This week President-elect Barack Obama requested that the $350 billion remaining federal bailout fund be released by congress; but many on both sides of the aisle are leery about releasing another bailout package with few strings attached and little accountability of financial institutions.
Congressman Virginia Fox is leading efforts to pass a resolution blocking the release of bailout funds to banks. But Obama has threatened to veto any bill that aims to block bail out funds designed to reduce foreclosures and unfreeze the credit markets. President-elect has also promised to “toughen conditions for recipients of the bailout money” and “reform the oversight of the TARP program.”
The biggest concern of most lawmakers and taxpayers is “what are the results?” of this massive bailout already given to banks. The bailout was supposed to rescue nearly bankrupt banks and help homeowners avoid foreclosure .
So far what we see is that struggling banks who have received bailout funds have so far avoided bankruptcy but homeowner foreclosures continue to rise. If we truly want to utilize the bailout fund to help homeowners avoid foreclosure then tools need to be put into place that can accurately measure the effectiveness of the bailout money in reducing the amount of foreclosures.
Otherwise, regardless of the bailout fund or its amount we will see an increase in foreclosures and personal bankruptcy as the economy worsens.