Rep. Barney Frank (D-Massachusetts) is once again pushing a mortgage relief program that would provide assistance to the growing number of homeowners who find themselves without a job. Under his proposal, some of the $12 billion that the Treasury has gotten back from its bailout of the nation’s financial institutions would be used to issue low-interest emergency loans to unemployed homeowners who are struggling to make their mortgage payments.

The Mortgage Bankers Association reported this week that the delinquency rate on home loans has reached a new record-high, and experts from across the industry agree that rising unemployment is now the primary driver behind the growing number of defaults and foreclosures.

While most lawmakers are pressing the administration to let TARP expire at the end of the year, Frank says he would support an extension of the $700 billion federal program, as long as the Treasury would use it to fund initiatives to tackle the nation’s unemployment, and provide assistance to jobless homeowners in particular.

TARP watchdogs have repeatedly said the lack of aid for homeowners who’ve lost their jobs is a glaring weakness in the Obama administration’s Making Home Affordable program. A congressional oversight panel said in a recent report that the $50 billion program “was not designed to address foreclosures caused by unemployment,” which has become an increasingly troublesome area for the mortgage industry.

Frank said earlier this week at a stop in his home state that his plan would allow jobless homeowners to continue to fulfill their mortgage obligations and stave off foreclosure until they can find new employment, noting that it’s credit-worthy borrowers who tool out solid, conventional loans that are now underwater and falling behind as result of the depressed economy.

Frank floated the same idea back in July to provide assistance to homeowners who’ve lost their means of paying their mortgage, but the proposal apparently got buried under legislators’ clamor to put a plan for financial regulatory reform to paper.

The initiative would essentially bring back a 1975 federal program that provides credit to Americans who’ve lost their jobs so they don’t also lose their home, with borrowers using their property to secure the loan.

It would use $2 billion from TARP to provide low-interest loans to unemployed homeowners who stand a good chance of being able to pick up their mortgage payments in the future. The emergency loans would carry a term of 12 months, but could be extended for an additional year if necessary.