tarp Tag

03 Jan Why You Should Not Expect Your Bank to Voluntarily Rewrite Your Loan

no mortgage modificationEconomists of every political stripe agree that our recent recession and lackluster recovery arose from a collapse of real estate markets in cities all over the country. Homeowners are either stuck in properties worth less than what is owed on them, while other homeowners have just walked away. The result is a landscape where real estate has lost its liquidity and banks are afraid to rely on real estate to extend needed loans, thereby freeing up the capital markets. A few years ago, a several members of Congress floated the idea of empowering bankruptcy judges to “cram down” mortgages to equal the fair market value of the underlying real estate. Currently bankruptcy judges can, with some restrictions, cram down auto loans and other secured debt to fair market value in Chapter 13. From my perspective as a bankruptcy lawyer, this cram down power does a lot of good. Debtors can now afford to keep their vehicles, and thus their means to and from work. The used vehicle and used furniture market is not depressed with excessive inventory of returned property and more people are able to reorganize rather than liquidate.
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07 Dec Creative Accounting On Government’s Gain On TARP Funds

The US Treasury Department announced today that it recovered $200 Billion of the $700 Billion bailout for financial institutions. Despite popular belief, the Bailout was not a free handout. The money came with strings and the banks want out from under the TARP.

A number of banks have already paid TARP money back. One of the largest recipients, Bank of America, has announced efforts to raise private money to pay back the government funds.

So the news outlets are touting that taxpayers will have to foot less of the bill than originally planned. However, the news media has it all backward.

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07 Aug TARP and HAMP Require That Foreclosure Be Suspended

A mortgage lender which received TARP funds, or which voluntarily signed up for President Obama's HAMP program, must suspend a foreclosure action while a borrower's mortgage modification application is pending. That's good news. HAMP is the modification program of the Home Affordable Plan. (HARP is the...

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