The Treasury Department’s $700b Troubled Asset Relief (TARP) program was originally conceived as a plan to buy illiquid securities from financial firms to unclog their books and spur new business and consumer lending. Once TARP was approved, it was deemed more effective (from crisis mitigation and taxpayer protection standpoints) to use inject TARP funds directly
Treasury Secretary
When homeowners are approved for a loan, it’s always been the target to get total housing plus other debt obligations to equal 38% or less of income—this is considered the ideal affordability range for any borrower. The problem is that with guidelines of recent years, the income component of the debt-to-income ratio calculation was “stated”
As reported last week, the FDIC was rumored to be working toward helping banks solve the growing problem of foreclosures by enabling banks to forgive principal on loans for homes where values have dropped. About 12 million homes are underwater—that is, the mortgages on about 12 million homes are more than the values of these
Below is a summary from CNBC of the banks who have signed up for the Treasury’s $250b in re-capitalization plan that’s part of their Troubled Asset Relief Program. This is beyond the initial nine banks who got $125b to kick start the re-capitalization plan. The $700b TARP program was first designed to handpick illiquid MBS
Following its worst week in 75 years, the US stock market posted some of the best gains in 75 years today, a trading day where bond markets were closed and the Treasury department announced that a deal to invest directly in banks is imminent. Per the terms of the TARP plan approved by Congress and
Two days after NYU Economics Professor Nouriel Roubini said markets are on the verge of meltdown, the IMF parroted the sentiment in their weekend meetings in Washington, DC—after four years of ignoring him. From the looks of this Reuters story, there was quite a few photo ops and generalized quotes from President Bush like: “I’m
Treasury Secretary Henry Paulson, now that he’s got his initial $250b approved and $450b more if needed (which it will be), has said that it’s not going to quick enough to handpick illiquid securities to buy from banks to help them recapitalize—as the Troubled Asset Relief Program (TARP) plan initially called for. With global markets
Last week after the bailout bill was passed, Treasury began hiring money managers to help handpick illiquid securities to buy out of bank’s portfolios. This week, Treasury may instead use the money to inject directly into banks: Treasury officials say the just-passed $700 billion bailout bill gives them the authority to inject cash directly into
Law firm Sidley Austin has published one of the best summaries of the bailout package we’ve seen so far. Their Financial Institutions Regulatory Practice produced this report, which is broken out into the following sections. Click here for the full PDF report: Section I: Covered Assets & Institutions Section II: Asset Acquisition Section III: Equity
President Bush signed the bailout bill shortly after it was passed by the House today (it passed the Senate yesterday). Below is Treasury Secretary Henry Paulson’s statement today on the bailout bill. Feels Palin-like in its generalized tone, but that’s because he’s already doing the real work behind the scenes. Under the bill, Treasury has
Markets are even in the hour following the House’s 263-171 approval of the Treasury’s $700b financial sector bailout package, and it passed the Senate yesterday. Now it goes to the White House and President Bush has already said that he would sign it into law. It’s widely expected that Treasury can start purchasing illiquid assets
The political posturing continues regarding the bailout bill. Now the Senate may vote on the bailout package Wednesday to keep things moving forward following a House defeat of the proposal Monday. According to the AP: In a surprise move to resurrect President Bush’s $700 billion Wall Street rescue plan, Senate leaders slated a vote on
Forget all the news about the bailout, and about Citi/Wachovia! More importantly, Heather Locklear was arrested! Rumors of thousands of men lined up to post bail are probably exaggerated. Obviously this mortgage crisis is proving too much for her. Decent listing of current links Are you preparing for a presentation, or being asked by clients
The White House and leaders from the House and Senate have agreed to basic terms of Treasury’s proposed $700b financial sector bailout plan—the bill’s working title is The Emergency Economic Stabilization Act of 2008. The House will review the plan tomorrow (Monday) with the goal of voting on it and getting it to the Senate
Back in June, Portfolio.com released tournament brackets where users can vote on who killed the economy. Even though blame can’t rest with a single person or entity, this is a fun tool that’s still on their most-read list. Interestingly, former senator and current UBS investment banking executive Phil Gramm was not even on the list.
Last night, as I was taunting my dog with a hunk of cheddar cheese waved above her nose, the look in her eye reminded me that there is talk among loan agents of a mythical refi boom. Not your parent’s refi boom, or the 48 minute refi boom in January, but a real one. Of
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