President-elect Barack Obama plans to use $50 billion to $100 billion of Troubled Asset Relief Program funds on a foreclosure prevention plan, according to Lawrence Summers, director-designate of the National Economic Council.
In a letter sent Thursday to congressional leaders, Mr. Summers also said banks getting money under the program "will be required to implement mortgage foreclosure mitigation programs."
Mr. Summers' letter was the second sent to lawmakers this week; it fleshed out a few details of how the new administration plans to use the remaining $350 billion of Tarp funds.
It came as the Senate debated — and then rejected, 52 to 42 — a bill that would have blocked the money's release.
He did not elaborate on the types of program the government would employ or would require of banks. But he said stopping foreclosures was a top priority of the administration.
"We will implement smart, aggressive policies to reduce the number of preventable foreclosures by helping to reduce mortgage payments for economically stressed but responsible homeowners, while also reforming our bankruptcy laws and strengthening existing housing initiatives like Hope for Homeowners," he wrote.