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Tag Archive: TARP

HAMP helps few homeowners, but program continues

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The current tumult in the nation’s economy—high unemployment, large federal deficits, a downgrade in the U.S. credit rating and the resultant gyrations of stock prices—stem from the collapse of the housing bubble in 2007 and 2008 and subsequent meltdown of financial markets. While government programs enacted as part of the Emergency Economic Stabilization Act of 2008 propped up banks, brokerages and other firms—including auto manufacturers General Motors and Chrysler—the principal program to help homeowners has not fared nearly as well. HAMP logo In 2009, the Department of Treasury launched the Home Affordable Modification Program, or HAMP, to help ease the financial woes of three to four million Americans by adjusting mortgage rates to make their homes more affordable. The program provides an incentive to banks, giving them a predetermined amount for every modification completed. One of the goals of HAMP is to keep homes from being foreclosed upon, protecting local real estate markets from the declining prices that vacant, unsold homes can have on entire neighborhoods.

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Nation’s biggest banks benefit most from Fed program

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TALF Data recently disclosed by the Federal Reserve shows that one of its emergency lending programs, the Term Asset-Backed loan Facility or TALF, led to the purchasing of assets from 56 organizations--among them seven were also aided by the biggest bailout program, the Troubled Asset Relief Program, or TARP. Those seven financial firms benefited from $25 billion--or 35 percent--of the $71 billion in loans issued through through TALF. More than two years after the financial crisis was touched off by the collapse of Lehman Brothers, when Congress, the Bush administration and independent agencies like the Federal Reserve took unprecedented actions to prop up bankers, brokers and other financial firms, the public is only now beginning to see detailed information on actions the government took that were considered secret before. While the Federal Reserve has released transaction level detail for TALF purchases, something that was ordered by Congress, it has withheld much of the underlying data for other emergency programs; Bloomberg.com reported that the Fed did not release information on the underlying securities purchased through the Term Securities Lending Facility program (TSLF) or the Term Auction Facility (TAF).

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Ethics broadens Waters probe to examine communications with key committee

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The House Ethics Committee is said to have broadened its inquiry into Rep. Maxine Waters by examining whether the Financial Services Committee fully complied with requests to turn over documents. Waters was scheduled to go on trial last month for inappropriately using her position in Congress to aid a bank that her husband had an ownership stake in in receiving money from the government bank bailout fund. That trial was delayed due to the revelation of a new e-mail that could be used as corroborating evidence. The revelation of that e-mail has led to broader questions of whether there is other evidence being withheld. The Washington Post reports:

Four officials, congressional staff members, and others familiar with the probe confirmed on Thursday that her trial was postponed two weeks ago in part to explore the delay in not turning over that e-mail and to examine whether other evidence was withheld.

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Federal Reserve Loan Program Allowed Bank of America to Benefit Twice

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Bank of America was one of several banks that was able to play both sides of a Federal Reserve program launched during the 2008 financial crisis. While Bank of America was selling its assets to firms obtaining loans through the Fed program, the investment firm BlackRock—partially owned by Bank of America—was potentially turning a profit by using those loans to buy assets similar to those sold by Bank of America. In November 2008, the Federal Reserve announced that, in addition to a series of lending programs intended to keep both the U.S. and world economies liquid, it would begin issuing federally backed loans to entities willing to purchase securities from the troubled financial industry through a program called the Term Asset-Backed Securities Loan Facility or TALF.

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Sen. Lincoln’s proposed reform moves to the Senate floor for debate

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The financial reform legislation regarding derivatives voted 13-8 out of the Senate Agriculture Committee this morning and on to the Senate floor. It’s intended to fend off any future government bailouts and prohibit the risky behavior banks participate in that caused the 2008 financial meltdown. But of course, the very organizations that these new laws will affect are using their money and expertise to influence the lawmakers in charge of making reform happen.

The proposed bill, introduced by Sen. Blanche Lincoln, D-Ark., is planned to be folded into the bill Sen. Chris Dodd, D-Conn., proposed this week on financial ...

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