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60 DS News Government Progress Report (Program) DS News Housing Score A REGULATION AND OVERSIGHT TARP is overseen by the Office of Financial Stability (OFS), U.S. Department of the Treasury. Created in October 2008, the OFS is tasked to implement the TARP program to help stabilize U.S. financial sys- tems and promote economic recovery following the 2008 financial crisis. OFS is led by an Assistant Sec- retary for Financial Stability, who is appointed by the President and confirmed by the U.S. Senate. OFS is now carefully managing the wind-down of TARP and the effort to recover taxpayers' outstanding investments. OFS is also continuing to implement initiatives under TARP to help struggling homeown- ers avoid foreclosure. MISSION » TARP was created to help stabilize the financial system during the financial crisis of 2008, and was launched by Treasury during the Bush administration under the Making Home Affordable (MHA) program to provide mortgage relief to homeowners and pre- vent avoidable foreclosures. » In addition to offering help to the housing / mortgage industry, TARP rescued AIG, the auto industry, the credit industry, and banks. » One of the housing programs created under TARP is HAMP, which is the cornerstone of MHA and per- manently reduces mortgage payments to affordable levels for qualifying borrowers. » Treasury also introduced the Hardest Hit Fund (HHF), which helps those states hardest hit by home price declines and high unemployment to develop locally- tailored foreclosure prevention solutions. » Since April 2009 (as of February 2014), Treasury says an estimated 8.2 million loan modifications and other mortgage assistance actions have been executed between both private and public sources, which equates to twice the number of foreclosure comple- tions over the same period. » Treasury committed up to $45.6 billion to help home- owners avoid foreclosure under TARP. SUCCESSES » Treasury wrote "... the great paradox of TARP is that while it was so unpopular, the program is perhaps the best recent example of effective, bipartisan government. The law was passed with bipartisan support, and the program was carried out quickly, boldly, and wisely, across both a Republican and Democratic Administration." » The administration's purchase authority for TARP was reduced from $700 billion to $475 billion with the passage of the Dodd-Frank Act. All in all, about $420 billion of TARP funds were actually used. » The money TARP loaned out is being returned and faster than expected. As of May 31, 2014, cumulative collections under TARP, together with Treasury's ad- ditional proceeds from the sale of non-TARP shares of AIG, exceed total disbursements by more than $14.6 billion. » Treasury has recovered $438.7 billion or 103.3 per- cent of the disbursed amount when the $17.6 billion of non-TARP AIG funds collected is included. » All recovered funds are deposited in the U.S. Trea- sury and go to reducing the national debt. » The Obama Administration remains committed to passing a Financial Crisis Responsibility Fee to make sure taxpayers are fully repaid for any remaining costs of TARP. » Treasury has identified several key accomplishments of TARP: » It has been remarkably effective in helping to unfreeze the markets for credit and capital. » It reduced the cost of borrowing, restoring confidence in the financial system, and restarting economic growth. » It achieved its purpose of injecting capital into financial markets, preventing the collapse of spending and restoring confidence. » Costs of TARP were far lower than originally projected. OPPORTUNITIES/ISSUES » Despite some obvious successes achieved through TARP, some objectors still believe this entity was given too much power without requiring a lot of ac- countability. They also resent government interfer- ence in banking. » TARP dissenters dislike the infusion of government capital, not private capital, although it may have been needed at the time. They feel that TARP is a way for the government to buy interests in the private busi- ness of banking. TARP has recovered 99.2% of disbursed funds as of June 2014 $12.4 billion has been dispersed specifically for housing TARP's Hardest Hit fund provides $7.6 billion in aid to the 18 hardest hit states TARP's program, HAMP, has helped 1.3 million families $45.6 billion committed to helping homeowners avoid foreclosure Troubled Asset Relief Program (TARP) | CORPORATE HEADQUARTERS: Washington, D.C. 99.2% $12.4 BILLION $7.6 BILLION 1.3 MILLION $45.6 BILLION

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