The Obama administration is setting aside $14 billion earmarked from the TARP program to cover losses produced by refinancing homeowners whose mortgages are worth more than their properties. But there are plenty of questions and risks.
Reducing balances for borrowers who are current could open mortgage servicers to lawsuits from investors that hold the riskiest slices of bonds. Those investors would be wiped out if balances are greatly reduced. For that reason, "lenders are going to be especially reluctant to do short refinances on folks who are current," says Alan White, an assistant professor at Valparaiso University in Indiana.SEE ALSO: What real estate agents and builders don't want from D.C.
Sep 7, 2010 7:09 AM
The Fiscal Times reports on the progress of banks' TARP warrant buybacks. Turns out the Treasury is getting a lot more cash that many had expected when the warrants were issued 18 months ago.
American Express Corp. raised its offer by $80 million to $340 million before Treasury agreed to sell back its warrants. Morgan Stanley, one of the nation’s biggest banks, reached a tentative deal to buy its warrants back for $900 million. But senior Treasury officials decided the offer still wasn’t high enough, and Morgan agreed to pay an extra $50 million. In more than a half-dozen other cases cited by the inspector general, Treasury officials quietly bargained with a variety of different tactics.
May 13, 2010 9:02 AM
And just like that, Kenneth Feinberg has made his job 20 times bigger. The White House's pay czar said Tuesday he will review the compensation of top executives of the more than 400 institutions that received TARP funding in late 2008 and early 2009. That group contains local heavyweights Pinnacle Financial Partners (Dec. 12, 2008) and Tennessee Commerce (Dec. 19) as well as regional players First Horizon (Nov. 14) and Green Bankshares (Dec. 23). They and a handful of smaller community banks will all have to fork over detailed info for officers who made at least $500,000. And while the semi-official word is that the expanded probe will focus on large lenders, you couldn't fault execs at area institutions for breaking a bit of a sweat.
Mar 24, 2010 8:19 AM
Janney Montgomery Scott analyst Stephen Moss has downgraded shares of SunTrust to 'neutral,' saying the regional bank holding company's recent run leaves it fully valued. He also says that, while the balance sheet is improving, SunTrust will continue to battle its bad loans and post annual losses both this year and next.
Mar 23, 2010 7:43 AM
Jennifer Demba, an analyst at SunTrust Robinson Humphrey, on Thursday downgraded a handful of regional banks because they have still have high troubled-asset levels or because they will need to raise fresh capital to pay back their TARP money.
Mar 19, 2010 10:27 AM
Pinnacle Financial Partners' proxy statement outlines how the bank holding company's participation in the Treasury's Capital Purchase Program limits its ability to pay its top executives cash and equity bonuses. In short, there will be none of the former and fewer and more restrictive version of the latter. For CEO Terry Turner and Chairman Rob McCabe, that means a target total compensation package that's just 55 percent of the 2009 version. Search for 'With respect to salaries' to read the details.
Mar 12, 2010 8:14 AM
In a recent interview for this story, Tennessee Commerce Bancorp CEO Mike Sapp said his team is getting lots of looks these days at potential clients coming from lenders that are restructuring their portfolios. And while he's content to limit Tennessee Commerce's growth this year, Sapp has to raise capital at some point in the next few quarters — to help fund future growth and repay the $30 million he took from the Treasury under the TARP program. In updating Tennessee Commerce's investor presentation, Sapp and CFO Frank Perez have outlined some hypothetical scenarios for such a raise. Basically, each $1 increase in their share price (Ticker: TNCC) lowers dilution by 4 percentage points and adds 40 basis points to their capital.
Feb 26, 2010 7:21 AM
The chair of the Congressional Oversight Panel of the Troubled Asset Relief Program is pessimistic about the commercial real estate market and about how exposed some mid-sized and smaller lenders are to it. Check out this chart from page 45 of the COP's report.
Feb 12, 2010 8:00 AM
Josh Flory has the lowdown on First Horizon's plan to pay its top execs with "salary stock units" on top of their cash salary.
The company said that for this year, TARP rules prohibit top execs from getting cash bonuses, and equity awards are limited to about one-third of total compensation. In years past, the filing said, executive compensation was heavily weighted in favor of bonus opportunities and equity awards.
Jan 26, 2010 7:44 AM
During Pinnacle Financial Partners' Q4 conference call Wednesday, CEO Terry Turner was asked about when he might repay the government's $95 million TARP investment in the bank. Turner, who had originally planned to send D.C. a big check late last summer, said a repayment is not in the cards soon.
“We’re not interested in repaying until the economic landscape is on solid footing and heading north and that … our nonperforming loan trends are heading north, too.”
Jan 21, 2010 7:32 AM