Troubled Asset Relief Program (TARP):
Implementation and Status
Baird Webel
Specialist in Financial Economics
May 18, 2012
Congressional Research Service
7-5700
www.crs.gov
R41427
CRS Report for Congress
Pr
epared for Members and Committees of Congress

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Troubled Asset Relief Program (TARP): Implementation and Status

Summary
The Troubled Asset Relief Program (TARP) was created by the Emergency Economic
Stabilization Act (EESA; P.L. 110-343) in October 2008. EESA was enacted to address an
ongoing financial crisis that reached near-panic proportions in September 2008. The act granted
the Secretary of the Treasury authority to either purchase or insure up to $700 billion in troubled
assets owned by financial institutions. This authority was granted for up to two years from the
date of enactment and was very broad. In particular, the definitions of both “troubled asset” and
“financial institution” allowed the Secretary wide leeway in deciding what assets might be
purchased or guaranteed and what might qualify as a financial firm.
The financial crisis grew out of an unprecedented housing boom that turned into a housing bust.
Much of the lending for housing during the boom was based on asset-backed securities that used
the repayment of housing loans as the basis of these securities. As housing prices fell and
mortgage defaults increased, these securities became illiquid and fell sharply in value, causing
capital losses for firms holding them. Uncertainty about future losses reduced many firms’ access
to private liquidity, with the loss in liquidity being catastrophic in some cases. September 2008
saw the government takeover of Fannie Mae and Freddie Mac, the bankruptcy of Lehman
Brothers, and the near collapse of AIG, which was saved only by an $85 billion loan from the
Federal Reserve. There was widespread lack of trust in the financial markets as participants were
unsure which firms might be holding so-called toxic assets that might now be worth much less
than previously estimated, and thus might be unreliable counterparties in financial transactions.
This prevented firms from accessing credit markets to meet their liquidity needs.
As EESA moved through Congress, most attention was focused on the idea of the government
purchasing mortgage-related toxic assets, thus alleviating the widespread uncertainty and
suspicion by cleaning up bank balance sheets. The initial TARP Capital Purchase Program,
however, directly added capital onto banks’ balance sheets through preferred share purchases,
rather than removing assets that had become liabilities through purchasing mortgage-related
assets. Several other TARP programs followed, including an asset guarantee program; programs
designed to spur consumer and business lending; financial support for companies such as AIG,
GM, and Chrysler; and programs to aid homeowners at risk of foreclosure. Eventually, the
Public-Private Investment Program resulted in the purchase of some mortgage-related assets, but
this has remained a relatively small part of TARP. Most of the TARP programs are now closed.
With the immediate crisis subsiding through 2009, congressional attention to financial services
turned largely to consider broad regulatory changes. The resulting Dodd-Frank Act (P.L. 111-203)
amended the TARP authority, including (1) reduction of the overall amount to $475 billion; (2)
removal of the ability to reuse TARP funds that had been repaid; and (3) removal of the authority
to create new TARP programs or initiatives. The original TARP authority to purchase new assets
or enter into new contracts expired on October 3, 2010. Outlays under the existing contracts,
however, may continue through the life of these contracts. Overall budget-cost estimates for
TARP have decreased significantly since the passage of EESA, with the latest Congressional
Budget Office estimates foreseeing $32 billion in costs and the latest Treasury estimates
foreseeing $60 billion in costs. Most of these costs are from aid for homeowners, for the insurer
AIG, and for U.S. automakers. The assistance to banks is generally showing a gain for the
government. In the 112th Congress, several bills have been introduced to repeal all or part of
TARP, including H.R. 189, H.R. 430, H.R. 830, H.R. 839, H.R. 1315, S. 162 and S. 527.
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Troubled Asset Relief Program (TARP): Implementation and Status

Contents
Introduction...................................................................................................................................... 1
TARP Programs ............................................................................................................................... 2
Bank Support Programs............................................................................................................. 2
Credit Market Programs ............................................................................................................ 2
Other Programs.......................................................................................................................... 3
Housing Programs ..................................................................................................................... 4
Current Status and Future of TARP ................................................................................................. 4
The Costs of TARP .......................................................................................................................... 6
The 112th Congress and TARP......................................................................................................... 7
Ownership of Private Companies .................................................................................................... 8
TARP and the Dodd-Frank Act...................................................................................................... 10

Tables
Table 1. Outlay of TARP Funds....................................................................................................... 4
Table 2. Incoming TARP Funds....................................................................................................... 5
Table 3. TARP Funds Outstanding or Lost ...................................................................................... 6
Table 4. Detailed Cost/Gain Estimates for TARP............................................................................ 7
Table 5. Companies with Large Government Common Ownership Stakes..................................... 9
Table 6. TARP Changes Following the Dodd-Frank Act............................................................... 11
Table A-1. Capital Purchase Program............................................................................................ 14
Table A-2. Community Development Capital Initiative ................................................................ 14
Table A-3. Citigroup Support (CPP/TIP/AGP).............................................................................. 16
Table A-4. Bank of America Support (CPP/TIP/AGP).................................................................. 17
Table A-5. Public Private Investment Program.............................................................................. 19
Table A-6. Term Asset-Backed Securities Loan Facility ............................................................... 20
Table A-7. Public Private Investment Program.............................................................................. 20
Table A-8. Government Support for the Auto Industry ................................................................. 22
Table A-9. AIG Support ................................................................................................................. 24

Appendixes
Appendix. Details of TARP Programs ........................................................................................... 12

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Contacts
Author Contact Information........................................................................................................... 27

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Introduction
The Troubled Asset Relief Program (TARP) was created by the Emergency Economic
Stabilization Act1 (EESA) enacted on October 3, 2008. EESA was passed by Congress and signed
by President Bush to address an ongoing financial crisis that reached near-panic proportions in
September 2008.
Financial turmoil began in August 2007 when asset-backed securities, particularly those backed
by subprime mortgages, suddenly became illiquid and fell sharply in value as an unprecedented
housing boom turned to a housing bust. The Federal Reserve (Fed) stepped in with emergency
measures to restore liquidity, temporarily calming markets. Losses in mortgage markets, however,
continued and spilled into other markets. Financial firms eventually wrote down many of these
losses, depleting their capital. Uncertainty about future losses on illiquid and complex assets led
to some firms having reduced access to private liquidity, with the loss in liquidity being
catastrophic in some cases.
September 2008 saw the government takeover of Fannie Mae and Freddie Mac, the bankruptcy of
Lehman Brothers, and the near collapse of AIG, which was averted with an $85 billion loan from
the Fed. There was widespread unwillingness to lend in the financial markets as participants were
unsure which firms might be holding so-called toxic assets now worth much less than previously
estimated, and thus might be unreliable counterparties in financial transactions.
EESA authorized the Secretary of the Treasury (hereafter “the Secretary”) to either purchase or
insure up to $700 billion in troubled assets owned by financial firms. This authority was granted
for a maximum of two years from the date of enactment and expired on October 3, 2010. The
general concept was that by removing such assets from the financial system, confidence in
counterparties could be restored and the system could resume functioning. This authority granted
in EESA was very broad. In particular, the definitions of both “troubled assets” and “financial
institutions” allowed the Secretary wide latitude in deciding what assets might be purchased or
guaranteed and what might qualify as a financial institution.2 EESA also included a number of
oversight mechanisms3 and reporting requirements.4 EESA was later amended to strengthen its
executive compensation requirements5 and to reduce the authorized amount to $475 billion.6

1 P.L. 110-343, 12 U.S.C. 5311 et seq.
2 The definition for financial institution gives examples, such as banks and credit unions, but specifically does not limit
the definition to the types of firms named. The definition of troubled asset includes “any financial instrument”
determined by the Secretary, in consultation with the Chairman of the Fed, the purchase of which would promote
financial stability.
3 See CRS Report R40099, The Special Inspector General for the Troubled Asset Relief Program (SIGTARP), by
Vanessa K. Burrows and CRS Report RL34713, Emergency Economic Stabilization Act: Preliminary Analysis of
Oversight Provisions, by Curtis W. Copeland.
4 Treasury publishes their TARP reports at http://www.treasury.gov/initiatives/financial-stability/briefing-room/reports/
Pages/Home.aspx. This report will make use of many of these TARP reports. Monthly overall reports are required
under Section 105(a) of EESA and will be referenced hereafter as, for example, the “December 2010 TARP 105(a)
Report.” Monthly reports on dividends and interest accrued to TARP will be referenced hereafter as, for example, the
“December 2010 TARP Dividends and Interest Report.” These reports are typically published 10 days after the month
in question. Treasury also is required to publish a “TARP Transactions Report” detailing TARP transactions shortly
after they occur. In 2011, Treasury began to publish a “Daily TARP Update” as well.
5 P.L. 111-5; see CRS Report R40540, Executive Compensation Limits in Selected Federal Laws, by Michael V.
Seitzinger and Carol A. Pettit.
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This report provides a brief outline of the programs created under TARP, changes made by
Congress, and a summary of the current status and estimated costs of the program. It also
provides an Appendix that contains detailed discussions of the individual TARP programs. This
report will be updated as warranted by market and legislative events.
TARP Programs
Treasury reacted quickly after the enactment of EESA, announcing the TARP Capital Purchase
Program, on October 14, 2008, and several other programs followed. These programs can be
broadly broken down into Bank Support Programs, Credit Market Programs, Other Programs, and
Housing Programs with several programs under each of these headings:
Bank Support Programs
• Capital Purchase Program (CPP). The CPP did not purchase the mortgage-
backed securities that were seen as toxic to the system, but instead purchased
preferred shares in banks.7 The resulting addition of capital, it was hoped, would
allow banks to overcome the effect of the toxic assets while the assets remained
on bank balance sheets. The CPP is now closed, with $11.6 billion outstanding,
but no additional disbursements are possible under the current program.
• Targeted Investment Program (TIP). This program provided for exceptional
preferred share purchases and was used only for Citigroup and Bank of America.
This program is closed, with all funds repaid.
• Asset Guarantee Program (AGP). The AGP, required by Section 102 of EESA,
provided guarantees that were also part of the exceptional assistance to Citigroup
and Bank of America. This program is closed, with all guarantees cancelled and
no funds having been actually disbursed.
• Community Development Capital Initiative (CDCI ). The CDCI provided for
lower dividend rates on preferred share purchases from banks that target their
lending to small businesses. Many of the participants in the CDCI converted into
the program from the CPP, This program is closed with $0.57 billion still
outstanding, but no new disbursements are possible under the current program.
Credit Market Programs
• Public-Private Investment Program (PPIP). This program provides funds and
guarantees for purchases of mortgage-related securities from bank balance sheets.
Purchases and management of the securities is done by private investors who
have provided capital to invest along with the TARP funds. The PPIP is still open
under previous contracts with $18.0 billion of a possible $21.9 billion disbursed.

(...continued)
6 P.L. 111-203.
7 Preferred stock is an equity instrument, but it does not confer any control over the company and typically has a set
dividend rate to be paid by the company; it is similar economically to debt, but accounted for as equity.
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• Term Asset-Backed Securities Loan Facility (TALF). The program was
operated by the Federal Reserve to support the asset-backed security market.8
Initial losses, should their be any, however, are to accrue to TARP. To this point,
no losses have occurred, although $0.1 billion was disbursed, largely to cover
expenses. Up to $4.2 billion in additional disbursements are possible under
TALF, but substantial disbursements are not expected.
• Section 7(a) Securities Purchase Program. This program supported the Small
Business Administration’s (SBA’s) Section 7(a) loan program through purchases
of pooled SBA guaranteed securities to increase credit availability for small
businesses. It is now closed with no funds outstanding.
Other Programs
• AIG Assistance (Systemically Significant Failing Institution Program).9
TARP preferred share purchases supplemented and ultimately supplanted
assistance to AIG previously provided by the Federal Reserve. The AIG
assistance was restructured in January 2011 with the government peak ownership
92% of AIG’s common equity. The Treasury has begun selling this equity, with
61% remaining to be sold, but no target date has been announced for its final
disposal. Outstanding is $30.4 billion, but no additional disbursements to AIG are
possible under the current program.
• Automobile Industry Support.10 This program initially provided loans to
support General Motors (GM) and Chrysler and ultimately included preferred
share purchases from the auto financing company GMAC (now renamed Ally
Financial). The program ultimately resulted in majority government ownership of
GM (60.8%) and GMAC/Ally Financial (74%), and minority government
ownership of Chrysler (9.9%). The ownership in GM was reduced to 33.3% in a
public share offering in December 2010 and currently stands at 32% with
additional dilution possible due to exercise of private options. The U.S.
government’s ownership stake in Chrysler was sold to Fiat in May 2011. A public
share offering of GMAC/Ally Financial shares was planned in the middle of
2011, but was postponed. No date for sale of the government’s equity in
GMAC/Ally Financial has been announced. Total outstanding is $37.1 billion,
with no new disbursements possible under the current program.

8 For more information, see CRS Report RL34427, Financial Turmoil: Federal Reserve Policy Responses, by Marc
Labonte.
9 For more detailed information on AIG, see CRS Report R40438, Federal Government Assistance for American
International Group (AIG), by Baird Webel.
10 For more information, see CRS Report R41978, The Role of TARP Assistance in the Restructuring of General
Motors, by Bill Canis and Baird Webel, CRS Report R41940, TARP Assistance for Chrysler: Restructuring and
Repayment Issues, by Baird Webel and Bill Canis, and CRS Report R41846, TARP Assistance for the U.S. Motor
Vehicle Industry: Unwinding the Government Stake in GMAC, by Baird Webel, Gary Shorter, and Bill Canis.
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Housing Programs11
These programs are unlike the other TARP programs in that they do not result in valuable assets
or income in return for the TARP funding. All of these programs remain open under the contracts
previously agreed to and substantial funds remain to be disbursed:
• Home Affordable Modification Program (HAMP). HAMP pays mortgage
servicers if they modify mortgages to reduce the financial burden on
homeowners. A total of $29.9 billion in disbursements is possible under the
program, with $2.85 billion disbursed.
• Hardest Hit Fund (HHF). HHF provides aid to state housing finance agency
programs in states that have high unemployment rates or experienced the steepest
declines in home prices. Eighteen states and the District of Columbia are
participating in HHF. Of a possible $7.6 billion, $0.9 billion has been disbursed.
• FHA Short Refinance. This program promotes refinancing of mortgages on
“underwater” properties, those on which the mortgage balance is greater than the
equity in the house, if lenders agree to forgive some of the principal balance
owed on the mortgages. Of a possible $8.1 billion, $0.06 billion has been
disbursed.
Current Status and Future of TARP
As detailed above, until October 3, 2010, the Secretary had the authority to purchase or insure
nearly any financial asset under the programs in place on June 25, 2010. This authority has
expired. The legal contracts entered into under the previous authority, however, are still in force.
Thus, TARP funds may still flow out from the Treasury in the future. The programs with the
largest gap between legal commitments and the actual amount disbursed, and thus the largest
potential to grow in the future, are the housing support programs. Table 1 presents the figures
reported by the Treasury for obligated and actually disbursed TARP funds.
Table 1. Outlay of TARP Funds
($ in billions)
TARP Program
Obligated Amount
Actual Disbursements
Bank Support Programs
$250.46
$245.10
Credit Market Programs
$26.52
$18.42
AIG $67.84
$67.84
Auto Industry Financing Program
$79.69
$79.69
Housing Support
$45.60
$3.83
Totals $470.12
$414.88
Source: May 15, 2012 Daily TARP Update.
Note: Figures may not sum due to rounding.

11 For more information, see CRS Report R40210, Preserving Homeownership: Foreclosure Prevention Initiatives, by
Katie Jones.
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Although the total amount of assets held or insured under TARP was initially capped at $700
billion, and the program was widely reported as a “$700 billion bailout,”12 the actual net cost of
TARP was never likely to approach $700 billion. Unlike most government programs, where funds
are simply expended, TARP funds were generally used in ways that resulted in either the holding
of assets by the government or in some form of income accruing to the government. The
incoming receipts from TARP outlays have taken several forms, including
• funds from the sale of previously purchased assets,
• repayment of principal from loans,
• premium payments for insured assets,
• dividend and interest payments from assets and loans, and
proceeds from the sale of warrants issued by companies who sold assets to TARP.
Table 2 summarizes these incoming revenues from TARP. According to EESA, revenues and
proceeds from the sale of troubled assets, or from warrants and senior debt instruments, “shall be
paid into the general fund of the Treasury for reduction of the public debt.”13 This statutory
language does not specifically address the dividends paid on the preferred stock held by the
Treasury, which are the subject of H.R. 678, discussed below.
Table 2. Incoming TARP Funds
($ in billions)
Asset
Capital
Sales/Repayment
Dividends
Gains/Other
Warrant
TARP Program
of Loan Principal and Interest
Income
Proceeds
Total
Bank Support
$230.23 $15.06 $9.38 $9.16
$263.83
Programs
Credit Market
$3.70 $0.93
$0.08
$1.43
$44.43
Programs
AIG $31.87
$0.64
$0.29
$0
$32.81
Auto Industry
$35.18 $4.69
$0.73 $0 $40.60
Financing Program
Housing Support
Not applicable
Not applicable
Not applicable Not applicable Not applicable
Totals $300.98
$21.32
$10.48
$9.16
$341.94
Source: May 15, 2012 Daily TARP Update.
Notes: Totals may not sum due to rounding. Housing support programs results in no assets to be sold, nor
other income.
Table 3 summarizes TARP funds that have been disbursed but have not been repaid. Most of
these funds are classified by the Treasury as “outstanding.” This does not mean, however, that the

12 See, for example, “7 Questions about the $700 Billion Bailout,” Time, September 24, 2008, http://www.time.com/
time/politics/article/0,8599,1843941,00.html and “Administration Is Seeking $700 Billion for Wall Street,” New York
Times, September 20, 2008, p. A1.
13 P.L. 110-343, Section 106 (d).
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recipient of these funds is obligated to repay these funds, as is typically the case with, for
example, a loan that is outstanding from a bank to a borrower. Most of the outstanding TARP
funds are embodied in assets, such as common stock, that recipients are not obligated to repay,
instead, the Treasury is expected to sell these assets at a future date and hopefully recoup the
funds that were disbursed. The TARP funds that are classified as a recognized loss, or as written
off, are typically cases where either the asset sales were not sufficient to repay the initial TARP
disbursement or a TARP recipient has failed, and thus is unable repay the funds.
Table 3. TARP Funds Outstanding or Lost
($ in billions)
Recognized Loss/
TARP Program
Amount Outstanding
Written Off
Bank Support Programs
$12.14
$2.75
Credit Market Programs
$14.73
$0
AIG $30.44
$5.52
Auto Industry Financing
$37.14 $7.37
Program
Housing Support
Not applicable
Not applicable
Totals $94.44
$15.64
Source: May 15, 2012 Daily TARP Update.
Notes: Totals may not sum due to rounding. Housing support programs results in no assets to be sold, nor
other income.
The Costs of TARP
In arriving at an overall cost to the government of TARP, or any similar program, it is important
to account for the difference in time between initial outlay of funds and the receipt of any income.
Some TARP contracts run for five years or more, and the difference in value between a dollar in
2008 and 2013, for example, could be significant. To compare dollar values over time,
economists use present value calculations that reduce costs or income in the future relative to the
present by a discount rate. Present value calculations can be very sensitive to the rate used if the
amount of time involved is large. In preparing the budget cost estimates for TARP, the
Administration and the Congressional Budget Office (CBO) are directed by Section 123 of EESA
to adjust their estimates by current market borrowing rates, as opposed to the borrowing rate paid
by Treasury. Using market rates instead of government borrowing rates increases the net
calculated cost of these investments and is meant to better represent the true economic costs of
the programs. The cost estimates for TARP have fallen dramatically since the program was
started. For example, in March 2009, CBO estimated a $356 billion budgetary cost for TARP.
This number fell to $109 billion in March 2010, and the latest CBO estimate is for a total
budgetary cost of $32 billion.14

14 Congressional Budget Office, Director’s Blog, April 17, 2009, http://cbo.gov/publication/24884; Report on the
Troubled Asset Relief Program, March 17, 2010, and March 28, 2012, http://cbo.gov/sites/default/files/cbofiles/
ftpdocs/112xx/doc11227/03-17-tarp.pdf and http://cbo.gov/sites/default/files/cbofiles/attachments/03-28-
2012TARP.pdf.
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The various programs under TARP have very different estimated costs at the current time. In
general, the bank support programs are estimated to produce a gain for the government and the
credit market support programs are estimated to nearly break even. The losses in TARP are
primarily estimated to accrue from the support for AIG, the automakers, and housing. Table 4
summarizes recent detailed estimates of TARP’s cost from CBO and the Administration. The
largest difference between the Administration and CBO estimates are in the amounts expected to
be disbursed for the housing support programs.
Table 4. Detailed Cost/Gain Estimates for TARP
($ in billions; gain(+)/loss(-))
OMB
CBO
Treasury
TARP Program
(Data from Nov.
(Data from Feb. (Data from Feb.
2011)
2012)
2012)
Capital Purchase Program
$6.7
$17
$14.7
Targeted Investment Program
$3.6
$4.0
$8
Asset Guarantee Program
$3.6
(combined)
$3.7
Community Development Capital
-$0.2 $0 $0.2
Initiative
Term Asset-backed Lending Facility
-$0.4
$0
-$0.4
Public-Private Investment Program
$2.0
$0
$2.5
SBA 7(a) Securities
$0
$0
$0
AIG -$24
-$22
-$17.6
Auto Industry Financing Program
-$24.8
-$19
-$21.7
Housing Support
-$45.6
-$16
-$45.6
Totals -$78.2

-32
-$59.8
Sources: CBO, Report on the Troubled Asset Relief Program—March 2012; OMB, Analytical Perspectives, FY2013
President’s Budget, Table 4-7; February 2012; April 2012 TARP 105(a) Report.
Notes: Totals may not sum due to rounding. CBO figures market “$0” are rounded from between -$500 million
and +$500 million. AIG also received assistance through the Federal Reserve, which resulted in substantial asset
holdings and income. These cost estimates do not include gains resulting from this assistance.
The cost estimates of TARP are sensitive to financial markets and the state of the economy. The
ultimate cost of the program will depend largely on recouping value from the financial assets held
in TARP. The assets resulting from bank support programs, including warrants and both preferred
and common shares, have turned out to be relatively valuable, thus the estimates show an overall
gain from these programs as the increases in asset values outweigh any losses from defaults. In
the cases of AIG or the automakers, however, the estimates are that the assets held by the
government through TARP ultimately will not return enough to recoup the TARP funds put into
the companies.
The 112th Congress and TARP
The 112th Congress has shown a continued interest in TARP despite the expiration of the
purchasing authority in October 2010. The first hearing of the House Committee on Oversight
and Government Reform in the 112th Congress focused on TARP, with the Special Inspector
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General for TARP and Treasury’s Acting Assistant Secretary for Financial Stability as witnesses.
Legislation that would affect TARP includes the following:
• H.R. 189, introduced on January 5, 2011, by Representative Rob Woodall, would
repeal TARP in its entirety while allowing the Secretary to continue managing
TARP assets to maximize future returns.
• H.R. 430, introduced on January 25, 2011, by Representative Jim Jordan, would
terminate TARP’s HAMP program and specifically return unobligated funds to
the general fund.
• H.R. 678, introduced on February 11, 2011, by Representative Larry Kissell,
would amend EESA to specifically include TARP dividend payments in the list
of TARP proceeds that accrue to the general fund to pay down the national debt.
• H.R. 830, introduced on February 28, 2011, by Representative Robert Dold,
would amend EESA to terminate the FHA Refinance Program. It passed the
House on March 10, 2011, on a vote of 256-171.
• H.R. 839, introduced on February 28, 2011, by Representative Patrick McHenry,
would terminate TARP’s HAMP program. H.R. 839 was passed by the House on
March 29, 2011, on a vote of 252-170.
• H.R. 1315, introduced on April 1, 2011, by Representative Sean Duffy, is
focused on the Consumer Financial Protection Bureau. It was considered on the
House floor under a rule, H.Res. 358, that added the text of H.R. 830 as Title II
of H.R. 1315 prior to floor consideration. The amended bill passed the House on
July 21, 2011. on a vote of 241-173.
• H.R. 2434, introduced on July 7, 2011, by Representative Jo Ann Emerson,
would make appropriations for financial services and general government for
FY2012 and included language to terminate HAMP.
• H.R. 5652, introduced on May 9, 2012, by Representative Paul Ryan, would
provide for reconciliation pursuant to the concurrent resolution on the FY2013
budget and includes language to terminate HAMP.
• S. 162, introduced on January 25, 2011, by Senator Rand Paul, would repeal
TARP in its entirety in addition to several other government programs.
• S. 527, introduced on March 9, 2011, by Senator Jim DeMint, would terminate
TARP’s HAMP program.
Ownership of Private Companies
Government ownership of common equity in private companies was not a general goal of EESA
although it was expected that the government would be compensated for the assistance given to
companies under TARP. In some cases, this compensation for TARP assistance has resulted in
government holdings of common stock in amounts that typically would result in the government
having a controlling interest in these companies. The government, however, has generally
exercised little of the ownership control inherent in these large stakes. Common equity in
companies has typically been accepted in return for TARP assistance in order to strengthen the
companies’ capital positions going forward. Such equity also provides a potential financial upside
to the taxpayers if firms have a strong recovery, but has potential downside if firms do not recover
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strongly. Outstanding outlays, such as loans, that have been converted to common equity are no
longer directly owed by the company to the government.
In the case of Citigroup, which converted $25 billion of preferred shares into common shares, the
outcome for the government has been positive as the share price rose after the conversion,
resulting in approximately $6.85 billion in capital gains for taxpayers. Ownership of Chrysler
equity, however, turned out less positively for the government with the government realizing a
$1.33 billion loss after the sale to Fiat. The outcome for GM and AIG remain uncertain. Both
companies’ stock prices would have to rise substantially from current levels to result in an overall
gain from TARP. Sales of the common ownership stake in GMAC/Ally Financial have yet to
begin.
Table 5 summarizes the current status of government ownership in large financial institutions.
Table 5. Companies with Large Government Common Ownership Stakes
($ in billions)
Current
Amount
Preferred
Government Total TARP
Recouped
Losses
Total
Equity
Ownership
Assistance
by the
Written Off Outstanding
Outlays
Company
Share
Receiveda
Treasuryb
or Realized
Outlaysc
Outstandingd
AIG 61%e $67.8 $32.8 $5.5 $30.4 $0
GM 32.0%
$50.2
$24.0
$4.4
$22.5
$0
GMAC/Ally
73.8% $17.2 $5.4 $0 $14.6 $5.9
Financial
Chrysler 0% $10.9 $9.6 $2.9 $0 $0
Citigroupf 0% $45 cash;
$57.0 $0 $0 $0
$5 guarantee
Sources: March 15, 2012 TARP Daily Update, Various TARP 105(a) Reports, TARP Dividend and Interest
Reports, and U.S. Treasury press releases.
a. Some of these companies received commitments for funds greater than the reported amounts, or other
TARP assistance. These figures are actual dollars received by, or spent on behalf of, companies. In the case
of GM and Chrysler, this includes before, during, and after their bankruptcies, and also includes amounts
that went to support third party suppliers to GM and Chrysler.
b. Includes recoupment through bankruptcy proceeds, repayments, interest, dividends, and fees.
c. Includes outlays converted to common equity and thus not currently owed by the company to the
government.
d. Does not include loans to bankrupt entities.
e. Federal Reserve loans that predate TARP resulted in 79.8% ownership of AIG. An additional 12.3% resulted
from conversion of TARP preferred shares, including $1.6 billion in unpaid dividends. This conversion
substantial y diluted the initial 80% government stake. The government share has dropped from 92.1% due
to equity sales.
f.
$20 billion was repaid directly by Citigroup; $25 billion was converted into 34% of the equity in Citigroup,
which was subsequently sold for $31.85 billion.
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TARP and the Dodd-Frank Act15
Unlike EESA, which was a temporary response to the immediate financial crisis, the Dodd-Frank
Wall Street Reform and Consumer Protection Act (the Dodd-Frank Act) was a broad bill that
permanently changed many parts of the U.S. financial regulatory system. The act included a
relatively short amendment to EESA in Title XIII, entitled the Pay It Back Act. Section 1302 of
Dodd-Frank made three primary changes to EESA:
• reduced the overall authorization to purchase from nearly $700 billion16 to $475
billion;
• removed the implicit authority for the Secretary to reuse TARP funds when TARP
assets are sold;17 and
• limited the authorities under the act to programs or initiatives initiated prior to
June 25, 2010.
As of June 30, 2010, the Treasury reported that it planned to spend approximately $537 billion on
the various programs, with $491 billion committed under signed contracts and $385 billion
actually disbursed.18 The July 21, 2010, enactment of the $475 billion limit in the Dodd-Frank
Act thus required Treasury to reduce the amounts planned for TARP by more than $60 billion and
the legal commitments under TARP by more than $16 billion. CBO scored the TARP changes in
the Dodd-Frank Act as resulting in a decrease in direct spending of $11 billion in 2010.19 The
TARP changes reported by Treasury following the Dodd-Frank Act appear below in Table 6.
Under the broad authorities granted by EESA, Treasury could unilaterally change the planned
program allocations. Following the Dodd-Frank Act, this authority was limited to the difference
between the total of Treasury’s plans and the total of the signed contracts, approximately $21
billion as of July 31, 2010.

15 P.L. 111-203, see CRS Report R41350, The Dodd-Frank Wall Street Reform and Consumer Protection Act: Issues
and Summary, coordinated by Baird Webel.
16 The initial $700 billion had been reduced by $1.26 billion in P.L. 111-22.
17 Section 115(a)(3) of EESA limits the Secretary’s authority to purchase or guarantee assets to $700 billion
“outstanding at any one time.” While the interpretation was never subject to determination by the courts, this language
can be read to allow total purchase of assets beyond $700 billion if assets are sold before additional purchases are
made. Section 1302 of Dodd-Frank removed the phrase “outstanding at any one time.”
18 June 2010 TARP 105(a) Report.
19 Congressional Budget Office, CBO Estimate of the Net Deficit Effects of H.R. 4173, the Dodd-Frank Wall Street
Reform and Consumer Protection Act, June 29, 2010.
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Table 6. TARP Changes Following the Dodd-Frank Act
($ in billions)
Planned
Change
Planned
Legal
Allocation Prior
Following
Allocation
Commitments
TARP Program
to Dodd-Frank
Dodd-Frank
July 31, 2010
July 31, 2010
Capital Purchase Program
$204.9
$0.0
$204.9
$204.9
Targeted Investment Program
$40.0
$0.0
$40.0
$40
Asset Guarantee Program
$5.0
$0.0
$5.0
$5.0
AIG (Systemically Significant Failing
$69.8 $0.0
$69.8
$69.8
Institutions)
Term Asset-Backed Securities Program
$20.0
-$15.7
$4.3
$4.3
SBA Section 7(a)
$1.0
-$0.6
$0.4
Community Development Capital
$1.0a
$0.8 $0.0
$0.8
Initiative
Smal Business Lending Fund
$30
-$30.0b $0.0 $0.0
Public Private Investment Program
$30.4
-$7.9
$22.4
$22.4
Automotive Industry Financing
$84.8 -$3.1
$81.8
$81.8
Program
Housing/HAMP $48.7
-$3.1
$45.6
$30.25
Total $535.5
-60.5
$475.0
$454
Source: July 2010 TARP 105(a) Report.
Notes: Figures may not add due to rounding.
a. Treasury’s reporting did not separate the legal commitments for the two programs.
b. The Administration proposed creating a similar fund outside of TARP. See CRS Report R41385, Small
Business Legislation During the 111th Congress, by Robert Jay Dilger and Gary Guenther.
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Appendix. Details of TARP Programs
Bank Support Programs
Capital Purchase Program and Capital Assistance Program
Under the Capital Purchase Program (CPP), $125 billion in capital was immediately provided to
the nine largest banks (which became eight after a merger), with up to another $125 billion
reserved for smaller banks that might wish to apply for funds through their primary federal
banking regulator. This capital was provided in the form of preferred share purchases by TARP
under contracts between the Treasury and banks. The initial contracts with the largest banks
(ultimately, eight rather than nine) prevented these banks from exiting the program for three
years. The contracts included dividend payments to be made on the preferred shares outstanding
and the granting of warrants to the government. By the end of 2008, the CPP had 214
participating banks with approximately $172.5 billion in share purchases outstanding.
The Obama Administration and the 111th Congress implemented changes to the CPP. EESA was
amended, placing additional restrictions on participating banks in the existing CPP contracts, but
also allowing for early repayment and withdrawal from the program without financial penalty.20
With the advent of more stringent executive compensation restrictions for TARP recipients, many
banks began to repay, or attempt to repay, TARP funds. According to Treasury reports, by June
30, 2009, $70.1 billion of $203.2 billion CPP funds had been repaid; by December 31, 2009,
$121.9 billion of $204.9 billion had been repaid; and by December 31, 2010, $167.93 billion of
$204.9 billion had been repaid.
The new Administration also announced a review of the banking system, in which the largest
participants were subject to stress tests to assess the adequacy of their capital levels. Satisfactory
performance in the stress test was one regulatory requirement for large firms that wished to repay
TARP funds. Large firms that appear too fragile in the stress test would be required to raise
additional capital, and the firms would have the option of raising that capital privately or from the
government through a new Capital Assistance Program. No funding was provided through the
Capital Assistance Program, although GMAC, formerly General Motors’ financing arm, received
funding to meet stress test requirements through the Automotive Industry Financing Program
(discussed below). In addition, Citigroup, one of the initial eight large banks receiving TARP
funds, agreed with the government to convert its TARP preferred shares into common equity to
meet stress test requirements (see discussion of Citigroup below).
CPP profits stem from dividend payments and warrants received from recipients, and capital
gains in limited cases when shares are sold for more than face value (the standard CPP shares are
resold at face value). Losses stem from failure to repay in part or full. The ultimate profitability of
the program will be determined by the balance between the two.
Realized losses to date on the CPP preferred shares have been relatively small. As of May 2012,
Treasury reported $2.58 billion in write-offs and $0.17 billion in realized losses from the CPP.

20 Title VII of the American Recovery and Reinvestment Act of 2009 (P.L. 111-5,123 Stat. 115).
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The majority of this amount was due to the failure of CIT Group, which had $2.3 billion in TARP
shares outstanding when it failed.
An indication of how many preferred shares may currently be at risk of future losses might be
gleaned from the number of recipients who have missed dividend or interest payments. At the end
of April 2012, 237 CPP recipients had missed at least one payment with a total of $305.7 million
in missed dividend and interest payments, approximately 2.6% of the $11.6 billion in such
payments that had been received.21 This may be a misleading measure of troubled participants,
however, because there is no financial penalty for missing a dividend payment. Missed dividend
payments are simply rolled into the outstanding balance, although multiple missed dividend
payments do give Treasury the right to appoint members to the board of the institution. Thus,
healthy banks could be missing dividend payments to increase the amount of capital available to
support their business. In practice, two studies have claimed that dividend skippers tend to be
weaker institutions.22 Alternatively, some of the banks who cannot afford dividend payments now
may become more profitable as the economy recovers and ultimately repay TARP funds.
Another source of CPP profits are the proceeds from the warrants received from the companies.
Treasury has not generally exercised warrants to take common stock in CPP recipients. Following
the contracts initially agreed upon, Treasury has allowed institutions to purchase their warrants
directly upon repayment of preferred shares, as long as both sides can reach an acceptable price.
To reach an initial offering price, Treasury is using complex option pricing models to price the
warrants that require assumptions to be made about future prices and interest rates. Since these
pricing models are by their nature uncertain, some critics urge Treasury to auction the warrants on
the open market (allowing the issuing firm to bid as well) to ensure that Treasury receives a fair
price for them. Open auctions have been used, but only when an agreement between the Treasury
and the firms cannot be reached.
CPP also earns income from dividends with a rate of 5% for the first five years, and 9%
thereafter. (For S-Corp banks, the dividend rate is 7.7% for the first five years and 13.8%
thereafter.)
Table A-1 below summarizes the CPP, including current and peak asset holdings, losses or gains,
and conditions of the program.

21 April 2012 TARP Dividends and Interest Report.
22 Dobrina Georgieva, Linus Wilson “TARP’s Dividend Skippers,” Working Paper, Social Science Research Network,
August 6, 2010; Linus Wilson “TARP’s Deadbeat Banks,” Working Paper, Social Science Research Network, August
15, 2010.
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Table A-1. Capital Purchase Program
Federal Government
Terms and Conditions
Latest
Asset
Expected
Asset
Holdings
Total
Gains(+)/
Dividend
Holdings
at Peak
Income Losses(-)
Rate Warrants Expiration
Date
$11.56
$198.8
$26.11
+$15
5% for
15% of
Preferred Shares
billion
billion
billion
billion
first 5
preferred
outstanding until repaid.
(Mar 30,
(less
(Treasury);
years, 9%
shares (5%
No new
2009)
$2.75
+$17
thereaftera immediately
contracts/modifications
billion in
billion
exercised for
after Oct. 3, 2010.
losses)
(CBO)
privately- held
banks)
Source: May 15, 2012 Daily TARP Update; May 2012 TARP 105(a) Report; CBO, Report on the Troubled Asset
Relief Program—March 2012; Various TARP Transactions Reports.
Notes: Data includes preferred shares to Citigroup and Bank of America under CPP, which are also detailed in
sections on assistance to those companies below.
a. For S-Corp banks, the dividend rate is 7.7% for the first five years and 13.8% thereafter.
Community Development Capital Initiative
The Community Development Capital Initiative (CDCI) operated somewhat like the CPP in that
it purchased preferred shares from financial institutions, and in some cases institutions were
permitted to convert previous CPP preferred shares to CDCI preferred shares. The program was
specifically focused on institutions that serve low-income, underserved communities. Treasury
purchased preferred shares from institutions that qualified for the CDCI up to an amount equal to
5% of the institutions’ risk-weighted assets for banks and thrifts or 3.5% of total assets for credit
unions. These preferred shares pay an initial dividend rate of 2%, which will increase to 9% after
eight years. Unlike the CPP, no warrants in the financial institutions were included. Purchases
under the program were completed in September of 2010 with approximately $210 million new
shares purchased. In addition, approximately $360 million of shares were converted from CPP
shares.
Table A-2. Community Development Capital Initiative
Federal Government
Terms and Conditions
Current or
Funds
Expected
Interest/
TARP Funds
Disbursed at
TARP
Gains(+)/
Dividend
Expiration
Outstanding
Peak
Income
Losses(-)
Rate Warrants Date
$570 million
$570 million
$20 million
-$170 million
2% (9% after
none No
new
(Treasury)
8 years)
purchases
after Oct.
2010.
Source: March 15 2012 TARP Daily Update; April 2012 TARP 105(a) Report.
Note: Of the disbursed funds, $210 million are new shares and $360 million are shares transferred from CPP.
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Targeted Investment Program and Asset Guarantee Program
The Targeted Investment Program (TIP) and the Asset Guarantee Program (AGP) were only used
as part of a package to aid two large banks, Citigroup and Bank of America, which were also
large recipients of CPP funds. The combined assistance for these banks are addressed below,
rather than treat the TIP and AGP as separate programs.
Citigroup (CPP/TIP/AGP)
On November, 23, 2008, the Treasury, Federal Reserve, and FDIC announced a joint intervention
in Citigroup, which had previously been a recipient of $25 billion in TARP Capital Purchase
Program funding, to “[support] financial stability.”23 This exceptional intervention consisted of an
additional $20 billion purchase of preferred shares through the TARP Targeted Investment
Program and a government guarantee for a pool of $306 billion in Citigroup assets (reduced to
$301 billion when the guarantee was finalized on January 16, 2009) through the TARP Asset
Guarantee Program, FDIC, and Federal Reserve. Citigroup paid the federal government a fee for
the guarantee in the form of $4 billion in trust preferred securities paying an 8% dividend rate.
The Treasury also received warrants in both of these transactions.
On February 27, 2009, Citigroup and Treasury officials agreed that the Treasury Department
would convert $25 billion of its TARP CPP investment in Citigroup preferred stock into Citigroup
common stock and cancel the warrants taken by Treasury under the CPP. After this conversion,
the U.S. government owned approximately 33.6% (7.7 million shares) of Citigroup common
stock. The conversion of preferred shares to common stock worsened the government’s priority
on Citigroup’s assets in the event of liquidation, but improved certain capital ratios for the
company and relieved it of the obligation to pay dividends to the government, as it had previously
with the preferred shares. The conversion exposed the government to more potential risk as well
as to potential upside reward. The government’s preferred shares could only be redeemed at par
value, regardless of the performance of the company, while the government’s holdings of
common stock rose and fell in value based on the market valuation of the company.
In December 2009, Citigroup and the Treasury reached an agreement to repay the outstanding
$20 billion in preferred securities and to cancel the asset guarantee. As part of this agreement,
Treasury agreed to cancel $1.8 billion worth of the $4 billion in trust preferred securities
originally paid as a fee for the guarantee. Citigroup repurchased the outstanding AGP trust
preferred securities on September 30, 2009. While the asset guarantee was in place, no losses
were claimed and no federal funds were paid out. Warrants received under the TIP and AGP, with
a strike price of $10.61, are still held by the Treasury.
In April 2010, the Treasury began selling its common share holdings in Citigroup. The shares
were sold in tranches through 2010, with a total of 4.1 million shares being sold by the end of
September 2010. Treasury announced the completion of the sales early in December 2010. The
average sales price for the Treasury shares was $4.14 per share compared with an initial
conversion price of $3.25 per share. The gain from the common stock sales was approximately
$6.9 billion, along with approximately $2.2 billion from the sales of the remaining trust preferred
securities granted as a fee from the AGP, $2.9 billion in interest and dividends, and $54 million

23 U.S. Treasury, “Joint Statement by Treasury, Federal Reserve, and FDIC on Citigroup,” press release hp-1287,
November 23, 2008.
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from the sale of warrants for a total nominal gain (i.e., not discounted for market risk) from the
Citigroup intervention of $12.1 billion.24
Table A-3 below summarizes the assistance for Citigroup through the CPP, TIP, and AGP,
including current and peak asset holdings, losses or gains, and conditions of the program.
Table A-3. Citigroup Support (CPP/TIP/AGP)
Federal Government
Terms and Conditions
Current
Asset
Realized
Subsequent
Asset
Holdings/
Capital
Conversion/
Holdings/
Guarantees
Total
Gains(+)/
Warrants Amendment
Expiration
Program
Guarantees
at Peak
Income
Losses(-) Dividend/Fee Issued

Date
Capital
$0
$25 billion
$0.9 billion
+$6.9
preferred: 5%
210 million Converted
None,
Purchase
(dividends);
billion
dividend for
with a
preferred
shares
Program
$.05 billion
first 5 years,
strike
shares to
outstanding
(warrants)
9% thereafter;
price of
common
until sold or
common: none $17.85 per stock,
repurchased.
share
subsequently
sold for $31.9
billion.
Targeted
$0
$20 billion
$1.6 billion
$0 8%
dividend 188,5 Converted
None,
Investment

trust
(dividends);
million
preferred
shares or
Program
preferred
$0.19
with a
shares to
securities
securities
billion
strike
trust
outstanding
(until Dec.
(warrants)
price of
preferred
until sold or
2009)

$10.61
securities.
repurchased.
Asset
$0
$301 billion
$0.44
$2.2
following
66,5
$1.8 billion
Nov. 2018
Guarantee

(up to
billion
billion
termination,
million
canceled upon (residential
Program
$244.8
(dividends);
$2.2 billion in
with a
termination of assets)/Nov.
billion of
$0.07
trust preferred strike
Asset
2013 (non-
losses borne
billion
securities with
price of
Guarantee.
residential
by Fed,
(warrants);
8% dividend
$10.61 per
assets)
Treasury and $50 million
share
FDIC) (until
termination
Dec. 2009)
fee to Fed
Sources: May 15 2012 Daily TARP Update; October 2011 TARP 105(a) Report; October 2011 TARP Dividends
and Interest Report; SIGTARP, Extraordinary Financial Assistance Provided to Citigroup, Inc, January 13, 2011; U.S.
Treasury press release, December 10, 2010.
Note: Assistance to Citigroup through CPP is also included in the CPP Table.
Bank of America (CPP/TIP/AGP)
On January 16, 2009, the Treasury, the Federal Reserve, and the FDIC announced a joint
intervention in Bank of America, which had previously been a recipient of $25 billion in TARP
Capital Purchase Program funds,25 “as part of its commitment to support financial market

24 U.S. Treasury, “Taxpayers Receive $10.5 Billion in Proceeds Today From Final Sale of Treasury Department
Citigroup Common Stock,” press release, December 10, 2010, http://www.financialstability.gov/latest/
pr_12102010.html, and TARP Transactions Report, January 26, 2011.
25 As part of this transaction, the government received warrants for 121,792,790 shares with a strike price of $30.79.
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stability.”26 This exceptional assistance included the purchase of an additional $20 billion of Bank
of America preferred shares through the TARP Targeted Investment Program27 and a joint
guarantee on a pool of up to $118 billion of Bank of America’s assets (largely acquired through
its merger with Merrill Lynch) through the TARP Asset Guarantee Program, the FDIC, and the
Federal Reserve. Bank of America was to pay the federal government a fee for the guarantee in
the form of $4 billion in preferred stock with an 8% dividend rate and warrants to purchase
common stock worth $2.4 billion at the time of the agreement.
While the asset guarantee was announced in January 2009, a final agreement was never signed.
On September 21, 2009, Bank of America announced that it had negotiated a $425 million
termination fee that allowed it to withdraw from the AGP, canceling the warrants and preferred
shares issued for the program.
On December 9, 2009, Treasury announced that Bank of America had repurchased the $45 billion
in preferred stock previously purchased under TARP. The warrants issued under the CPP and the
TIP were sold at auction by the government in March 2010 for approximately $1.6 billion. No
government assistance to Bank of America remains outstanding.
Table A-4 below summarizes the support for Bank of America through the CPP, TIP, and AGP,
including current and peak asset holdings, losses or gains, and conditions of the support.
Table A-4. Bank of America Support (CPP/TIP/AGP)
Federal Government
Terms and Conditions
Current
Asset
Realized
Asset
Holdings/
Capital
Holdings/
Guarantees
Total
Gains(+)/
Dividend
Expiration
Program
Guarantees
at Peak
Income
Losses(-)
Rate/Fee Warrants
Date
Capital
$0 $25
billion
$1.3 billion
$0 5%
for 121,792,790 None,
Purchase
(until Dec.
(dividends);
first 5
warrants
shares
Program
2009)a
$0.3 billion
years, 9%
sold for
outstanding
(warrants)
thereafter
$0.3 billion.
until
repurchased.
Targeted
$0 $20
billion
$1.4 billion
$0 8%
150,375,940
None,
Investment
(until Dec.
(dividends):
warrants
shares
Program
2009)
$1.25
sold for
outstanding
billion
$1.25
until
(warrants)
billion
repurchased.
Asset
$0 $118
billion
$425
n/a n/a n/a
Jan.
2019
Guarantee
(up to $97.2
million
(residential
Program
billion of
termination
assets)/Jan.
losses borne
fee to
2014 (non-
by Fed,
government
residential
Treasury and ($57 million
assets).
FDIC) (never termination
finalized)
fee to Fed)

26 U.S. Treasury, “Treasury, Federal Reserve, and the FDIC Provide Assistance to Bank of America,” press release
hp1356, January 16, 2009.
27 As part of this transaction, the government received warrants for 150,375,940 shares with a strike price of $13.30.
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Source: May 15 2012 Daily TARP Update; October 2011 TARP 105(a) Report; October 2011 TARP Dividends
and Interest Report; Congressional Budget Office, Budget and Economic Outlook, January 2010; SIGTARP, Quarterly
Report to Congress, January 30, 2010; OMB, Analytical Perspectives, FY2011 President’s Budget, Table 4-7; February
2010.
Notes: Assistance to Bank of America through CPP is also included in the CPP Table.
a. Of the $25 billion of preferred shares, $10 billion were originally issued by Merrill Lynch, which
subsequently merged with Bank of America.
Credit Market Programs
Public Private Investment Program
On March 23, 2009, Treasury announced the Public Private Investment Program (PPIP). PPIP as
envisioned consisted of two asset purchase programs designed to leverage private funds with
government funds to remove troubled assets from bank balance sheets. Perhaps closer to the
original conception of TARP than other TARP programs, PPIP dedicated TARP resources as
equity to (1) acquire troubled loans in a fund partially guaranteed by the FDIC and (2) acquire
troubled securities in a fund designed to be used with loans from the Federal Reserve’s TALF
program or TARP. Both funds would match TARP money with private investment, and profits or
losses would be shared between the government and the private investors. Unlike the original
conception of TARP, private investors would choose the assets to purchase and manage the funds
and the day-to-day disposition of assets. Treasury originally envisioned assets purchases through
PPIP would be as high as $1 trillion (using as much as $200 billion in TARP funds), but
ultimately Treasury reports only $21.86 billion of TARP funds obligated to the program with
$17.96 billion disbursed as of May 15, 2012.
Legacy Loan Program
A legacy loan is a problem loan that is already on a bank’s balance sheet, as opposed to a
potential new loan or refinance. The Legacy Loan Program was intended to reduce uncertainty
about bank balance sheets and draw private capital to the financial services sector by providing
FDIC debt guarantees and Treasury equity co-investment to fund private-public entities
purchasing problem loans from banks. The program, however, was not implemented beyond a
single pilot legacy loan sale reported by the FDIC on September 30, 2009. In this pilot sale, the
FDIC auctioned a portfolio of residential mortgages with unpaid principal of $1.3 billion from a
bank that the FDIC had taken into receivership. Residential Credit Solutions placed a winning bid
of $64 million to receive a 50% stake in this pool, and financed the purchase with $728 million of
debt guaranteed by the FDIC.28
Legacy Securities Program
The larger part of the PPIP is designed to deal with existing mortgage-related securities on bank
balance sheets. There are several basic steps to the Legacy Securities Program (S-PPIP). Investors

28 Federal Deposit Insurance Corporation, “Legacy Loans Program – Winning Bidder Announced in Pilot Sale,” press
release, September 16, 2009, http://www.fdic.gov/news/news/press/2009/pr09172.html. FDIC reports seven other
public-private partnership transactions since 2008, but classifies only the September 2009 transaction as a PPIP
transaction.
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identify non-agency MBS that were originally rated AAA. Agency MBS refer to loans issued by
GSEs, such as Fannie Mae and Freddie Mac, and non-agency MBS refers to mortgage-related
securities issued by private financial institutions, such as investment banks. Private fund
managers apply to Treasury to pre-qualify to raise funds to participate in the program. Approved
fund managers that raise private equity capital receive matching Treasury capital and an
additional loan to the fund that matches the private capital (thus far, the private investor that
raises $100 has a total of $300 available). In addition to this basic transaction, Treasury reserves
discretion to allow up to another matching loan so that, in some cases, raising $100 makes a total
of $400 available.
Nine funds were pre-qualified by the Treasury in June 2009. In early January 2010, however, one
of the funds reached a liquidation agreement with Treasury and was wound down.29 As of
September 30, 2010, PPIP funds had raised $7.4 billion of private equity capital, to be matched
by $22.1 billion in TARP equity and debt capital.30
Table A-5. Public Private Investment Program
Federal Government
Terms and Conditions
Funds
Current or
Funds
Disbursed/
Expected
Interest/
Disbursed/
Guaranteed
Total
Gains(+)/
Dividend
Expiration
Program Guaranteed
at Peak
Income
Losses(-)a
Rate
Warrants
Date
Legacy
$16.3 billion
$16.3 billion
$1.2 billion
LIBOR plus
yes (amount
10 years from
Securities
“applicable
unspecified)
creation of
margin”
fund.
$0 billion
Legacy
$728 million
$728 million
n/a
(CBO);
no contracts
yes (amount
No new
Loans
$2.5 billion
unspecified)
contracts/
(Treasury)
modifications
after Oct. 3,
2010.
Sources: May 15 2012 Daily TARP Update; April 2012 TARP 105(a) Report; U.S. Treasury, Legacy Securities
Public-Private Investment Program Update, April 19, 2012; Congressional Oversight Panel September 2009
Oversight Report; SIGTARP, Quarterly Report to Congress, January 30, 2010; CBO, Report on the Troubled Asset
Relief Program—March 2012; Data on Structured Loan Sales from FDIC.
Note: For legacy securities, funds disbursed to date (not committed). For legacy loans, loans guaranteed.
a. Expected losses for Legacy Securities and Legacy Loans combined.
Term Asset-Backed Securities Loan Facility
The Term Asset-Backed Securities Loan Facility (TALF) is a Fed program to assist the asset-
backed security market, with TARP acting as a backstop in case of any losses. TALF income

29 December 2009 TARP 105(a) Report, pp. 15, 30-32.
30 U.S. Treasury, Legacy Securities Public-Private Investment Program Update, April 19, 2012, p. 3, available at
http://www.treasury.gov/initiatives/financial-stability/programs/Credit%20Market%20Programs/ppip/Documents/
PPIP%20Report%20-%20Q1-12.pdf.
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accrues to the Fed with possible losses and some expenses accruing to the Treasury. As of May
15, 2012, Treasury reported $0.1 billion in disbursements for TALF.31
Table A-6. Term Asset-Backed Securities Loan Facility
Federal Government
Terms and Conditions
Funds
Current or
Funds
Disbursed/
Expected
Interest/
Disbursed/
Guaranteed
Total
Gains(+)/
Dividend
Expiration
Program Guaranteed
at Peak
Income
Losses(-)a
Rate Warrants Date
TALF
$100 million
$100 million
$0
$430 million
n/a none
No
new
(Treasury)
purchases
after June 30,
2010.
Sources: May 15 2012 Daily TARP Update; April 2012 TARP 105(a) Report; Federal Reserve Bank of New
York.
Section 7(a) Securities Purchase Program
This program supports the Small Business Administration’s (SBA) Section 7(a) loan program
through purchasing pooled SBA guaranteed securities backed by private loans to small
businesses.32 Beginning in March 2010, Treasury purchased a total of $368 million in securities
guaranteed by the SBA. Purchases ended in October 2010 with the expiration of the TARP
authority.
Table A-7. Public Private Investment Program
Federal Government
Terms and Conditions
Funds
Current or
Funds
Disbursed/
Expected
Interest/
Disbursed/
Guaranteed
Total
Gains(+)/
Dividend
Expiration
Program Guaranteed
at Peak
Income
Losses(-)a
Rate
Warrants
Date
Section
$0
$368 million
$9 million
$0
floating none
No
new
7(a)
(Treasury)
purchases
Securities
after Oct.
2010.
Sources: May 15 2012 Daily TARP Update; April 2012 TARP 105(a) Report; SIG TARP Quarterly Report to
Congress, April 25, 2012.

31 For additional information on TALF, see CRS Report RL34427, Financial Turmoil: Federal Reserve Policy
Responses, by Marc Labonte.
32 For additional information on this program, see CRS Report R41146, Small Business Administration 7(a) Loan
Guaranty Program, by Robert Jay Dilger.
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U.S. Automaker Assistance33
In addition to financial firms, non-financial firms have also sought support under TARP, most
notably U.S. automobile manufacturers.34 While EESA specifically authorized the Secretary of
the Treasury to purchase troubled assets from “financial firms,” the legislative definition of this
term did not mention manufacturing companies.35 After specific legislation for the automakers
failed to clear Congress,36 the Bush Administration turned to TARP for funding.
On December 19, 2008, the Bush Administration announced it was providing support through
TARP to General Motors and Chrysler under the Automotive Industry Financing Program (AIFP).
The initial package included up to $13.4 billion in a secured loan to GM and $4 billion in a
secured loan to Chrysler. In addition, $884 million was lent to GM for its participation in a rights
offering by GMAC as GM’s former financing arm was becoming a bank holding company. On
December 29, 2008, the Treasury announced that GMAC also was to receive a $5 billion capital
injection through preferred share purchases.
After January 21, 2009, the Obama Administration continued assistance for the automakers,
including support for the automaker warranties under the AIFP (so that consumers would not be
discouraged from purchasing cars during the restructuring), and for third-party suppliers to the
automakers (the Automotive Supplier Support Program, ASSP). Additional loans for GM and
Chrysler were made before and during the two companies’ bankruptcies, and GMAC received
additional capital through preferred share purchases as well. At the end of 2009, GM had received
approximately $49.5 billion in direct loans; Chrysler had outstanding commitments for $12.9
billion in loans and drawn approximately $10.9 billion; GMAC had received $17.2 billion in
preferred equity purchases; and Chrysler Financial had received $1.5 billion in loans. Some of
this assistance is still owed by the companies, some has been repaid, and some has been
converted into common equity in the company receiving assistance.
As of May 15, 2012, TARP support for the auto industry totaled approximately $79.7 billion
disbursed, with $35.18 billion repaid and $5.42 billion in income. Approximately $7.4 billion has
been written off or taken as a realized loss and $37.14 billion of assistance is outstanding. The
assistance outstanding takes the form of (1) government ownership of 32.04% of post-bankruptcy
GM; and (2) government ownership of 73.8% government ownership of GMAC (which has
changed its name to Ally Financial), with $5.9 billion in preferred equity outstanding. In addition,
$849 million in loans to Old (pre-bankruptcy) GM and $1.8 billion in loans to Old (pre-

33 This section was prepared with the assistance of Bill Canis, CRS specialist in Industrial Organization and Business.
For a comprehensive analysis of federal financial assistance to U.S. automakers, see CRS Report R40003, U.S. Motor
Vehicle Industry: Federal Financial Assistance and Restructuring, coordinated by Bill Canis. Statistics in the section
are taken from the December TARP 105(a) Report, from Congressional Oversight Panel, September Oversight Report:
The Use of TARP Funds in the Support and Reorganization of the Domestic Automotive Industry, September 9, 2009,
available at http://cop.senate.gov/documents/cop-090909-report.pdf and from various contracts posted by the U.S.
Treasury at http://www.treasury.gov/initiatives/financial-stability/investment-programs/aifp/Pages/autoprogram.aspx.
34 See, for example, Statement by Secretary of the Treasury Henry Paulson in U.S. Congress, House Committee on
Financial Services, Oversight of Implementation of the Emergency Economic Stabilization Act of 2008 and of
Government Lending and Insurance Facilities: Impact on the Economy and Credit Availability, 110th Cong., 2nd sess.,
November 18, 2008.
35 P.L. 110-343, Division A, Section 3.
36 In December 2008, the House of Representatives passed H.R. 7321, authorizing the use of certain Department of
Energy funds as bridge loans to GM and Chrysler. Passed by a vote of 237-170, the bill was not acted upon in the
Senate.
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bankruptcy) Chrysler have not been repaid and neither amount appears likely to be repaid. The
loan to Chrysler Financial was completely repaid with interest.
For the outstanding assistance, the extent to which the government recoups its TARP funds will
depend substantially on how much is eventually received when the government sells its equity
interests. The government has already sold a portion of its stake in New GM at a price of $33 per
share. The remaining shares would have to reach approximately $54 for the government to be
able to recoup the nominal value of its $50.2 billion assistance for the company.37 Treasury
estimates of assistance to the auto industry made with February 2012 data are for a lifetime cost
of $21.7 billion, whereas CBO estimated the subsidy cost to be $19 billion in March 2012.
Table A-8 below summarizes the support for the automakers, including current and peak asset
holdings or loan amounts, losses or gains, and conditions of the assistance.
Table A-8. Government Support for the Auto Industry
Federal Government
Terms and Conditions
Current or
Latest
Total
Expected
Dividend/
Beneficiary/
Balance
Assistance
Total
Gain(+)/
Interest
Subsequent Expiration
Program
Owed
at Peak
Income
Loss(-)
Rate
Conversion
Date
General
$0 (new GM); $50.2 billion
$0.86 billion
-$4.4 billion
LIBOR + 5% Loan
January
Motors
$849 million
combined
(actual capital
converted
2015 ( new
(old GM);
loans (not
loss due to
into 60.8 %
GM loan);
$22.5 billion
including
stock sale)
of common
December
outstanding,
$884 million
equity and
2011 (old
but not owed
loan for
preferred
GM loan)
by GM.
GMAC rights
stock; 27.5%
offering)
of common
equity sold
for $13.5
billion.
GMAC/Ally
$5.9 billion
$17.2 billion
$2.86 billion
Not Reported
9%
Loan and
No
Financial
preferred
preferred
preferred
expiration
equity; $8.7
equity and
shares
billion
$884 million
converted
outstanding
loan through
into 73.8% of
but not owed
GM.
common
by Ally.
equity
Chrysler $0
$10.9
billion
$1.6 billion
-$2.9 billion
LIBOR +
9.9% of
June 2017
loan;
(actual loss)
7.9% ;
common
(new
($2.1 billion
LIBOR +
equity;
Chrysler
never drawn)
3%;
subsequently
loan);
LIBOR + 5%
reduced to
January
8.6%
2012 (old
Chrysler
loan)
Chrysler
$0 $1.5
billion
$7 million
n/a

None
January
Financial
loan
2014

37 See CRS Report R41978, The Role of TARP Assistance in the Restructuring of General Motors, by Bill Canis and
Baird Webel.
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Sources: May 15, 2012 Daily TARP Update; April 2012 TARP 105(a) Report; March 2012 TARP Dividends and
Interest Report; Congressional Oversight Panel, September 2009 Oversight Report; CBO, Report on the Troubled
Asset Relief Program—March 2012; SIGTARP, Quarterly Report to Congress, September 30, 2010.
Note: LIBOR = London Interbank Offered Rate.
American International Group
In the fall of 2008, American International Group (AIG) was a federally chartered thrift holding
company regulated by the Office of Thrift Supervision (OTS) at the holding company level, with
a broad range of businesses, primarily insurance subsidiaries, which are state-chartered and state-
regulated.38 Facing losses on various operations, AIG experienced a significant decline in its stock
price and downgrades from the major credit rating agencies. These downgrades led to immediate
demands for significant amounts of collateral (approximately $14 billion to $15 billion in
collateral payments, according to contemporary press reports).39 As financial demands on the
company mounted, bankruptcy appeared a possibility, as had occurred with Lehman Brothers on
September 15, 2008. Many feared that AIG was “too big to fail” due to the potential for
widespread disruption to financial markets resulting from such a failure.
On September 16, 2008 (prior to the existence of TARP), the Fed announced that it was taking
action to support AIG in the form of a secured two-year line of credit with a value of up to $85
billion and a high interest rate. In addition, the government received warrants to purchase up to
79.9% of the equity in AIG. On October 8, 2008, the Fed announced that it would lend AIG up to
an additional $37.8 billion against securities held by its insurance subsidiaries. In October 2008,
AIG also announced that it had applied to the Fed’s general Commercial Paper Funding Facility
(CPFF) and was approved to borrow up to $20.9 billion at the facility’s standard terms.
In early November 2008 (following the creation of TARP), the financial support for AIG was
restructured. The restructured financial support consisted of (1) reducing the size of the Fed loan
to up to $60 billion, with the term lengthened to five years and the interest rate reduced by 5.5%;
(2) purchasing of $40 billion in preferred shares through TARP; and (3) replacing the $37.8
billion loan, with up to $52.5 billion total in asset purchases by the Fed through two Limited
Liability Corporations (LLCs) known as Maiden Lane II and Maiden Lane III. The 79.9% equity
position of the government in AIG remained essentially unchanged after the restructuring of the
intervention.
In March 2009, the assistance was restructured further through (1) a partial payback of the Fed
loan through a swap of debt for equity in two AIG subsidiaries worth approximately $25 billion,
reducing the maximum to $35 billion; and (2) commitments for additional future TARP purchases
of up to $29.8 billion in preferred shares at AIG’s discretion, and the conversion of existing shares
into shares with optional dividend payments.40 The Maiden Lane LLCs continued operating under

38 For a comprehensive analysis of federal assistance to AIG, see CRS Report R40438, Federal Government Assistance
for American International Group (AIG), by Baird Webel.
39 See, for example, “U.S. to Take Over AIG in $85 Billion Bailout; Central Banks Inject Cash as Credit Dries Up,”
Wall Street Journal, September 17, 2008, pp. A1-A6.
40 AIG issued $1.6 billion of additional preferred shares to the government in recognition of accrued, unpaid dividends
on the initial $40 billion in assistance. AIG has not paid dividends since the conversion to optional dividends, with a
total of $6.7 billion in missed dividend payments as of September 30, 2010, according to the Special Inspector General
for TARP, http://www.sigtarp.gov/reports/congress/2010/October2010_Quarterly_Report_to_Congress.pdf. These
missed payments gave Treasury the right to appoint two directors to AIG’s board.
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the previous terms, with the actual loans extended to the LLCs totaling $43.9 billion at their peak
of the possible $52.5 billion. AIG’s access to the CPFF had been reduced to $15.9 billion in
January 2009, due to a ratings agency downgrade. AIG continued to access this facility until it
expired in February 2010.
In September 2010, AIG and the government announced another restructuring of the
government’s assistance. This restructuring closed on January 14, 2011. The expressed goal was
to simplify the government’s interest in AIG and provide for a path for the divestment of the
government’s stake in AIG. The essence of the plan called for (1) ending the Fed’s involvement
with AIG through loan repayment and transfer of the Fed’s equity interests to the Treasury and (2)
converting the government’s $49.1 billion in existing preferred shares into common shares, which
can then be sold to the public over time. The specific steps involved several interlocking
transactions, including the initial public offering (IPO) of a large AIG subsidiary, the sale of
several other AIG subsidiaries, and the use of up to approximately $20 billion in TARP funds to
transfer equity interests from the Fed to the Treasury. Once these transactions closed, the Treasury
held 92% of AIG’s common equity (1.66 billion shares) and equity interests in AIG’s subsidiaries
worth approximately $20.3 billion.
Since January 2011, successive sales of both AIG common equity and the AIG subsidiary equity
has reduced the outstanding assistance to AIG. The current government interests resulting from
the AIG assistance include the following:
• Approximately 61% (1.06 billion shares) of AIG’s common equity are held by
the Treasury.
• The Fed continues to hold an interest in the Maiden Lane III LLC created in
November 2008. As of May 10, 2012, the Fed reports $8.7 billion in loans and
accrued interest are outstanding with sufficient equity holdings to provide an
additional $4 billion in capital gains.
The government’s ability to recoup its funds from the AIG rescue will depend mainly on how
much it eventually receives when it sells its equity interests. The Table A-2 below summarizes
the support received by AIG from both TARP and the Fed, including current and peak asset
holdings, losses or gains, and conditions of the support.
Table A-9. AIG Support
Federal Government
Terms and Conditions
Current
or
Outstanding
Expected Dividend/
Warrants/
Outstanding
Amount
Total
Gain(+)
Interest
Equity
Subsequent Expiration
Program
Amount
at Peak
Income
/Loss(-)
Rate
Interests
Conversion
Date
TARP
$30.44 billion
$67.84 billion
$0.93
-$22
10%
warrants
$49.1 billiona
Mar. 2014
Systemically
billion in
billion
(dividends
for 2% of
converted to
Significant
dividends (CBO);
paid at
common
AIG
Failing
paid and
-$17.6
AIG’s
shares
common
Institutions
capital
billion
discretion)
equity; $20.3
gains.
(Treasury)
billion
converted
subsidiary
equity
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Federal Government
Terms and Conditions
Current
or
Outstanding
Expected Dividend/
Warrants/
Outstanding
Amount
Total
Gain(+)
Interest
Equity
Subsequent Expiration
Program
Amount
at Peak
Income
/Loss(-)
Rate
Interests
Conversion
Date
Fed Loan to
$0 $87.3
billion
$8.2
$16.4
3 month
warrants
Reduced
Sept. 2013
AIG
loan
billion in
billion
LIBOR+3% for 79.9%
balance by
(Oct. 2008)
interest
from
(later
$25 billion in
and
equity
reduced to
exchange for
dividends holdings
77.9%) of
equity in life
(Treasury)
common
insurance
shares
subsidiaries
Fed Loan
$8.0 billion in
$43.9 billion
$2.9
$0
LIBOR+1% none
n/a None;
for
loans to
loans to
billion
($4 billion
securities
Troubled
purchase
purchase
(plus
unrealized
held until
Asset
assets
assets
$0.7
capital
sold or
Purchases
(Dec. 2008)
billion
gain)
until
unpaid
maturity.
accrued
interest)
Fed
$0 $16.2
billion
Not
n/a overnight none n/a
Feb.
2010
Commercial
(Jan. 2009)
reported
index
Paper
swap (OIS)
Funding
rate+1%;
Facility
OIS+3%
Sources: May 15 2012 TARP Daily Update; April 2012 TARP 105(a) Report; Federal Reserve, statistical release
H.4.1, Factors Affecting Reserve Balances of Depository Institutions and Condition Statement of Federal Reserve Banks,
November 25, 2011; Federal Reserve Bank of New York, “Actions Related to AIG,” http://www.newyorkfed.org/
aboutthefed/aig/index.html; CBO, Report on the Troubled Asset Relief Program—March 2012; SIGTARP, Quarterly
Report to Congress, September 30, 2010; U.S. Treasury Office of Financial Stability, Agency Financial Report Fiscal
Year 2010, November 2010; AIG website, “What AIG Owes the U.S. Government,” September 30, 2010; CRS
Calculations with Fed data.
Notes: LIBOR = London Interbank Offered Rate.
a. Includes $1.6 billion in additional preferred shares issued in return for previous conversion of shares paying
a mandatory dividend to shares paying an optional dividend.
TARP Housing Assistance Programs41
One criticism leveled in TARP’s early stages was its focus on assisting financial institutions, thus
providing only indirect assistance to individual homeowners facing foreclosure. Sections 103,
109, and 110 of the EESA specifically embody congressional intent that homeowners be aided
under TARP. Treasury ultimately created several programs addressing this criticism. Unlike other
TARP programs that have resulted in asset purchases that may eventually return some funds to
the government, the housing assistance programs have no mechanism for returning funds. Some
$50 billion of TARP funding was initially planned for housing assistance effort. Expected outlays
under these programs have been counted as 100% spending with no expected financial return to

41 For additional detail on these and other housing assistance efforts, see CRS Report R40210, Preserving
Homeownership: Foreclosure Prevention Initiatives, by Katie Jones; portions of this section are based on this report.
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the government. The amount of spending on these programs, however, has been relatively low,
and the programs have been further criticized as ineffective at helping homeowners.42
Home Affordable Modification Program
In March 2009, the TARP Home Affordable Modification Program (HAMP) was announced.43
Through HAMP, the government provides financial incentives to participating mortgage servicers
that provide loan modifications to eligible troubled borrowers to reduce the borrowers’ monthly
mortgage payments to no more than 31% of their monthly income. Servicers receive an upfront
incentive payment for each successful permanent loan modification and a “pay-for-success”
payment for up to three years if the borrower remains current after the modification. The
borrower can also receive a “pay-for-success” incentive payment (in the form of principal
reduction) for up to five years if he or she remains current after the modification is finalized.
Investors receive the payment cost-share incentive (that is, the government’s payment of half the
cost of reducing the monthly mortgage payment from 38% to 31% of monthly income), and can
receive incentive payments for loans modified before a borrower becomes delinquent. Mortgage
modifications can be made under HAMP until December 31, 2013.
The Administration originally estimated that HAMP would cost $75 billion. Of this amount, $50
billion was to come from TARP funds and $25 billion was to come from Fannie Mae and Freddie
Mac for the costs of modifying mortgages that those entities owned or guaranteed.44 Treasury has
since revised its estimate of the amount of TARP funds that will be used for HAMP, and it has
reduced the $50 billion originally allocated to HAMP to $45.6 billion and used some of those
funds to help pay for other foreclosure-related programs. A total of $29.9 billion in disbursements
is possible under the program, with $2.85 billion disbursed.
Hardest Hit Fund
On February 19, 2010, the Obama Administration announced that it would make funding
available to the housing finance agencies (HFAs) of five states that had experienced the greatest
declines in home prices. This program is known as the Hardest Hit Fund (HHF), and several
additional rounds of funding, with different criteria for choosing the states, have been announced
since its inception, bringing the total number of states receiving funds to 18 plus the District of
Columbia. The funding comes from the TARP funds that Treasury initially set aside for HAMP.
After all of the rounds of funding, the total amount of funding allocated to HHF is $7.6 billion. Of
this amount, $0.9 billion has been disbursed.

42 See, for example, testimony by Neil Barofsky, the Special Inspector General for TARP before the House Committee
on Oversight and Government Reform, January 26, 2011, available at http://oversight.house.gov/wp-content/uploads/
2012/01/Testimony.Barofsky.SIGTARP.012611.pdf.
43 HAMP is part of the Administration’s broader Making Home Affordable Program, which also includes a program to
encourage refinancing of underwater mortgages backed by Fannie Mae and Freddie Mac. Funding for that program is
not through TARP.
44 November 2010 TARP 105(a) Report.
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FHA Short Refinance Program
On March 26, 2010, the Administration announced a new FHA Refinance Program for
homeowners who owe more than their homes are worth. Detailed program guidance was released
on August 6, 2010.45 The FHA Refinance Program is intended to use current FHA refinancing
processes to include people who are underwater. Under the new program, certain homeowners
who owe more than their homes are worth may be able to refinance into new, FHA-insured
mortgages for an amount lower than the home’s current value. The original lender will accept the
proceeds of the new loan as payment in full on the original mortgage; the new lender will have
FHA insurance on the new loan; and the homeowner will have a first mortgage balance that is
below the current value of the home, thereby providing some equity in the home. Homeowners
will have to be current on their mortgages to qualify for this program. Further, the balance on the
first mortgage loan will have to be reduced by at least 10%. This program is voluntary for lenders
and borrowers; however, borrowers with mortgages already insured by FHA are not eligible. The
FHA Refinance Program began on September 7, 2010, and is to be available until December 31,
2014. As of the end of March 2012, FHA reported refinancing nearly a thousand mortgages
through the program.46 Treasury has committed $8.1 billion of the TARP funds originally set
aside for HAMP to help pay for the cost of this program; additional program costs will be borne
by FHA. Of the possible $8.1 billion, $0.06 billion has been disbursed.

Author Contact Information

Baird Webel

Specialist in Financial Economics
bwebel@crs.loc.gov, 7-0652


45 FHA Mortgagee Letter 2010-23, “FHA Refinance of Borrowers in Negative Equity Positions,” August 6, 2010,
available at http://www.hud.gov/offices/adm/hudclips/letters/mortgagee/.
46 Federal Housing Administration, FHA Outlook, March 2012, available at http://portal.hud.gov/hudportal/documents/
huddoc?id=ol_current.pdf.
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