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TARP

February 25, 2015

A few choice words on why the acquisition of OneWest Bank by CIT Group deserve more attention.

June 1, 2010

The benefit of the liquidity nurtured by TARP is going to help people refinance their mortgages, and not to getting borrowers into new homes.

Data from the Federal Housing Finance Administration shows that only 1 in 8 loans made in the first quarter of 2010 went for a home purchase. More than 87 percent of loans made in the quarter were for refinances. With the exception of the first quarter of 2009, when less than 8 percent of loans went for home purchase, this is an inequality unseen in the last thirty years.

Home Purchase Loan Share in the Mortgage Market (Source: FHFA)

There is more than one type of refinance borrower. Some may include borrowers that are trying to get out of a loan with a resetting interest rate. Others may be trying to pull cash out of their home in order to finance a new purchase. Another group is probably made up of people who are current on fixed rate mortgages with affordable interest rates, but that want to take advantage of the historically low interest rates available to borrowers right now.

Fine. However, other data suggests that the people getting refinance loans are not drawn equally from all across our communities. More often than not, the chance of getting approved for a refinance loan is distinctly easier in some neighborhoods, than in others.

In a study (Paying More for the American Dream, IV) that analyzed mortgage data across seven different cities from 2006 to 2008, borrowers in minority neighborhoods were much more likely to be denied a new prime rate refinance. That inequality widened over time, too. During that period, approval rates dropped twice as fast in minority neighborhoods as they did elsewhere.

March 20, 2009

People say that Treasury and the Federal Reserve have their hands tied with how the banks use their TARP funds.  They say that it is up to the private market to allocate the capital.  And, even the leaders at these regulatory institutions appear to be frustrated ("slamming the phone") and short of alt

March 20, 2009

Fifth Third Bank, a recipient of TARP funds, has been giving away money through scratch-off cards.  The contest, is open to anyone in the bank's footprint.  It was announced in September and ran through Nov.

January 14, 2009

Dr. Robert Shiller discusses the continuous workout mortgage.

It would probably bear a higher interest rate, if consumers were assumed to have a lower risk.  Then again, it might have an overall effect of dampening interest rates if it creates a means of mitigating foreclosures.

Dr. Joseph Stiglitz answers questions from chair  Elizabeth Warren about why TARP is failing.

December 23, 2008

Fifth Third is going to put a vote before its shareholders to accept TARP funding.  The meeting is scheduled on Dec. 29th.  Fifth Third will receive $3.46 billion in funding through the US Treasury's Capital Purchase Program.