The Political Bridge

Another Billion Dollar Plus Governmental Loan to a Corporate Giant: GMAC Financial Services

NEW YORK, Dec 29 (Reuters) - GMAC Financial Services is close to getting about $3.5 billion in added aid from the U.S. government, on top of the $12.5 billion already received since December 2008, the Wall Street Journal reported.

The announcement is expected within days and will coincide with GMAC taking additional steps to absorb losses related to its mortgage operations, the Journal reported, citing people familiar with the situation

The AFL-CIO's Problems with the Senate Health Care Revision Bill: "Bailout of the Insurance Industry"

From Workday Minnesota

The federation is frustrated with the health care revision bill for several reasons:

• Gone are cost-control measures such as enactment of a “public option” to compete with private insurers and  letting people aged 55-64 buy in to Medicare.

• Provides a tax on everyone’s health insurance, above a floor of $8,500 for an individual and $23,000 for a family.  

 

Many (labor) leaders now view the developing Senate health bill as “a bailout of the insurance industry."

Congressman John Yarmuth (D-KY) Introduces Major New Legislation to Move TARP Funds From Wall Street to Main Street

Congressman John Yarmuth

Representing Kentucky’s 3^rd Congressional District

PRESS RELEASE  

   
FOR IMMEDIATE RELEASE

December 14, 2009   

MEDIA CONTACT

Trey Pollard 202.225.5401   

The “Give Main Street Credit Act” Will Provide $20 Billion in Low-Interest, Direct Loans to American Small Businesses

(Washington, DC) Today, Congressman John Yarmuth (KY-3) announced the introduction of the Give Credit to Main Street Act – new legislation that would require $20 billion in low-interest loans be made available to small businesses throughout the nation. Using money previously set aside for Wall Street financial institutions and big banks via the Troubled Asset Relief Program (TARP), the bill redirects funds to the Small Business Administration (SBA) to provide direct lending to small companies.

“Small businesses drive economic growth and employ 50 percent of our nation’s workforce. But, even with the assistance of the Troubled Asset Relief Program, big Wall Street banks are not lending,” said Congressman Yarmuth. “We need to put Main Street ahead of Wall Street – and the bill I have introduced will give small businesses loans at the same low rate the big banks enjoy, ensuring they have the resources they need to grow and create jobs.”

The introduction of Congressman Yarmuth’s legislation coincides with President Obama’s meeting today with CEOs from some of the nation’s largest banking interests, in which the President will encourage the banking industry to unfreeze lending to small businesses.

Of the 22 banks that received the most TARP funding, three provide no small business loans at all. Over the past six months, total small business lending by these 22 banks dropped by more than $10.5 billion while SBA loan guarantees are projected to drop by $10 billion this year.

The Give Credit to Main Street Act would make loans available directly to small businesses through the Small Business Administration. Loans would be made with interest accumulating at the federal funds rate, which currently stands at 0.25 percent, with interest-only payments required for the first two years.

 

Have Conservative GOPs Blocked Senate Plans to Save Transportation Projects, including Construction of the Louisville Bridges

(Money is desperately to save America's crumbling infrastructure, DrTed)

From DC.Streets Blog.Org

A bipartisan bid to extend existing federal transportation law for three months -- and tap the TARP bailout fund to avert the cancellation of $8.7 billion in contract authority -- was rejected on the Senate floor last night after GOP senators insisted on using stimulus money, rather than bailout cash, to fix the problem.

Senate environment committee chairman Barbara Boxer (D-CA) and her panel's senior Republican, Sen. Jim Inhofe (OK), agreed with their respective party leaders to shift $300 million in bailout money as a temporary fix to prevent state DOTs from canceling projects…

Watch Chair Elizabeth Warren of the TARP Congressional Oversight Panel introduces the COP October Report: "An Assessment of Foreclosure Mitigation Efforts After Six Months."

The Congressional Overwatch Panel: Treasury's Strategy is 'Inadequate' to Address Coming Wave of Foreclosures; For Many Homeowners, Foreclosure Will Be Delayed, Not Avoided

October 9, 2009

For Immediate Release

WASHINGTON, D.C. - The Congressional Oversight Panel today released its October oversight report, "An Assessment of Foreclosure Mitigation Efforts after Six Months." The Panel expresses concern about the limited scope and scale of the Making Home Affordable program and questions whether Treasury's strategy will lead to permanent mortgage modifications for many homeowners.

Rising unemployment, weak home prices, and impending mortgage rate resets still threaten to cast millions of Americans out of their homes, with devastating effects on families, local communities, and the broader economy. One in eight mortgages is currently in foreclosure or default, and this crisis is estimated to produce 10 to 12 million foreclosures. While Treasury is still in the early stages of implementing its centerpiece foreclosure mitigation program, called the Home Affordable Modification Program (HAMP), the Panel has three concerns with the current approach.

The Panel found, "It increasingly appears that HAMP is targeted at the housing crisis as it existed six months ago, rather than as it exists right now." The program is limited to certain mortgage configurations. Many of the coming foreclosures are likely to be payment option adjustable rate mortgage and interest-only loan resets, many of which exceed HAMP eligibility limits. Treasury's strategy also makes no provision for foreclosures due to unemployment, which now appear to be one of the biggest drivers of foreclosure.

Foreclosures continue every day as Treasury ramps up the program, with foreclosure starts outpacing new HAMP trial modifications at a rate of more than two to one. Some homeowners who would have qualified for modifications may have lost their homes before the program could reach them. Even once the program is fully operational, Treasury's own projections indicate, in the best case, fewer than half of the predicted foreclosures would be avoided.

The Panel found, "The result for many homeowners could be that foreclosure is delayed, not avoided." HAMP modifications are often not permanent: For many homeowners, payments will rise after five years, and although the program is still in its early stages, only a very small proportion of trial modifications have converted into longer term modifications. The Panel is also concerned about homeowners who face negative equity or are "underwater" - that is, the value of the loan exceeds the value of their home. For many borrowers, HAMP modifications increase negative equity, a factor that appears to be associated with increased rates of re-default.

The full report can be found at cop.senate.gov. The Panel held a field hearing in Philadelphia with senior executives of Treasury, Fannie Mae, Freddie Mac, representatives for major financial institutions and housing advocates to inform the findings of this report. Testimony from the hearing can be found on the Panel's website.

The Congressional Oversight Panel was created to oversee the expenditure of the Troubled Asset Relief Program (TARP) funds authorized by Congress in the Emergency Economic Stabilization Act of 2008 (EESA) and to provide recommendations on regulatory reform. The Panel members are: former Securities and Exchange Commissioner Paul S. Atkins, Congressman Jeb Hensarling (R-TX), Richard H. Neiman, Superintendent of Banks for the State of New York, Damon Silvers, Associate General Counsel of the AFL-CIO and Elizabeth Warren, Leo Gottlieb Professor of Law at Harvard Law School.