On 9th June US treasury announced that around 19 banks would be repaying there TARP money.Though it didnt disclose the names of the banks ,but a few intelligent guesses would include the likes of Goldman Sachs,JP Morgna and AMEX to name a few.
So does that mean US economy is bouncing back to normal.Has the crisis hit the bottom?
Well thats a million dollar question to be answered (in fact with current bailout plans and accrued losses -its a trillion dollar question ) :-)
Coming back to the topic of repayment of TARP money ,around 19 banks have been granted permission to buy back the warrants that the Treasury holds in each company at “fair market value.” These 19 banks are in addition to 22 smaller institutions which have already repaid their TARP dollars to the Treasury.
While some analysts are calling this a sign of stabilization in the banking system ,the critics are arguing that what are the possibilities of these banks not asking for more funds in near future.They go on the explain that the current stress test(the basis of which these banks are being allowed to repay their TARP funds) assume a national unemployment rate of 8.9%. Now at 9.4% and accelerating; they believe that banks should be reassessed under worsening conditions.
What does this mean to the Loan Modification Industry ?
We would need to wait and see what impact it has on the Loan Modification Industry ? But one thing is for sure ,with banks no longer being involved with TARP money ,their obligations towards distressed homeowners and treasury are bound to become less focussed.There are questions being raised as to why would a Bank who has payed TARP money ,try to implement OBAMA bailout plan.
This arguement sounds as a double edged sword for the homeowners,though it may seem to them that the OBAMA goverment has done enough to bail them out ,but in reality they wouldnt qualify for loan modification programs of the banks who are bound to be a bit more stringent.
This would surely give rise to more generation of loan modification leads and loan modification attorneys and brokers are bound to get more business in coming days.
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