San Francisco Business Times

WASHINGTON — Despite fresh signs of a deepening financial crisis, a U.S. Treasury official said he’s confident the department has enough funds to handle the current economic and market troubles.

But that was with him referring to the department’s Troubled Asset Relief Program (TARP) as a fully-loaded $700 billion plan.

“The TARP is $700 billion,” noted Treasury Assistant Secretary for Economic Policy Phillip Swagel at a monthly press briefing, as he explained that he believes the resources available are sufficient to handle the situation.

TARP is indeed a $700 billion program, but only if Congress goes along with a request for the remaining $350 billion. Treasury has yet to ask to draw down those funds, leaving the department with direct access to only $20 billion that’s not already committed.

Meanwhile, new signs Friday that the year-long U.S. recession is deepening, and data showing home foreclosures are soaring raises new questions about whether Treasury has enough ammunition to address the market woes. On Friday, the Labor Department reported that U.S. companies shed jobs at the fastest rate since the early 1970s, pushing the unemployment rate to its highest level in 15 years. The figures suggest the year-old recession will approach or even exceed the 1981-1982 downturn in severity.

Also, the Mortgage Bankers Association said Friday the percentage of U.S. mortgage holders behind in their payments soared to a record 6.99% of loans outstanding in the third quarter, and the number of mortgages somewhere in the foreclosure process was also at a new high.

While Swagel said Treasury is always “looking at plans for the economy and financial sector,” it’s unclear what those new programs will be, when they’ll be announced and whether Treasury will have enough on hand to fund them.

At the same time, lawmakers have grown more critical of Treasury’s management of the unprecedented financial market rescue program, raising questions about whether Congress would veto a Treasury request for the additional funds.

Treasury Secretary Henry Paulson “hasn’t announced anything” about requesting the remaining TARP funds, said Swagel. “I’m going to leave it to the secretary to speak to that.”

Meanwhile, Swagel — who is slated to give one final monthly press briefing in January before President-elect Obama’s team takes office — said the economy is likely to remain challenging for many Americans. It “will take time” for the markets and economy to fully recover, he said.

All year, Swagel and other Treasury officials have been unwilling to say the economy had slipped into a recession, pointing out that a key panel, the National Bureau of Economic Research, makes that determination. Earlier this week, however, the NBER released a report finding that the economy is not only in a recession but that it’s been in that state for the past year.

Still, Swagel said the news wasn’t surprising.

“We at the Treasury have long-recognized the economy is in a downturn,” he said. “We have a very realistic view of the economy.”

Also in the news briefing, Swagel repeated what other Treasury officials have said about the ailing U.S. auto industry — that it’s “a very important” industry for the economy and the job market but the Bush administration is looking to Congress to come up with a plan to address the industry challenges.

“The admninistration is looking forward to the outcome of that work,” said Swagel.

If you want to buy a house and you have bad or non-existent credit you might have a tough time finding a home loan lender that is willing to give you a fair home loan.  There are lots of lenders that specialize in giving home loans to people with less than great credit but usually you end up paying extra high interest rates or sky high fees. If you really want to buy a home but you know your credit score is going to be a problem there are things that you can do to make yourself more attractive to home loan lenders and make home loan lenders more likely to give you a home loan or a mortgage.  The first thing to do is clean up your credit report. Order a copy of your credit report from each of the three major credit bureaus and go through each item. Chances are good that your credit report will have a lot of old or outdated information on it. You need to make sure that all the information on your credit report is current and that any old debts that you have paid off are not showing as delinquent. This will really help your chances of getting a better mortgage offer.

After you have cleaned up your credit you should figure out how much you can afford to pay for a down payment. If you can’t put down anything for a down payment you can still get a mortgage but you may have to get an additional loan for a down payment. Then you should figure out what your monthly earnings are and your monthly expenses so that you can get an accurate idea of how much you can afford to pay on your mortgage each month.  Armed with all of that information and a corrected copy of your credit report you can start to collect offers from home loan lenders. The best thing to do is to go online to a home loan lending website and enter your information. That way you will only get offers from home loan lenders that are willing to offer you a mortgage.

Investors appear to believe existing common stockholders would get nothing if there is a government bailout, a view Buffett also shares. What remains unclear is whether investors in preferred shares — a type of investment that incorporates elements of both stocks and bonds — will also be wiped out.

Make an Impact!

http://www.bridgeprivatemoney.com