Many of the largest banks in the country have been paying back the federal government for the loans given to them several years ago when they were in financial difficulty. However, this is not true of all financial institutions. More than 600 financial institutions still collectively owe the federal government more than $30 billion dollars. This amounts to about 13% of the $245 billion dollars that was given to banks by the federal government to bail them out.
SunTrust and KeyBank are two of the larger financial institutions still utilizing federal funds from the bailout. Some of the financial institutions have used the federal bailout money to buy other banks and to line their investment portfolios. This is not what the federal bailout funds were intended for!
When the federal government became involved in the bailout, there was no end game as to how to extricate themselves from loaning money to banks. The Troubled Asset Relief Program, commonly referred to as TARP, injected the federal funds into financial institutions to prop them up during the height of the banking crisis. The issue now is when does the government get this money back and when does the program end.
The Bailout Program is Profitable
The Treasury Department has indicated that they anticipate receiving a $12 billion dollar profit related to the funds loaned to banks under the bank bailout program. However, whether the federal government will ultimately make money or lose money depends on what happens with the 600 remaining banks that are still utilizing taxpayer funds. It should be noted that more than 140 banks have not been making their payments to the federal government. A substantial number of these banks will ultimately default on their debt to the federal government. Under the TARP program, the banks can hold onto their federal funds up to three years. The TARP program is also causing many small banks to merge to become more financially stable. Larger banks have access to capital, while smaller banks have greater difficulty obtaining capital. The intent to the TARP program was to render the banking industry in the United States healthy. Hopefully this program will be a continued success.
Long Island Foreclosure Defense Attorneys
The foreclosure defense and bankruptcy attorneys at the Law Offices of Schlissel DeCorpo can help you with the following items: mortgage modifications, mortgage modifications that fail to meet your needs, foreclosure conferences, defective foreclosure lawsuits, predatory lending issues, real estate problems, defective mortgages, bad faith by financial institutions, Chapter 7 bankruptcies, Chapter 13 bankruptcies, providing information concerning mortgage terms and foreclosure terms, discussing the types of bankruptcy that may be available to you, re-establishing credit after bankruptcy, eliminating second mortgages and stopping foreclosure.
You also may want to take a look at our foreclosure blog. Call us for a consultation for any of the aforementioned items.
