US Treasury Wishes to Use TARP to Aid the Foreclosure Troubles

Time icon December 6th, 2008 by Autor Joseph Smith

The Secretary of Treasury wants to reinforce the financial system to have loan availability back into the economy. As of now they are eyeing projects that will make use of the Troubled Asset Relief Program (TARP) fund to improve the current foreclosure problems.

Secretary of Treasury Henry M. Paulson

With a $700 billion fund, banks and other lenders that participate in TARP will get to help save home in foreclosure.

The Bush administration is about to end, so Paulson would like to do as much as he can with the TARP. The Treasury has allotted $20 billion to a government reserve lending project that will make credit available to businesses and consumers. This will open more windows for impending foreclosures to be resolved.

With the abandonment of the original TARP commitment to buy bad loan assets, Paulson denies the allegations that he is allowing some finances to fail. He is confident that we are now taking the right path in stabilizing our financial system while supporting the flow of loans in the economy.

With the confirmed economic recession, worst financial crisis for 80 years and growing foreclosures, the hope of stabilization may appear difficult.

The $20 billion of the half of TARP is now allotted to the lenders like the banks, AIG, and Fannie and Freddie. The amount will hopefully aid the lenders in providing loans for the homeowners with impending foreclosures. Paulson has not made it official if he will have the other $350 billion for TARP before Barack Obama is inaugurated as the president.

The Congress has been calling Paulson about forcing TARP-participating banks in using the budget for lending. Paulson has not answered.

Banks are expected to increase their loans because of this federal aid. It may be slow, but it may eventually happen as certainty is regained. As fund for lending re-appear in the market, more homeowners will resolve their foreclosure problems.

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