Missteps in GMAC Bailout Could Cost Taxpayers $6.3 Billion

In their bailout of GMAC, U.S. officials took some key missteps that may have resulted in higher taxpayer costs and an uncertain outlook for the financial services giant, according to the most recent report by the government’s official overseer of bailout expenditures. The government should have pursued other options — including a bankruptcy restructuring — for GMAC, the in-house credit arm of General Motors that has expanded over the years to providing home mortgages, insurance and commercial loan products, said the Congressional Oversight Panel.

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Citigroup's Pandit: We're 'Healthier' Thanks to Taxpayers

Citigroup Chief Executive Vikram Pandit today thanked the U.S. government and American taxpayers for providing a vital $45 billion bailout infusion into the banking institution and reminded them of the 27 percent stake in Citi they still hold. “American taxpayers still hold 27 percent of Citi’s common stock, and we look forward to helping them realize value on that investment,” Pandit said. “Citi owes a large debt of gratitude to American taxpayers.”

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Risk Re-Defined: Fannie, Freddie & Unlimited Credit

In its controversial Christmas Eve announcement, the U.S. Treasury said the following on overhauling the housing finance enterprises of Fannie Mae and Freddie Mac after giving both of them unlimited credit lines for three years. “The Administration is in the process of reviewing issues around longer term reform of the federal government’s role in the housing market.” Treasury also said that President Obama would provide a ‘preliminary report” in his fiscal 2011 budget in February 2010. That report did not happen.

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HAMP Critics: What is the True Foreclosure Rescue Rate?

The question of the true success rate of the Obama Administration’s Home Affordable Modification Program is not being answered by the U.S. Treasury in its public reports, some lawmakers allege. And even housing market experts and watchdogs are saying the foreclosure prevention campaign amounts to a futile effort, with default rates as high as 70 percent projected for borrowers with modified mortgages. On Thursday, a report authored by two House Republicans was released that called HAMP a complete failure.

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Obama Mulls Foreclosure Ban, Forcing HAMP Review

Under growing pressure to improve its much-criticized mortgage relief efforts, the Obama Administration is considering a ban on all foreclosures – unless lenders have screened borrowers for inclusion in the government’s Home Affordable Modification Program, according to media reports. Bloomberg first reported the proposal based on a U.S. Treasury document. The plan “prohibits referral to foreclosure until borrower is evaluated and found ineligible for HAMP or reasonable contact efforts have failed.”

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Geithner: We're Not Ready to Overhaul Fannie, Freddie

The overhaul of the U.S.-“sponsored’ housing finance system – more commonly known as Fannie Mae and Freddie Mac – won’t even be proposed until next year, U.S. Treasury Secretary Timothy Geithner told Congress today. But Geithner said it won’t be necessary to place Fannie and Freddie fully on the federal budget, despite the two corporations being under U.S. “conservatorship,” giving the government a quasi-majority stakeholder position in the publicly-traded entities.

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Officials: Foreclosure Rescue Tally Jumps to 116,000

The number of homeowners facing foreclosure that have permanently-reduced mortgage payments was up to 116,000 in January, almost double the number from the previous month, the U.S. Treasury and the Department of Housing and Urban Development (HUD) announced today. The January update for the government’s Home Affordable Modification Program, HAMP, also showed that an additional 76,000 borrowers are pending permanent modifications.

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Bank of America Finalizes 12,700 Mortgage Reductions

Bank of America said it has provided permanent mortgage relief to 12,700 borrowers facing possible foreclosure as of January, up from 3,200 reported the previous month under the government’s Home Affordable Modification Program (HAMP). The nation’s largest mortgage lender, which had faced some criticism late last year for its conversion rate, reported today that it has another 13,700 permanent modifications that “are pending, meaning final modified loan terms have been approved and documents have been sent for the customers’ signatures.”

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Lenders in Hard-Hit Areas to Get Low-Rate TARP Capital

More than 200 community banks, thrifts and credit unions in neighborhoods hardest hit by the recession will receive low-interest capital to boost small business lending, the U.S. Treasury has announced as part of a new effort under its bailout program. The $1 billion initiative under the Troubled Asset Relief Program, TARP, targets Community Development Financial Institutions, lenders certified by the Treasury as providing more than 60 percent of their small business lending and other economic development efforts to “underserved communities.”

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Obama's Small Business Plan: $30B from TARP; Boost SBA

President Obama today formally launched his already-controversial proposal to re-direct $30 billion in bailout funds into community banks to bolster small business lending. “The more loans these banks provide to credit-worthy small businesses, the better a deal we’ll give them on capital from this fund,” Obama said in prepared remarks. The program would provide better rates on risk-related capital to banks that boost lending to small businesses.

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Overseer Sheds Doubt on TARP Helping Small-Biz, Foreclosures

A somber and pessimistic assessment of the government’s bailout program has been issued by the official overseer of the $700 billion Troubled Asset Relief Program (TARP) – concluding that the fundamental problems in the U.S. financial system are still in place for another crisis. The report also looks pessimistically to the re-focused future role of TARP funds for increasing small business lending and helping desperate homeowners avoid foreclosures as outlined in recent weeks by President Obama and U.S. Treasury Secretary Timothy Geithner. But the “leverage” U.S. officials had over the major banks is now gone, putting in doubt the effectiveness of a new lending pipeline to small businesses.

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