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Wall Street Slams Plan With Sell-Off
Rep. Barney Frank (D-Mass.), chairman of the House Financial Services Committee, said he was concerned about the delay in the foreclosure plan, as well as the likelihood that $50 billion "understates the amount that we will need."
In a statement, Frank called on the administration for "some assurance that, assuming this works as we hope it will, there will be more money available" for foreclosure reduction. In the meantime, he reiterated his call for banks and other mortgage holders to halt foreclosure proceedings while awaiting details of the administration's plan.
The housing plan would set a government standard for the help homeowners should receive. That would end the hodgepodge approach under which lenders now rely on varying rules about how much and what type of help homeowners can receive.
Other lawmakers said they were perplexed by the lack of detail in the overall plan, both in Geithner's public comments and in private briefings arranged for key congressional staff members late Monday.
The "vague plan" makes it "evident to me that there's still dissension in the White House about what to do. And that roiled the markets," said Sen. Bob Corker (R-Tenn.), a member of the Senate Banking Committee who voted to create the TARP bailout program last fall. "It would have been better for the country had they waited till they had some clarity. What was announced today was more platitudes."
The committee's chairman, Sen. Christopher J. Dodd (D-Conn.), suggested by his questions that even the goals were unclear.
"What is the framework? What is the purpose here? And what do you hope to attain?" Dodd said.
The senior Republican on the panel, Sen. Richard C. Shelby (R-Ala.), grumbled that the proposal looked suspiciously like "son of Paulson," a reference to former Treasury secretary Henry M. Paulson Jr., whose administration of the first half of the TARP money, in Shelby's view, has failed.
Geithner insisted that his proposal is "fundamentally different" from Paulson's approach. But he acknowledged that the administration has laid out only "the broad architecture" of a plan, and said Treasury officials will return to Congress with more information, as well as proposals for legislative changes.
Staff writer Renae Merle contributed to this report.