Need quick finance? Try Payday loans Less paperwork, fast moneyU.S. Treasury Secretary Henry Paulson praised a Federal Reserve lending program aimed at extending more credit to consumers and businesses and said he is working on aid for homeowners facing foreclosure.“I and my regulatory colleagues are committed to using all the tools at our disposal to preserve the strength of our financial institutions and stabilize our financial markets, to minimize the spillover into the rest of the economy,” Paulson said in a statement at a press conference in Washington.
With almost half of the $700 billion Troubled Asset Relief Program committed, Paulson said he’s studying ways to use some of the money to help stabilize housing. A record number of Americans are defaulting on their mortgages and getting evicted from their homes -- a problem Paulson called the “root” of the economic downturn.
“We’re continuing to work every day on coming up with a program, a TARP program, to mitigate foreclosures,” he said in response to a question. “I am going to run right to the end, and if you’ve got any doubt about that, I tell you, you’re missing the point.”Separately today, Paulson met with New York Fed President Timothy Geithner, who was tapped by President-elect Barack Obama to become the next Treasury secretary. Paulson pledged to work “seamlessly” with Geithner and members of Obama’s transition team.
Fannie, Freddie
The Treasury committed $20 billion of the TARP as part of a new $200 billion plan to support consumer and small-business loans. The Fed separately said it will buy as much as $600 billion in debt issued or backed by government-chartered housing finance companies such as Fannie Mae and Freddie Mac.The program “underscores our support for the housing market,” Paulson said. “Nothing is more important to getting through this housing correction than the availability of mortgage finance.”
At the press conference, Paulson called the $200 billion “a starting point.” He said there’s no timeline yet for asking Congress for permission to use the remaining $350 billion of TARP authority lawmakers approved in October.
The efforts by Paulson and Fed Chairman Ben S. Bernanke are the latest attempt to alleviate the credit crunch. Paulson has committed all except $20 billion of the first half of the $700 billion TARP program with less than two months before the end of the Bush administration.
‘New Challenges’
“It will take time to work through the difficulties in our markets and our economy, and new challenges will continue to arise,” Paulson said.Under the new Term Asset-Backed Securities Loan Facility, the Fed will lend as much as $200 billion on a non-recourse basis to holders of AAA-rated asset-backed securities backed by “newly and recently originated” loans, such as for education, credit cards, automobiles and loans guaranteed by the Small Business Administration.
Paulson has committed $270 billion to inject capital into banks, including $20 billion as part of a rescue of Citigroup Inc. two days ago, and brokered a deal providing $40 billion to insurer American International Group Inc.
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