Democratic lawmakers are challenging fiscal hawks who want a housing recovery minus the extra government spending by introducing two foreclosure prevention bills that rely on public funds. The bills in question — Senate Bill 690 and H.R. 1238 — would create a new executive position under the Treasury Department to advocate for homeowners and free up remaining TARP funds to help distressed homeowners with legal assistance. The first bill — Senate Bill 690 proposed by Sen. Al Franken (D-Minn.) — would create an Office of the Homeowner Advocate to work with housing lawyers and individuals by improving the functioning and performance of the Home Affordable Modification Program, according to the proposed bill. Under the provisions of the bill, a director would be appointed to the advocacy department to report directly to the assistant secretary of the Treasury. Meanwhile, House Bill 1238, which was introduced by Rep. Marcy Kaptur (D-Ohio), would amend legislation to allow monies allotted under  TARP to help pay for legal aid to homeowners facing foreclosure. Under the proposed bill, the funds would be used “to provide assistance to nonprofit counseling intermediaries and nonprofit legal organizations to provide legal assistance to homeowners of owner-occupied homes consisting of from one to four dwelling units who have mortgages on such homes that are in default or delinquency, in danger of default or delinquency, or subject to or at risk of foreclosure, to assist such homeowners with legal issues directly related to such default, delinquency, of foreclosure or short sale.” The proposals are facing resistance in times when nonprofits like FreedomWorks, an advocacy group that pushes for limited government spending, are pushing back over U.S. debt levels. “I think the whole real estate market is still settling itself out,” said Wayne Brough, vice president of research and chief economist for FreedomWorks. “A lot of these programs would probably delay the restructuring that is going on and will keep homes in limbo. He said it’s that effect that will “keep the market from getting back to a sustainable equilibrium.” As far as using TARP funds for legal advocacy, Brough said, “There have already been programs in place. It’s not a question of advocacy, it’s a question of restructuring. There were purchases made in the past that should not have been made. There are already advocacy and legal programs out there. To just pile on more doesn’t get to the root of the problem.” Write to Kerri Panchuk.