NEW YORK (CNNMoney.com) - Only about 4% of troubled borrowers have received long-term help under the Obama administration's foreclosure prevention program, Treasury officials said Thursday.
A nearly equal number of trial modifications have been denied permanent assistance, the report showed. The reasons include not making monthly payments on time, not submitting all the necessary paperwork and not qualifying for reasons such as insufficient income.
The report, the first comprehensive tally of permanent modifications made, shows that loan servicers have converted 31,382 people from trial adjustments to long-term assistance as of Nov. 30.
But 30,650 people in trial modifications have been denied, according to Treasury officials.
New York (CNNMoney.com) - The Obama administration is expected to slash the estimated cost of the Troubled Asset Relief Program by $200 billion, which could help trim the nation's bloated deficit.
The latest projection, which will be officially unveiled by the White House in the coming days, would cut the long-term cost of TARP to $141 billion, according to a Treasury Department official.
As recently as August, the administration had projected that the long-term costs of running TARP would reach $341 billion.
But that outlook has improved as banks have raced to repay taxpayer funds to the government in recent months. To date, banks have returned some $71 billion to taxpayers, according to the Treasury Department.
WASHINGTON (CNN) – The banking system today may be in a more precarious position than it was a year ago, the man charged with overseeing a $700 billion bailout program said Wednesday.
Neil Barofsky, the special inspector general managing the Troubled Asset Relief Program, told CNN's Wolf Blitzer on Wednesday that the government's decision to support bank mergers over the past year may have put the U.S. economy more at risk.
"These banks that were too big to fail are now bigger," Barofsky said. "Government has sponsored and supported several mergers that made them larger and that guarantee, that implicit guarantee of moral hazard, the idea that the government is not going to let these banks fail, which was implicit a year ago, is now explicit, we've said it. So if anything, not only have there not been any meaningful regulatory reform to make it less likely, in a lot of ways, the government has made such problems more likely.
"Potentially we could be in more danger now than we were a year ago," he added.
Earlier in the day, Barofsky issued a scathing report criticizing the Treasury Department for not being transparent enough about how bailout money was being spent. He warned that this could have lasting effects.
"I think this cynicism, this anger, this distrust of government that's born in part from a lack of transparency could have far-reaching ramifications, whether there's a next crisis or when anytime the government is going to call on the American people, the taxpayer, to support necessary programs," Barofsky said.
NEW YORK (CNNMoney.com) - Just as federal officials seek to wind down many bailout programs, the Obama administration announced Monday yet another initiative to prop up the housing market.
Administration officials unveiled a plan to aid state and local housing finance agencies, which provide mortgages to first-time and lower-income homebuyers and enable the development or rehabilitation of rental properties. Officials declined to put a pricetag on the program, but said there would be no cost to taxpayers.
"This initiative is critical to helping working families maintain access to affordable rental housing and homeownership in tough economic times," said Treasury Secretary Tim Geithner.
Under the initiative, the Treasury Department, along with Fannie Mae (FNM, Fortune 500) and Freddie Mac (FRE, Fortune 500), will purchase housing bonds issued by the finance agencies. This will give the groups the funding needed to make new loans. Also, the government will provide a temporary credit program to allow the agencies to refinance their existing bonds to more favorable terms.
WASHINGTON (CNN) – Amid nervousness about states' economies and a growing unemployment rate, the Obama administration is considering a series of measures aimed at putting many Americans back to work before the 2010 midterm elections, sources close to the process told CNN.
The effort is largely being directed by the Treasury Department and Lawrence Summers, director of the National Economic Council, one source said.
Ideas include enhancing tax credit flexibility for small businesses, extending unemployment and health benefits and offering states temporary "loan packages" to help governors get through the worst of the recession.
Unlike the stimulus package, the loans to states would be voluntary: "We would like to avoid the stimulus problem," the source said.
Other options being examined by the White House, according to two Democratic sources close to the process, include extending the $8,000 tax credit for new homebuyers, set to expire November 30.
NEW YORK (CNNMoney.com) - Mortgage servicers have put nearly 9% of delinquent borrowers into trial modifications under the Obama foreclosure prevention plan, the Treasury Department said Tuesday.
That translates into 235,247 loans that were at least 60 days delinquent at the 38 loan servicing firms participating in the program. Institutions have extended modification offers to 406,542 troubled borrowers, or 15% of those behind in payments.
Under fire for the program's rocky start, the Obama administration says it is on pace to help up to four million homeowners over the next three years. The initiative was announced in February and the first institutions to join began accepting applications in April.
Tuesday's report come a week after the administration called servicers to Washington, D.C., to discuss ramping up the program's implementation afterhearing a flood of complaints from borrowers. Officials want to see 500,000 loan modifications under way by Nov. 1.
NEW YORK (CNNMoney.com) – The government said Friday the federal budget deficit for the first half of fiscal 2009 jumped to $956.8 billion, more than $500 billion above the gap for all of the prior fiscal year.
The Treasury Department said the federal budget deficit grew by $192.3 billion in March, according to the report released Friday.
Economists were expecting the budget deficit to grow by $160 billion in March, according to a consensus estimate compiled by Briefing.com.
In February, the government added $192.8 billion to the deficit. Last March, the government added $48.2 billion to the deficit.
The deficit for the year that began in October is 110% above the $454.8 billion gap in all of fiscal 2008.
The government has been spending at a record pace recently in an effort to pull the economy out of recession, jumpstart lending, and recapitalize the nation's financial system.
(CNN) – The Treasury Department launched an interactive new Web site Tuesday in an effort to bring about accountability and transparency to the Obama administration's Financial Stability Plan.
FinancialStability.gov, announced last month by Treasury Secretary Tim Geithner, is designed to track how tax dollars are spent in relation to the administration's financial stability, housing, and economic recovery programs. The "impact" page displays hard facts, hosting a map indicating locations where the department has funded transactions through the Capital Purchase Program. Clicking on a state provides a breakdown of when the transactions took place and the price paid for the assets.
According to the map, banks in Montana, Vermont, and New Mexico have received $0, while the remaining 48 states received investments "ranging from as small as about $301,000 to as large as $25 billion." Not surprisingly, New York received the most funding with over 80 billion.
Economic data charts, published lists of bank lending surveys designed to better track bank lending, and a search option which will display all physical contracts and agreements related to the financial stability plan are also featured.
And in an effort to enhance its user-friendly appeal, FinancialStability.gov includes a "decoder" section which defines common financial terms used throughout the site.
NEW YORK (CNNMoney.com) - The officials charged with overseeing the $700 billion financial bailout told lawmakers Tuesday that the Treasury Department must do more to ensure that taxpayer dollars are properly spent and that the public is kept in the loop.
The officials were particularly angered about a lack of accounting for the sprawling program, complaining that Treasury didn't make any effort to monitor money that went to the 364 banks its has invested in, despite requests for information by oversight panels.
"Either you get Treasury to get some religion on this point and get some standards ... or Congress [will be] forced to step in," said Harvard Law professor Elizabeth Warren, chairman of the Congressional Oversight Panel, at a Senate Banking Committee hearing.
The office of Inspector General for the TARP program, one of the oversight groups, did its own survey of banks that received money, and every bank that got money responded.
Neil Barofsky, special inspector general, said that some banks "co-mingled" their bailout money and couldn't break out exactly what it was used for. But other banks kept their TARP money separate and could point to new loans that had been issued due to government help.
"Some banks described some lending programs that couldn't be done without TARP funding," Barofsky said.
(CNN) - President Obama on Saturday announced his plans to nominate three more people for posts at the Department of the Treasury.
Obama selected Helen Elizabeth Garrett as assistant secretary for tax policy; Michael Barr as assistant secretary for financial institutions; and George Madison as general counsel.
“The Treasury Department will be well-served by the expertise and commitment of these fine individuals. Under the leadership of Secretary [Timothy] Geithner, I have great confidence that they will be valuable and effective additions to our team as we tackle our nation’s economic challenges,” the president said in a written statement.
Bios of the nominees, as prepared by the White House, are available after the jump.