DALLAS, April 14 /PRNewswire/ -- In an exclusive article in the April issue of DS News, the only news source dedicated entirely to the residential mortgage default servicing industry, Adam Weinstein, a former editor of the Wall Street Journal, poses the question: did the Troubled Asset Relief Program (TARP) trickle away needed funds, making matters worse?
According to a bipartisan Congressional Oversight Panel, the Treasury paid more for the assets it purchased under TARP than their market value at the time the program was approved. For every $100 spent, the panel said, the Treasury received about $66 in value, translating to a government loss of $78 billion on its first quarter-trillion-dollar spending spree. On top of the program's failure to unfreeze credit, Weinstein says some have argued that without the bailout, the bottoms in housing prices and mortgage assets might be in sight.
As Weinstein points out in his article, entitled "Plugging the Leak," concerns like these make TARP a blunt weapon for attacking the mortgage crisis, and it looks promising that the government may have finally found the right place to focus its dollars and its energies-by tackling legacy mortgage assets and mortgage-backed securities head-on.
Many economists and housing experts argue that the government's PPIP finally targets the issue at the heart of the nation's financial crisis-distressed mortgage assets-and therefore has the potential to increase market liquidity.
The U.S. Treasury takes the position that the path to a housing and economic recovery must involve the private sector. The Obama administration recently announced its Public-Private Investment Program (PPIP), which will partner government funding with private capital to relieve lenders of toxic legacy assets and increase confidence in the financial markets. In the spirit of this private participation approach, DS News is hosting the Distressed Asset Roundtable & Exchange (DARE).
DARE will bring private equity and institutional investors together with lenders and mortgage default servicing professionals at a time when a collaborative effort across industries is vital to bring relief to the nation's housing markets. This industry-first event will take place on May 12 and 13 in New York City.
To see more on DS News' coverage of the housing and financial crises, go to www.dsnews.com. For additional details on DARE, visit www.dsnewsdare.com.
