twitter linkedin
facebook google+
Search:

Mortgage News

News by Subject
Complete list of specialty news sections.

Purchase Subscription
Subscribe to MortgageDaily.com and get immediate access to all news, statistics and archives.

Mortgage Advertising
Reach mortgage executives, loan originators and other people tied to mortgage industry.

Consumer Mortgage News
Free mortgage news for prospective borrowers.

Mortgage Newsletter
Free e-mail newsletter with the latest headlines from MortgageDaily.com.

Mortgage News Reprints
Put entire MortgageDaily.com stories in your online or printed newsletter or publication.

Mortgage Feedget RSS code
Condensed MortgageDaily.com stories free on your Web site or for your RSS reader.

News Archives
Archive of MortgageDaily.com stories by month going back to 1999.

Press Releases
Reports and announcements from MortgageDaily.com.

Mortgage Statistics
Data and statistics for real estate finance.

Mortgage Directories
Directories of lenders, branch operators and mortgage service providers.

Mortgage Graphs
Directories of lenders, branch operators and mortgage service providers.

home subscribe advertise reprints e-mail help RSS about us LOG IN

Mortgage News

 

Mortgage News

HOT Topics

production

servicing

compliance

legal

fraud

secondary

jobs

appraisal

site map

www.loan-academy.com/

Secondary Marketing News | Correspondent Lender Directory
Mortgage portfolio trades and forward commitments. Correspondent lending, r e p u r c h a s e s and warehouse news. Secondary marketing statistics and lawsuits.



Troubled Mortgage Asset Purchases Curtailed

TARP purchases of distressed assets put on hold

November 12, 2008

By MortgageDaily.com staff


The U.S. Treasury secretary said today that the Troubled Asset Relief Program will not be used to purchase troubled mortgage assets. He said the $700 billion fund would be better utilized for capital investment.

H.R.1424, the Emergency Economic Stabilization Act of 2008, which became law on Oct. 3, created TARP to purchase $700 billion in illiquid mortgage assets. The plan offered hope to a distressed mortgage market.

But today, Treasury Secretary Henry M. Paulson Jr. said the plan has changed.

During the two weeks when Congress legislated the financial rescue package, market conditions deteriorated significantly. Paulson said the initial plan to purchase troubled assets would take too much time to implement given the severity of the problem.

So in early October, he signaled his decision to use the financial rescue package to purchase equity directly from financial institutions. He explained that this was the fastest and most productive way to stabilize the financial system.

The revised strategy was implemented with the purchase of $125 billion in preferred stock of nine of the largest U.S. financial institutions. A total of $250 billion was targeted for similar investments.

He noted that by strengthening banks' capital bases, they would be more inclined to increase lending (though participating banks have recently shown more of an inclination to acquire other banks than to increase lending.) Improving banks' capital bases will also enable them to better manage illiquid assets.

Paulson said the investments, along with other moves, prevented a broad systemic event.

"Our system is stronger and more stable than just a few weeks ago," the secretary stated.

photo of Henry Paulson
Treasury photo of Henry M. Paulson

He said that actions taken in October by the Federal Deposit Insurance Corporation, the Federal Reserve and the Treasury -- as well as their international counterparts -- helped avert a global catastrophe, according to a Treasury statement.

"Credit markets were largely frozen, denying financial institutions, businesses and consumers access to vital funding and credit. U.S. and European financial institutions were under extreme pressure, and investor confidence in our system was dangerously low," he stated.

But the financial system is still fragile and financial institutions are still holding significant illiquid assets on their balance sheets.

Priorities for deploying the remaining TARP funds include providing further stabilization for the financial system, providing support for the securitization market and reducing the risk of foreclosure.

"Over these past weeks we have continued to examine the relative benefits of purchasing illiquid mortgage-related assets," Paulson said. "Our assessment at this time is that this is not the most effective way to use TARP funds."

But a plan is under consideration to use TARP funds to encourage private investors to return to the troubled securitization market. One possibility would be to provide federal financing for mortgage securities.


Related:
TARP Gives Hope to Mortgage Sector
Combined with a recent improvement in subprime performance, the $700 billion plan for the U.S. Treasury Department to buy up mortgage assets has the potential to significantly help the mortgage business.

Mortgage Backed Securities | MBS News | MBS Statistics
News about commercial and residential mortgage-backed securities. Stories about ratings actions and changes to servicer ratings. Studies and reports about the performance of securitizations and problem vintages and classes. Subprime, Alt-A, home equity and j u m b o analysis.


Corporate Mortgage News
M e r g e r s, a c q u i s i t i o n s and private and public offerings. Other corporate activity including executive appointments, bankruptcies name changes.


Logout forgot
password?

SUBSCRIBERS: Edit Subscription | Subscription Help | or call 214.521.1300

Subscribe Contact Us Site Map

Copyright © 2017 Mortgage Daily, D a l l a s
Subsribers Only:

AMC directory

ARM indexes

mortgage company directory

mortgage regulations

net branch directory

p r i c i n g engine directory

wholesale lender directory

More Mortgage News Resources (full site map):

advertising news

appraisal news

bank news

biggest lenders

commercial mortgage news

corporate mortgage news

credit news

FHA news

financial regulation news

foreclosure news

GSE news

jumbo mortgage news

interest rates

loan modification news

loan originator survey

LOS Newsletter

MBS

mortgage associations

mortgage-backed securities

mortgage books

mortgage brokers

mortgage compliance

mortgage conferences

mortgage directories

mortgage education

mortgage employment

mortgage employment index

mortgage executives

mortgage fraud

mortgage fraud blog

mortgage fraud local news

Mortgage Fraud Index

Mortgage Graveyard

mortgage insurance news

mortgage lawsuits

mortgage leads

mortgage lender ranking

mortgage licenses

mortgage litigation

Mortgage Litigation Index

Mortgage Market Index

mortgage mergers

mortgage news

mortgage politics

mortgage press releases

mortgage production

mortgage public relations

mortgage rates

mortgage servicing

mortgage statistics

mortgage technology

mortgage video

mortgage Webinars

net branch

net branch directory

nonprime news

origination news

originator tools

real estate news

refinance news

reverse mortgage news

secondary marketing

social media

servicing news

subprime news

wholesale lenders