LIVE Testimony of Paulson Bernanke and Bair

Sheila Bair - FDIC Chief

Sheila Bair - FDIC Chief

Update 5: Let’s hear it for Gregory Meeks, D-Queens. He has enacted a program in his office to bring together counselors, servicers, lawyers and the homeowners to get foreclosures worked out. He had 8 people in his office saved from foreclosures the next day with this action.  Kudos for Greg Meeks.

CSPAN video of Panel 1 found here

Update 4: Panel 1 just wrapped up and Panel 2 is a series of insurance brokers and CEOs who would like a piece of this pie. Paulson was asked about the TARP legislation’s applicability to insurers and the trend as noted on the front page of today’s WSJ, of insurers buying banks in an attempt to make themselves eligible for TARP funds. Paulson indicated he is open to those insurers who held existing divisions/strategic business units that would have qualified as financial insitutions under TARP, but that he does not foresee opening TARP to these insurers who are making buyouts to become eligible.

Shorter version: these moves by insurers are one unintended consequence of TARP and will not be successful under Paulson’s management. One can expect the incoming Administration to take a different view.

Paulson repeatedly refused to consider the Big 3 as eligible under TARP and would not be moved from this stance. He went back to the ‘intent’ of the TARP over and over. Pretty ‘audacious’ considering his failure to address foreclosures, which almost every member of the Cmte indicated was the ‘intent’ of TARP from their perspective.  Rep. Frank entered into the record several pages of citations from the legislation that outline the powers of Paulson to modify mortgages under TARP.

When Paulson indicated comparing the recaptilization of the banks and the FDIC mortgage modification plan is like comparing apples with oranges, and noted that perhaps the Cmte could not see the forest for the trees,  Frank replied that the Cmte feels Paulson cannot see the orange grove for all the apple trees he is addressing.

Prediction: Sheila Bair’s plan is favored by the Congressional Democrats, and Chairman Frank is sure to propose legislation to enact it. Bair is asking for 24 billion under a conservative estimate that 33% of the modifications will redefault. This 24 billion represents the government’s end of the 50% payout if the modification redefaults.  This plan has worked on IndyMac and it will work on the broader market. Bair made it clear that ‘voluntary’ modifications will not get the job done. The Congress critters chimed in with multiple anecdotal evidence of just that. (Including Maxine Waters who is helping do workouts form her Congressional office and has spent hours with servicers who ‘just do not get it’ and has had to call the CEO of Wells Fargo in attempts to get these modifications acted on.)

Bair’s plan is one in which the banks are NOT forgiving principal, they are however waiving interest on some principal in some cases. (More on that later.) Here’s hoping we get Bair as mortgage Czarina (I have concerns about Pritzker’s IOU to the FDIC interfering with Bair’s appt., let’s hope the trend in appointing the best person over the nepotistic payback continues, she will I have no doubt ‘git r done’.

Update 3: Rep. Steven LaTourette R-OH is going to town about the PNC buyout. This is one that is NOT going away.  National City wasn’t allowed to borrow from the TARP and PNC was promised National City’s share of TARP in a buyout he says and boy is he ever angry. Ohio will lose many jobs under this buyout. He gives a figure of 29,000 jobs at stake. Frank is allowing extended time for a response to this issue.

Update 2: Nydia Velazquez, D- NY, is also laying down her chips. This group of Congresspeople has had enough with Paulson and the TARP and no meaningful movement on housing. The thrill is most definitely gone.

Update: Ron Paul is now laying down the law as only he can, for the lack of truly free markets and a new reserve currency. Bernanke says he doesn’t think the dollar is dead. Well, that’s good to know. Of course, you can’t really expect the Fed Chair to say anything else, LOL. Bernanke does say he agrees the current account imbalances are a serious problem. And it is a silver lining that the account deficits are coming in line.

Tune in here now for live coverage via CSPAN of the testimony on TARP before Chairman Barney Frank and the House Financial Services Cmte.

Appearing are Paulson and Bernanke and by additional invitation, FDIC Chairwoman Sheila Bair.

So far, Paulson continues to stonewall on foreclosure action and Frank read back to him several portions of the legislation that directly dealt with foreclosures and insisted Paulson has the authority to act and more should already be acting in this regard.

Rep. Maxine Waters, Dem of CA, really let loose, it was a beautiful thing :0)

She apparently had to press the CBC hard to get them to vote for TARP and the basis was help for homeowners.

Sheila Bair just laid out her plan, and what a wonky goddess she is. Love this woman!

LA Times reports she may have role in the incoming Administration- Mortgage Czarina?!

I certainly hope so. She handled the IndyMac loan modifications when her agency took over that failed bank and has done a fabulous job modifiying those loans.

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November 18, 2008. Tags: , , , , , , , , , , , , , , . Economy, Finance, Foreclosures, Housing, TARP.

6 Comments

  1. Breaking: Sheila Bair to stay on at FDIC under PEBO–HOORAY!!! « Moderate in the Middle replied:

    […] on her work at FDIC, her incredible bio, and her mort mod plans in our previous posts here and here and […]

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  2. Bill replied:

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  3. Barney Frank defends FDIC Sheila Bair against the ‘Old Boys Club’ « Moderate in the Middle replied:

    […] Sheila Bair is covered extensively in another piece we did here […]

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  4. silver dollar city times | Digg hot tags replied:

    […] Vote LIVE Testimony of Paulson Bernanke and Bair […]

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  5. Paul replied:

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  6. lililam replied:

    Hi!!! I’m off to brkfst with the boy, but thanks for the blow by blow. Bair is definitely well respected in that wasteland- they seem to lean on her for advice, as she is one of the few (or maybe only) skilled people in the field at present.

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