Representative Elijah Cummings (D-MD) began circulating a “Dear Colleague” letter on March 25, 2011 asking other Representatives to be original co-sponsors on a bill he will introduce shortly to fund the NHTF and to help homeowners facing foreclosure. Mr. Cummings’s “Preserving Homes and Communities Act of 2011” is a companion bill to S. 489, introduced in the Senate by Senator Jack Reed (D-RI) (see Memo, 3/4).
Both bills would provide $1 billion for the NHTF from the profits made on the sale of “warrants” that Senator Reed requested be included in the Emergency Economic Stability Act of 2008, AKA TARP. In exchange for federal funds that kept banks from failing, the banks gave warrants the Treasury. A warrant is the right to purchase one share of stock at a specified price; the Treasury sells the stock and thus brings proceeds back to the federal government. So far, the sale of these warrants has yielded more than $8 billion.
To read Representative Cummings’s letter, go to http://www.nlihc.org/doc/Preserving-Homes-Communities-Act-2011.pdf