Bailouts

Treasury Now Sees Profit From Bailouts

Posted on Monday, April 04, 2011

Take your pick: A $100 billion loss. A nearly $24 billion profit. A $100 billion profit. When it comes to calculating the bill for the government’s bailout of banks, insurers, automakers and the ailing housing market, the numbers have been all over the map. But on Wednesday, Treasury officials l...

Obama Treasury Celebrates Bailout Profits While Ignoring Costs, Legacy

Posted on Monday, April 04, 2011

NEW YORK -- On Wednesday, the Treasury Department celebrated the fact that its $250 billion investment in the nation's banking system has officially made money. What's more, the entirety of the federal government's efforts to rescue a financial system that sowed the seeds of its own demise will also...

Where the Bailout Went Wrong

Posted on Monday, April 04, 2011

Washington TWO and a half years ago, Congress passed the legislation that bailed out the country’s banks. The government has declared its mission accomplished, calling the program remarkably effective “by any objective measure.” On my last day as the special inspector general of the bailout progra...

Federal Reserve Must Disclose Emergency Loans To Banks, Supreme Court Rules

Posted on Monday, April 04, 2011

WASHINGTON: The Supreme Court let stand a ruling that the U.S. Federal Reserve must disclose details about its emergency lending programs to banks during the financial crisis in 2008. A group representing major commercial banks had asked the high court to reverse a ruling by a federal appeals court...

AIG Expects Other Bids For Their Former Subprime Bonds

Posted on Monday, April 04, 2011

American International Group (AIG.N) expects others to bid for the mortgage-backed securities that it has offered to pay $15.7 billion to buy back from the U.S. government, the insurer's chief executive told the Wall Street Journal. AIG disclosed the offer it made to the Federal Reserve earlier thi...

Treasury’s TARP Investment Chief to Step Down

Posted on Monday, April 04, 2011

David N. Miller, the chief investment officer of the Treasury Department’s bailout program, is planning on leaving the government at the end of the month to return to the private sector. Since the onset of the financial crisis, Mr. Miller, a former Goldman Sachs investment banker, has worked for tw...

Supreme Court Denies a Move to Bar the Details of a Fed Bailout

Posted on Monday, April 04, 2011

WASHINGTON — The Federal Reserve will publish new details about its emergency lending to banks during the 2008 financial crisis after the Supreme Court on Monday rejected an industry appeal for secrecy. The Fed said it would release detailed information soon about its main emergency aid program, t...

Keycorp Plans To Repay Entire $2.5 Billion TARP Bailout

Posted on Tuesday, March 22, 2011

Keycorp said on Friday that it planned to repay $2.5 billion in U.S. government bailout funds, becoming one of the latest banks to shake off the lingering effects of the financial crisis. The Cleveland-based bank plans to raise $625 million through a common stock offering, which it will use to exit...

TARP’s Watchdog: A Tough Act to Follow

Posted on Tuesday, March 22, 2011

THE American taxpayer will lose a rare straight shooter when Neil M. Barofsky, the special inspector general for the Troubled Asset Relief Program, leaves his post on March 30. In his frequent testimony before Congress and in the nine quarterly reports and 13 audits his office has published, Mr. Bar...

Congressional Oversight Panel: TARP Helped Perpetuate A 'Too Big To Fail' System

Posted on Sunday, March 20, 2011

WASHINGTON - The watchdog panel for the $700 billion bank bailout faulted the U.S. government for the last time on Wednesday, saying the program helped underpin the perception that federal authorities will always prevent troubled financial firms from failing. In its final report on the bank bailout...

Bank Bailouts Close to Breaking Even, GSEs' Projected Price Tag Shrinks

Posted on Sunday, March 20, 2011

When the federal government stepped up with its pockets full of cash to bail out the nation’s floundering financial system nearly three years ago, public outrage was widespread as critics lamented the big bill being passed on to American taxpayers. Those that opposed the hefty handouts still have ...

The Truth About the Financial Crisis, Part II

Posted on Monday, February 14, 2011

Jennifer S. Taub [1] is a Lecturer and Coordinator of the Business Law Program at the Isenberg School of Management [1], University of Massachusetts, Amherst. Her research interests include corporate governance, financial regulation, investor protection, mutual fund governance, shareholders rights a...

GM Drops U.S. Loan Application After Turnaround

Posted on Friday, February 04, 2011

WASHINGTON - General Motors Co has withdrawn its application for $14 billion in subsidized loans from the U.S. Department of Energy, saying it has the financial strength to fund investment in more fuel-efficient and electric vehicles on its own. The move could provide a public-relations boost to ...

Bernanke: All But One Major Firm Was At Risk In 2008

Posted on Friday, February 04, 2011

WASHINGTON - Twelve of the 13 most important U.S. financial firms were at the brink of failure at the height of the credit crisis in 2008, according to previously undisclosed remarks made by Federal Reserve Chairman Ben Bernanke in November 2009 to an investigative panel. The deeply divided Financi...

Goldman Sachs Got Billions From AIG For Its Own Account, Crisis Panel Finds

Posted on Friday, February 04, 2011

Goldman Sachs collected $2.9 billion from the American International Group as payout on a speculative trade it placed for the benefit of its own account, receiving the bulk of those funds after AIG received an enormous taxpayer rescue, according to the final report of an investigative panel appointe...

STATISTICAL INDICATORS - Treasury's Toxic Asset Funds Up 27 Percent

Posted on Thursday, January 27, 2011

The U.S. Treasury's toxic asset funds have gained 27 percent since they were created to help revive the mortgage-backed securities market, according to data expected to be released later on Monday. As part of the government's deeply unpopular $700 billion bailout program, the funds were set up to...

House oversight committee to hear testimony from TARP watchdog

Posted on Thursday, January 27, 2011

Rep. Darrell E. Issa (R-Calif.) on Wednesday will use his first hearing as chairman of the House Committee on Oversight and Government Reform to take a critical look at the Obama administration's bank bailouts and its efforts to help homeowners avoid foreclosure. On tap is a warning from a federal...

Is Another Bank Bailout Coming?

Posted on Saturday, January 15, 2011

Everything I am reading these days on financial issues points to some serious reckoning soon to come, especially because of -- as the folks at Third Way are calling it -- foreclosure-gate. The Massachusetts Supreme Court ruling in the Ibanez case, along with a growing body of cases where the banks a...

The Fed Has Spoken: No Bailout for Main Street

Posted on Saturday, January 15, 2011

The Federal Reserve was set up by bankers for bankers, and it has served them well. Out of the blue, it came up with $12.3 trillion in nearly interest-free credit to bail the banks out of a credit crunch they created. That same credit crisis has plunged state and local governments into insolvency, b...

Lawmaker Labels BofA-GSE Repurchase Settlement a "Backdoor Bailout"

Posted on Monday, January 10, 2011

The widely publicized agreement reached between Bank of America and the nation’s two largest mortgage companies to resolve claims that BofA’s Countrywide soldthem poorly underwritten loans was well received by the markets. But at least one lawmaker, Rep. Maxine Waters (D-California), is raising a re...

A.I.G.’s Latest Step to Get Off Government Support

Posted on Tuesday, January 04, 2011

American International Group said on Monday that it had signed $4.3 billion worth of credit deals with 36 lenders — in yet another step by the insurer to get off government life support. In a filing with the Securities and Exchange Commission, A.I.G. disclosed that it had entered into a $1.5 bil...

Stimulus funds on the slow track

Posted on Tuesday, January 04, 2011

When Democratic senators and representatives voted to approve the $787 billion stimulus package nearly two years ago, the ones who came from swing states and districts knew they were taking a political risk. What they didn't know was that the economic benefits of the stimulus would become so entan...

Is TARP Working or Not?

Posted on Tuesday, January 04, 2011

WASHINGTON, DC-New figures released by the Treasury Department and analyzed by such media outlets as the Washington Post and the Wall Street Journal suggest that TARP -the widely-criticized government bailout of the US financial system in 2008-is not working as well as intended. Nineteen financial i...

Obama administration steps up monitoring of banks that miss TARP payments

Posted on Tuesday, January 04, 2011

The Obama administration has begun monitoring the high-level board meetings of nearly 20 banks that received emergency taxpayer assistance but repeatedly failed to pay the required dividends, according to Treasury Department officials and documents. And it may soon install new directors on some of...

Inside AIG's Tortuous Turnaround

Posted on Wednesday, December 22, 2010

NEW YORK/WASHINGTON (By Paritosh Bansal, Kristina Cooke and David Lawder) - During a rainstorm in Washington in early 2009, amid the furor over Wall Street's post-bailout bonuses, an American International Group employee pulled out an umbrella that had the insurer's name on it. "Somebody came by...

Bailout Makes Government Biggest, Not Best, Distressed-Debt Investor Ever

Posted on Friday, December 17, 2010

As the U.S. government poured billions of dollars into companies during the financial crisis, it earned an unusual honor: biggest distressed-debt investor in history, the Wall Street Journalnotes. With about $388 billion invested in troubled companies over the last two years, the government becam...

Treasury Reaches Deal To Sell Citigroup Stock At A $12 Billion Profit

Posted on Wednesday, December 08, 2010

WASHINGTON — The government said late Monday it had reached a deal to sell its remaining holdings of Citigroup common stock and will end up turning a profit of $12 billion on its bailout of the giant bank. The Treasury Department said that a final offering of about 2.4 billion shares of Citigroup I...

Bank of America Promises to Meet Bailout Requirement, But Challenges Remain

Posted on Wednesday, December 08, 2010

Bank of America, mired in scandal and facing potential losses over its alleged mishandling of mortgages, now says it will be able to fully leave its taxpayer bailout behind. Whether the nation will soon escape its own bad experiences with Bank of America -- not least, a spate of allegedly unfair an...

Fed aid in financial crisis went beyond U.S. banks to industry, foreign firms

Posted on Friday, December 03, 2010

The financial crisis stretched even farther across the economy than many had realized, as new disclosures show the Federal Reserve rushed trillions of dollars in emergency aid not just to Wall Street but also to motorcycle makers, telecom firms and foreign-owned banks in 2008 and 2009. The Fed's e...

Too Big to Succeed

Posted on Friday, December 03, 2010

THE world has experienced a severe financial crisis and economic recession. The Treasury and the Federal Reserve took actions that saved businesses and jobs and may very well have saved the economy itself from ruin. Still, the public seems ungrateful, expressing anger at these institutions that save...

Obama Administration Will Spend Just $12 Billion Of The $50 Billion Promised To Help Homeowners Avoi

Posted on Wednesday, December 01, 2010

The Obama administration will spend less than a quarter of the $50 billion it promised to help homeowners facing foreclosure, the nonpartisan Congressional Budget Office said in a report Monday. The CBO projection raises fresh questions about the success of the administration's foreclosure-preven...

Silver Lining in F.D.I.C. Deal

Posted on Friday, November 05, 2010

At first blush, the anticipated initial public offering of BankUnited looks like a deal that could leave Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation, red in the face. After all, she sold the bank, with $13 billion of assets, to a group of private equity heavy-hitter...

Potential AIG Bailout Loss Was Concealed By Treasury, Federal Auditor Says

Posted on Friday, October 29, 2010

The U.S. Treasury concealed $40 billion in likely taxpayer losses on the bailout of American International Group (AIG.N), the New York Times said, citing a report by Neil Barofsky, the special inspector general for the Troubled Asset Relief Program. "In our view, this is a significant failure in th...

FDIC Recovery in Bank United deal

Posted on Wednesday, October 27, 2010

BUSINESS DAY Reuters BreakingViews: Silver Lining in F.D.I.C. Deal By ROB COX and WEI GU At first blush, the anticipated initial public offering of BankUnited looks like a deal that could leave Sheila C. Bair, the chairwoman of the Federal Deposit Insurance Corporation, red in the face. Aft...

Learning the lessons of AIG’s fall

Posted on Wednesday, October 27, 2010

By Paul J Davies, Insurance Correspondent Published: October 26 2010 22:27 | Last updated: October 26 2010 22:27 Financial Times AIG was the world’s biggest insurer before the financial crisis but became the world’s biggest bail-out, casting a long shadow over the sector. The bitter irony for t...

Congressional Panel Sees Conflicts of Interest from TARP Contractors

Posted on Monday, October 18, 2010

The Congressional Oversight Panel, charged with keeping a watch over Troubled Asset Relief Program (TARP) funds, says “significant concerns” persist about accountability and potential conflicts of interest because of the Treasury’s “extensive use” of private contractors to carry out functions relate...

State Level Solutions Funded By Feds

Posted on Tuesday, May 04, 2010

FLORIDA: Florida Housing Finance Corporation (Florida Housing) is slated to receive $418 million, pending the approval of its proposal. In its proposal, which is currently being reviewed by the Treasury Department, Florida Housing outlined two strategies that will help homeowners either stay in th...

HAFA

Posted on Wednesday, March 10, 2010

2.5 million people were foreclosed last year. Even more are expected to be foreclosed this year – 3 million. The pattern is expected to continue in 2011. These numbers do not include another 7 million loans currently delinquent but not yet in foreclosure, 28 million expected to be underwate...

HARP Receives a One-Year Extension

Posted on Monday, March 08, 2010

The federal government's Home Affordable Refinance Program, aimed at borrowers with little or no equity in their homes, will now expire in June of 2011. ...

Move-Up Tax Credit Having Little Impact

Posted on Monday, March 08, 2010

Industry experts are criticizing the $6,500 move-up tax credit for having little influence on sales as January to February numbers remain stagnant. ...

Obama Announces Another $1.5 Billion...Where are the details???

Posted on Tuesday, February 23, 2010

The administration announced a new initiative Friday to help the nation’s hardest hit housing markets. President Obama has allocated $1.5 billion in aid for states where unemployment is high and home prices have fallen more than 20 percent in the aftermath of the housing bubble. Great concept now ...

TARP and the President's Budget

Posted on Tuesday, February 02, 2010

The president’s budget plans would impose a levy on all financial institutions with more than $50 billion in assets. The administration has calculated that fees taken from these banks would yield $9 billion a year over the next 10 years, and up to $117 billion within 12 years if necessary to ensure ...

Extended Home Buyer Tax Credit

Posted on Monday, January 18, 2010

Extended Home Buyer Tax Credit First credit motivated 2 million buyers from February to November 2009 (some would have bought anyway). Extended credit expected to motivate another 2.4 million. Effective November 7, 2009. First time buyer credit = $8000 Existing buyer credit - $6500 (new) Requi...

The FDIC Between a Rock and a Hard Place

Posted on Tuesday, January 05, 2010

As of today the FDIC has over a negative $8.2 billion balance sheet. Over 140 banks have been taken over, leaving the agency with around $30 billion is real estate debt it would like to sell, double the amount last year. Many banks, particularly smaller ones have still not written down their lo...

How Bailout Attempts Back Fire

Posted on Tuesday, January 05, 2010

Some of the ways our housing has been artificially held up are starting to haunt us... Interest rates have been kept too low for too long FNMA and Freddie have been bailed out one too many times. FHA has been making low downpayment loan for too long. Government has been handing out freeb...

Some Thoughts on the 1 Year Anniversary of TARP

Posted on Sunday, October 11, 2009

Thoughts about the one year anniversary of TARP What does it tell us when even the TARP Congressional Oversight Panel can’t say whether TARP’s working or not? With some of the programs winding down now, the need for mortgage loan modifications and perhaps also small business lending still seems o...

Help for Tenants

Posted on Sunday, October 11, 2009

May 20, 2009 President Obama singed the Helping Families Save their Homes Act of 2009 which included some tenant protections. The Act requires 90 day notice before a lender can evict a tenant from a foreclosed property and that leases be honored until the end of their term. This applies to all fo...

More Support for Free Markets

Posted on Tuesday, September 01, 2009

Government intervention has officially become a bigger problem than letting free markets fails before they can recover. Far more investors, banks and even folks on main street are frozen in their tracks waiting to see what Washington will do next or because they know the rules can be changed any mi...

Why Plans Arent Working: Modifications

Posted on Monday, August 17, 2009

Here are the reasons cited on CNN Money that the plans is not working: Fax machines. Most loan servicers require that applications be faxed. "It's archaic. Given all the problems we've had with lost faxes, it seems unreasonable to use a fax system,” says Michael van Zalingen, director of homeown...

An Idea On Negative Equity From Harvard

Posted on Monday, August 17, 2009

For any home owner with a loan-to-value ratio greater than 120 percent, Martin Harvard Prof Feldstein would offer a reduction in principal, the cost of which would be shared between the government and the lender down to the 120 percent level. In exchange, the borrower would accept a recourse loan th...

Send The Right Message to Good Folks Underwater

Posted on Thursday, July 02, 2009

Here in Florida, a place synonymous with bad real estate and mortgage decision-making that has consequently seen steep declines in home value, I've been noticing yet another troubling trend. Owners of homes worth less than their mortgage loan balance--those so called "underwater," "negative equity"...

TARP Money

Posted on Friday, June 05, 2009

The Feds are being stricter with the big banks than the small ones, requiring them to try raising money themselves before giving back funds they’d borrowed from Uncle Sam even if they passed the “stress test.” B of A supposedly raised $33 billion....

Making Homes Affordable - Notes on Latest Additions

Posted on Friday, May 15, 2009

$75 Billion Making Homes Affordable • Refinances and Modifications • 8 weeks now • Helped 50K people so far • “Holes” in plan Borrowers who can’t afford 31% criteria, HAVE to get rid of property. Increasingly more borrowers unemployed – can’t quality Properties in markets where values k...

Helping Families Save Their Homes

Posted on Monday, April 27, 2009

3/7 House passed Helping Families Save Their Homes Act of 2009 • PSA: Protecting servicers from lawsuits, not have to buy back because of mod. ...

TRAP Waste, Fraud and Oversight

Posted on Tuesday, April 21, 2009

That fraud, accountability and transparancy have emerged as problems with TRAP should not come as a suprise...the issues are almost hand in hand with government programs. But the issue is much bigger when we're talking about a possible $3 trilion price tag not $700 billion now. A recent report f...

More on the Newest Md and Refi Plans (March 2009)

Posted on Saturday, March 07, 2009

Making Homes Affordable • We’re all sinking. This new strategy acknowledges we’re in different boats and offers solutions to fit specific circumstances • Uses FannieMae and FreddieMac which already own or guarantee $5.2 trillion of $12 trillion total home loans in U.S. more than 30 million of...

$75 Billion Strategy (March 2009)

Posted on Friday, March 06, 2009

It seems the administration is beginning to get the ball rolling in the right direction with the latest $75 billion plan. Finally a strategy acknowledging that, although we may have that same sinking feeling, the boats we're all in can be different. To extend the medical metaphors we keep seeing, j...

Freddie Mac

Posted on Friday, March 06, 2009

Freddie is launching a new plan to keep tenants and former owners of foreclosed properties in the homes on mon to month leases. The agency is extending its eviction moratorium until April 1st. The plan is called the REO Rental Initiative. ...

Bankruptcy "Cram Downs"

Posted on Friday, March 06, 2009

House Democrats have agreed to limitations on the pending bankruptcy empowerments to homeowners who sought modification before filing bankruptcy and people who can't afford to pay their mortgage. Judges will be required to consider whether the bank offered a reasonable restructuring before they can ...

75 Billion Home Rescue (March 2009)

Posted on

It seems the administration is beginning to get the ball rolling in the right direction with the latest $75 billion plan. Finally a strategy acknowledging that, although we may have that same sinking feeling, the boats we're all in can be different. To extend the medical metaphors we keep seeing, j...

The Affordable Home Modification and Refinance - a Status Update

Posted on

We all knew it would take some time for lenders and servicers to (a) decide whether or not they wanted to and could participate in these programs and(b) gear up to do so. Either we're still in the midst of that gear up time or the programs first announced March 4th - about six weeks ago - dont work...

State Level Solutions Funded By Feds

Posted on Tuesday, May 04, 2010

Happily we’re seeing more and more efforts to help folks from the state level where problems can be clearly identified and solutions crafted more appropriately for the local issues. The White House, allocated $1.5 billion for Arizona, California, Florida, Michigan, and Nevada state housing financ...

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