WASHINGTON — Congressman Barney Frank, (D-Mass.) chairman of the House Committee on Financial Services has offered a rebuttal to White House claims in a letter sent to Speaker Nancy Pelosi (D-Calif.) regarding elements of Chairman Frank's housing rescue proposal.

Frank's next-day response to a letter sent from The White House to Pelosi on April 9 keyed on one issue the White House opposed: allowing lenders or servicers to sell bad loans to the taxpayers through an auction process, clearinghouse, or other wholesale mechanism.

“I agree entirely, and for that reason the discussion draft considered by the Financial Services Committee in (today's) hearing does not include such a mechanism. There have been several proposals for outright purchase of loans by the government, some of which could give rise to the kinds of concerns you express. The authority provided in Title II of our proposal, however, would not result in government purchase of loans, but instead would provide authority to permit a streamline “wholesale” process to produce refinancing loans that meet FHA insurance standards. Loans under this facility, as with the “retail,” loan-by-loan facility in Title I, would have to be re-underwritten fully with complete documentation of income and appraised property value.”