WASHINGTON --- Democrats are pressing the Obama administration to find a way out of the foreclosure crisis as they move ahead with plans to create a government agency that would police the market for risky or deceptive mortgages.

The agenda has the financial industry nervous that it will find itself buried in new regulations. Lawmakers suggested Wednesday that they won't bend.

"The fear that this will be some out-of-control entity ravaging the financial sector is unsupported by anything in American history," said Rep. Barney Frank, the chairman of the House Financial Services Committee.

He said his panel would begin reviewing legislation in July to charter the Consumer Financial Protection Agency. The bill would be included as part of a broader regulation reform bill.

Momentum behind the proposal came as 20 senators, including Majority Leader Harry Reid, D-Nev., and Senate Banking Committee Chairman Christopher Dodd, D-Conn., asked Treasury Secretary Timothy Geithner to develop a new strategy for preventing foreclosures.

Earlier this year, a Democratic proposal failed that would have forced banks to reduce a person's monthly mortgage if they fell into bankruptcy. Lenders lobbied against it, and President Obama didn't fight back, focusing instead on other economic initiatives that required industry cooperation.

Mr. Obama has relied on an anti-foreclosure program that encourages, but does not require, industry participation. Democrats say it hasn't been enough.