Back from the Brink: Treasury Celebrates Housing Recovery
Industry Update
October 3, 2016
In 2008, the Emergency Economic Stabilization Act was enacted, implementing the Troubled Asset Relief Program (TARP). In a new report from the U.S. Department of the Treasury’s spokesperson, Rob Runyan, it is reported that this eighth anniversary serves as a reminder that this program was not only central to avoiding a financial collapse and getting the economy growing again.
To date, a total of $433.7 billion has been disbursed under TARP and as of August 31, cumulative collections under TARP, together with Treasury’s additional proceeds from the sale of non-TARP shares of AIG, total $442.1 billion. This exceeds disbursements by $8.4 billion.
This program was once feared to potentially lose taxpayers hundreds of billions of dollars but Treasury reports that instead it has generated a positive return.
“That’s a testament to TARP’s implementation but also to the other support provided to get the economy growing—including the Recovery Act and a dozen additional fiscal measures passed from 2009 to 2012,” says Runyan.
In addition to American taxpayers receiving their money back with TARP, they also gained Making Home Affordable (MHA), The Home Affordable Modification Program (HAMP), and The Hardest Hit Fund (HHF) program.
Through Making Home Affordable (MHA), approximately 2.7 million assistance actions helped homeowners avoid foreclosure. This has also benefited millions of their neighbors and communities by stabilizing home prices that typically fall with foreclosures.
The Home Affordable Modification Program (HAMP) which was the first and largest MHA program, assisted in creating the standard for mortgage modifications focused on payment reduction that has been adopted by the industry and will help homeowners avoid foreclosure long after HAMP retires, according to Runyan.
Finally, the Hardest Hit Fund (HHF) program has provided $7.6 billion in TARP funds in targeted assistance to 18 states and the District of Columbia that were determined to be the hardest hit by the Great Recession and housing crisis. Congress gave Treasury the authority to allocate an additional $2 billion late last year to the program to do the success seen in stabilizing neighborhoods in these hard hit communities. The program will now continue to the end of 2020. Runyan says that while the housing market has strengthened across the country, HHF continues to provide much-needed funding that will further aid these hardest-hit communities in recovery.
While no more taxpayer money is being invested in banks under TARP, Runyan notes that taxpayers are still receiving a return from the investments they made to stabilize the American banking system. TARP’s bank programs have recovered $275 billion through repayments and other income. This is $30 billion more than what was originally invested and Treasury continues to exit their investments and replace temporary government support with private capital. Specifically, under the Capital Purchase Program, Treasury invested in 707 financial institutions, 695 of which have exited the program.
Source: DS News
