Tag Archives: TARP

With a common goal of economic recovery, Congress and the Federal Reserve diverge on the best means to that end. Should the housing sector finance the government's economic policies, or should the government help boost the housing sector? Federal Reserve Chairman Ben Bernanke submitted a white paper to Congress last week as a framework for policymakers to help the housing market, but that move has drawn the ire of at least one senator.

Last month the Occupy Oakland movement announced its intention to occupy vacant properties. On Tuesday, Occupy Oakland was one of 25 local Occupy activist groups to observe a national 'Occupy Our Homes' day. Organizers say the movement is supported by thousands who will be standing up for their neighbors in a struggle ""against a system that places financial gain above the human need for shelter."" Occupy groups from Atlanta to Brooklyn to California made it clear that this is only the beginning of their fight against foreclosure.

The Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP) announced Monday that it intervened to block 40 mortgage modification schemes advertised on Yahoo! and Bing. In response, Microsoft terminated 400 advertising contracts with the perpetrators of the schemes. Microsoft is the founder of Bing, and its technology backs Yahoo! Search. Monday's notice follows an announcement last week in which SIGTARP reportedly shut down 85 mortgage modification scams advertised on Google.

Federally funded mortgage relief programs continue to struggle to reach homeowners, according to the Special Inspector General of the Troubled Asset Relief Program (SIGTARP). A new report from the watchdog agency says only $2.5 billion of the $45.6 billion in TARP funds earmarked for housing programs has been spent. Regarding the Home Affordable Modification Program (HAMP), the agency estimates that as many as 600,000 homeowners who are eligible will not receive a permanent mod before the program expires next fall.

A recent report reveals banks that received federal funding from the Troubled Asset Relief Program (TARP) have since increased their risk level by about 10 percent. Professors from the Michigan Ross School of Business found that after receiving capital from taxpayers, banks that were bailed out shifted their credit origination toward riskier mortgages, as measured by the borrower's loan-to income ratio and high-risk indicators based on the loan rate. The study concludes that TARP recipients absorbed the riskier mortgages on the market.

A federal grand jury in San Francisco has indicted two former bank executives of the now-defunct United Commercial Bank for using fraudulent accounting maneuvers to misrepresent loan losses to federal agencies as the bank took money from taxpayers through the Troubled Asset Relief Program (TARP). The Securities and Exchange Commission has filed separate civil charges accusing the same two executives and the former CEO of misleading investors about the bank's mounting loan losses, to the tune of $65 million.

Former President George W. Bush addressed an audience of participants throughout the default servicing industry Tuesday morning at the Five Star Default Servicing Conference and Expo. Touching on a few challenging moments in his presidency, including the September 11 attack, Bush said, ""You have to surround yourself with people whose judgment you trust."" Bush discussed the difficult decision to administer TARP in 2008.

Timothy Massad has been confirmed by the Senate as Treasury's assistant secretary for financial stability, responsible for overseeing the implementation and wind down of the Troubled Asset Relief Program including initiatives to address the housing and foreclosure crisis. While Treasury has won several Senate confirmations in recent days, the Department is at risk of losing its topmost officer. Treasury Secretary Tim Geithner has notified President Obama that he will resign if lawmakers don't raise the debt ceiling by the early August deadline.

On Monday the Treasury announced that it will wind down the remaining $142 billion mortgage-backed securities (MBS) portfolio it carries. This news comes just as the federal government is making plans to drastically reduce its role in the mortgage marketplace. Beginning this month, Treasury plans to sell up to $10 billion in agency-guaranteed MBS each month, with the goal of fully extinguishing the portfolio in a little over a year and turning a profit for taxpayers.

There were many who opposed the hefty bank bailouts after the financial crisis set in, and they still have their ethical argument against the government's decision, but the fiscal argument is growing faint. Treasury announced this week that over 99 percent of the funds disbursed to banks through the Troubled Asset Relief Program (TARP) have now been recovered. Even the largest bailout of all - that of Fannie and Freddie - is expected to shrink by nearly half over the next 10 years.