More TARP Money and Other Taxpayer Funds to Bailout Bank of America
ProPublica reports (http://www.propublica.org/article/bofa-and-govts-secret-deal-090116) that the U.S. Treasury, the FDIC and the Federal Reserve Bank have teamed up to provide up to $97.5 billion to cover losses on $118 billion of troubled assets of Merrill Lynch that BofA will inherit as part of its acquisition of Merrill Lynch. A total of $45 billion of TARP funds have been committed to BofA, including $20 billion from the TARP funds not yet even released. Our guess is that the "troubled assets" include a healthy portion of mortgage-related securities. Of course, none of the $45 billion has gone to homeowners, so the troubled assets underlying the Merrill troubled assets will remain troubled. Just another chapter in the continuing saga of the federal government Wall Street Bailout with taxpayer funds, while there's virtually no Main Street bailout to cover losses of home equity or to stimulate home buying. $45 billion amounts to about $225 for every one of the approximately 167 million 1-4 unit residential properties in the U.S. or about $270 for every one of the approxmately 200 million adults in the U.S. The $700 billion of total available TARP funds amounts to about $4,200 for every residential property in the U.S., or about $3,500 per adult. Suppose that money (and more) got lent by the federal government as a 3% 30-year fixed rate loan in an amount of 80% of the drop in value of each property, equally split between property owner and its mortgage lender adn not secured by the property to the all property owners instead of the banks, as we propose in the AllStreets Bailout Plan? That would bail out the properties, the property owners, the lenders, the mortgage securities and the companies that hold them, all at once. The AllStreets Plan would offer the same federal loans in fair amounts (10% of median property value in each individual's area of residence, minimum of $5,000) to every adult American who doesn't own property or don't have a mortgage, to use for either reduction of credit card debt, financing a business or as a personal loan. That would restore order to the economy in dramatic fashion with no ultimate cost to taxpayers (loans not handouts!). No more ineffective favoritism to the formerly rich and powerful!
Posted by The Mortgage News at 1/18/2009 9:58 AM 
Categories: bank bailout, economic stimulus, government bailouts, Credit Crisis, TARP funds, AllStreets Bailout Plan, Wall Street bailout
Categories: bank bailout, economic stimulus, government bailouts, Credit Crisis, TARP funds, AllStreets Bailout Plan, Wall Street bailout
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