Democrats prepare hurdle to bank bailout

By Kevin Drawbaugh

WASHINGTON (Reuters) - Congressional Democrats are drafting legislation to demand that the White House do more to reduce home foreclosures before Congress will agree to release additional money for the $700 billion bank bailout program.

Looking toward a possible request for $350 billion more cash for the Troubled Asset Relief Program (TARP), House of Representatives Speaker Nancy Pelosi said on Monday she and Rep. Barney Frank were discussing a prerequisite bill.

She said the Bush administration has "totally ignored" a provision of October's original TARP law requiring strong efforts to reduce home foreclosures, which have soared this year since the bursting of a historic real estate bubble.

"Absolutely nothing has been done to respect that part of the legislation," Pelosi, a California Democrat, told reporters as she discussed the House's agenda in coming weeks.

She and Frank have talked about "legislation that insists that the provisions of the (TARP) law be honored, before we release any more funds," Pelosi said.

Legislation demanding more foreclosure mitigation will be ready within the next couple of weeks, said Steven Adamske, an aide to Frank, the Massachusetts Democrat who chairs the House Financial Services Committee.

Senate Banking Committee Chairman Christopher Dodd said last month he was willing to legislate if the financial sector failed to do more to curb foreclosures, restrain executive pay and modify mortgages to help struggling homeowners.

It was unclear whether the Pelosi-Frank bill would also address executive compensation and mortgage modification.