TARP
2008 Troubled Asset Relief Program, the main Wall Street bailout vehicle, continued to be a political football in 2009. In March, the Treasury said its remaining $300 billion kitty would be used to buy up toxic assets and clean up balance sheets. It was the kind of vague compromise that pleases no one.
TALF
Designed to loosen consumer credit, the Fed's Term Asset-Backed Securities Loan Facility doesn't need Congress to approve spending of its $1 trillion budget. It lends cash to banks with mortgage-backed and other securities as collateral. And with a March expiration, expect a flurry TALF deals in coming months.
PPIP
The Treasury also gave us the Public-Private Investment Program for legacy assets in March, Under it, private investors team with the government to buy up toxic assets for a song - if sellers go along. The has stalled and shrunk, but once it gets rolling, TARP and TALF money will keep it liquid. We hope.
HAFA
The Home Affordable Foreclosure Alternatives program does not take effect until April 5th, 2010. The program offers borrowers foreclosure alternatives. It provides guidance to servicers and includes general terms and conditions, evaluation process, documentation, and reporting requirements. As part of the Home Affordable Modification Program (HAMP), HAFA provides financial incentives to servicers and borrowers who utilize a short sale or a deed-in-lieu (DIL) to avoid foreclosure on a HAMP-eligible loan.
HAMP/HARP
You can't stop the Home Affordable Modification and Refinancing programs; you can only hope to contain'em. One entices servicers to reduce homeowners' loan payments; the other aids borrowers with little to no equity. A bold move by the Obama administration...but some wonder how many foreclosures it merely delayed.
CFPA
Under "drastic government measures," see the Consumer Financial Protection Agency. Congressman Barney Frank's brainchild, the proposed council would safeguard the economy's overall stability and protect consumers' credit rights. Now, if only you could get Congress - and the Fed - to go along with the plan.
