The federal bailout of the U.S. financial system, which was originally forecast to cost as much as $700 billion, is expected to cost far less than expected, according to a newly released congressional report.
The federal bailout, known as the Troubled Asset Relief Program (TARP), was launched by the Bush administration in response to the 2008 financial crisis and was to include aid to struggling home owners. But TARP is expected to now cost taxpayers about $25 billion because it did not accomplish all that envisioned to help home owners avoid foreclosure, a congressional panel said.
The Treasury Department allocated $45.6 billion for three major housing programs to help home owners, including the Home Affordable Modification Program (or HAMP), a refinancing program run by the Federal Housing Administration to aid underwater home owners, and a program designed to help hard-hit areas. But the Treasury Department only spent about $1 billion in TARP money for the foreclosure prevention effort, the panel noted.
Source: “TARP’s Lower Cost Reflects Troubles of Foreclosure Effort,” Dow Jones Business News (March 16, 2011) and “U.S. Senate Panel to Step TARP Oversight-Chairman,” Reuters News (March 17, 2011)
Unfortunately this, along with restrictions from the Fed’s regarding loans in the Sacramento and Placerville, California regions continue to restrict economic recovery. Other related articles at: www.sierraproperties.com