TARP moves into the Black March 30, 2011Posted by shaferfinancial in Finance, Uncategorized.
Tags: Real Estate market still problematic, TARP showing a profit, uneven recovery
An expected repayment of $7.4B by SunTrust Banks and KeyCorp to the Troubled Asset Relief Program today will push the Treasury’s bailout of banks into profit. The original TARP invested $245B during the financial crisis, the repayments will bring the amount returned to $251B for a $6B profit.
More banks are planning to re-pay the government over the next 6 months moving it into the black further.
Meanwhile the government is trying to legislate the mortgage market making it extremely difficult to buy a house with less than 20% down. This will continue the destruction of the real estate market pushing out many folks who will not be able to save the 20%. I don’t believe this is needed. Maybe if the mortgage companies actually did real underwriting instead of looking the other way, customers with good credit, jobs and some reserves should be allowed to purchase a home with 10% down. The new rules would encourage folks to use all their available reserves for that 20% down payment leaving them at risk if they lose a job or get sick. This seems to be short sighted, reactionary legislation.
Finally, government revenues rose 5% last year, the first increase since 2006. However, Wells Fargo issued a report that suggested an uneven recovery with California and New York well on their way to recovery and Florida and Nevada lagging behind. One more reason why I am happy I sold my Florida home!