to the Committee on Financial Services


A BILL

To amend the Emergency Economic Stabilization Act of 2008 to allow amounts under the Troubled Assets Relief Program to be used to provide legal assistance to homeowners to avoid foreclosure.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

This Act may be cited as the ‘Aiding Those Facing Foreclosure Act of 2010’.

SEC. 2. FORECLOSURE AVOIDANCE ASSISTANCE.

Section 109 of the Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5219) is amended by adding at the end the following new subsection:

‘(d) Legal Assistance-

‘(1) — USE OF FUNDS- The Secretary may use any amounts made available under this title that are not otherwise obligated to provide assistance to nonprofit counseling intermediaries and nonprofit legal organizations to provide legal assistance to homeowners of owner-occupied homes consisting of from one to four dwelling units who have mortgages on such homes that are in default or delinquency, in danger of default or delinquency, or subject to or at risk of foreclosure, to assist such homeowners with legal issues directly related to such default, delinquency, foreclosure, or any deed in lieu of foreclosure or short sale.

‘(2) PROHIBITION ON LITIGATION- Paragraph (1) may not be construed to authorize the use of any amounts made available under this title to provide, obtain, or arrange on behalf of a homeowner, legal representation involving or for the purposes of civil litigation that is not directly related to any such default, delinquency, foreclosure, or any deed in lieu of foreclosure or short sale.

‘(3) AUTHORIZATION- Amounts used as described under paragraph (1) shall be deemed to be for actions authorized under this title.’.

~

4closureFraud.org

~

House Vote On Passage H.R. 5510 Aiding Those Facing Foreclosure Act of 2010