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Republican Plan To End The Bailout Of Fannie Mae and Freddie Mac View the plan here |
12-9-09, End The TARP Program |
TARP Is Not Making A Profit For Taxpayers. To date, the Treasury Department has received around $13 billion from interest and dividend payments, the sale value of stock and the sale of stock warrants for the government's financial interventions using the TARP program, and Treasury projecting that number to increase to at least $19 billion. But that hardly makes up for the $159 billion that the CBO projects that TARP will cost taxpayers. The Treasury Department has already acknowledged losing $60 billion alone on the government's interventions in Chrysler, GM and AIG.
TARP Should End Immediately And All TARP Payments Should Go Toward Reducing The Deficit. President Obama has extended the TARP program to October 3, 2010, and both he and House Democrats are proposing to tap TARP funds to pay for programs unrelated to the financial emergency that our economy faced in 2008. In fact, Chairman Frank's "Managers Amendment" to H.R. 4173 would divert $4 billion from TARP a number of foreclosure mitigation and neighborhood stabilization programs.
Taxpayers Should Not Be Asked To Sink More Money Into The Democrats' Failed Housing Agenda. Congress, the Administration, and the private sector have already put in place a number of programs intended to help struggling families stay in their homes. These programs have not achieved the goals they were intended to accomplish, and pumping more taxpayer money into them will not make them any more effective. Existing foreclosure mitigation and neighborhood stabilization programs include: Congressionally Authorized Programs
Neighborhood Stabilization Program
Description: Provides funds to states, localities and non-profits to purchase foreclosed and abandoned home and provide technical assistance.
Cost: $5.85 billion: $3.92 billion [authorized by H.R. 3221]; $1.93 billion [authorized by H.R. 1].
Stimulus Homelessness Prevention Programs
Description: $1.5 billion to states through CDBG program to provide renter assistance, reducing homelessness and avoiding entry into shelters. Cost: $1.5 billion [authorized by H.R. 1]
National Foreclosure Mitigation Counseling Program
Description: Provides Neighbor Works funds to distribute to eligible groups to carry out foreclosure prevention counseling.
Cost: $410 million: 2008 Consolidated Appropriations Act: $180 million; H.R. 3221: $180 million; 2009 Omnibus: $50 million.
Hope for Homeowners
Description: Provides distressed homeowners with new FHA-backed mortgages with principal write downs.
Cost: H.R. 3221 authorized up to $300 billion in H4H mortgage principal to be insured by FHA.
Administration Programs
Making Home Affordable
Description: Reduces mortgage payments through re-financings and loan modifications; provides foreclosure alternatives.
Cost: $75 billion: $50 billion from TARP; $25 billion will come from GSEs
FHASecure
Description: Allowed eligible borrowers to re-finance non-FHA ARMs into fixed rate FHA loans. Expired 12/31/08.
Cost: None: Borrowers paid FHA premiums for FHASecure.
Federal Reserve Programs
Home Ownership Preservation Policy
Description: Provides guidelines to prevent foreclosures on residential mortgages that the Federal Reserve Banks hold, own, or control subject to Section 110 of the Emergency Economic Stabilization Act of 2008 (EESA).
FDIC
IndyMac Loan Modifications
Description: FDIC provided loan modifications to borrowers with loans from failed Indy Mac Bank.
Impact: FDIC implemented about 13,000 loan modifications while it was the conservator of Indy Mac according remarks made by Chairman Bair.
GSEs
Streamlined Modification Program
Description: Loan modifications including interest rate reductions, term extensions and write downs for GSE held loans and loans of certain servicers. Program retired and replaced by Making Home Affordable.
Fannie Mae HomeSaver Advance
Description: Allows delinquent borrowers able to make current mortgage payments to receive loans in order to repay the late payments and bring accounts current.
Private Sector Programs
Hope Now Alliance
Description: Consortium of mortgage market participants provides foreclosure prevention services to borrowers including a hotline, workshops and counseling.
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