Full text of Semiannual Report to Congress : Quarterly Report to Congress, Fourth Quarter 2014

The full text on this page is automatically extracted from the file linked above and may contain errors and inconsistencies.

UB

LE

DA

OG

RA

TRO

M

L

SP
E

C
INSPE TOR GEN
E

RA

AL
CI

S S E T R E LI E F P

R

SIGTARP

Office of the Special Inspector General
for the Troubled Asset Relief Program

Advancing Economic Stability Through Transparency, Coordinated Oversight, and Robust Enforcement

Quarterly Report to Congress
October 29, 2014

MISSION
SIGTARP’s mission is to advance economic stability by promoting the
efficiency and effectiveness of TARP management, through transparency,
through coordinated oversight, and through robust enforcement against
those, whether inside or outside of Government, who waste, steal or abuse
TARP funds.

STATUTORY AUTHORITY
SIGTARP was established by Section 121 of the Emergency Economic
Stabilization Act of 2008 (“EESA”), as amended by the Special Inspector
General for the Troubled Asset Relief Program Act of 2009 (“SIGTARP Act”).
Under EESA and the SIGTARP Act, the Special Inspector General has the
duty, among other things, to conduct, supervise and coordinate audits and
investigations of any actions taken under the Troubled Asset Relief Program
(“TARP”) or as deemed appropriate by the Special Inspector General. In
carrying out those duties, SIGTARP has the authority set forth in Section 6 of
the Inspector General Act of 1978, including the power to issue subpoenas.

Office of the Special Inspector General
for the Troubled Asset Relief Program
General Telephone: 202.622.1419
Hotline: 877.SIG.2009
SIGTARP@treasury.gov
www.SIGTARP.gov

M

SP
E

L

CHRISTY L. ROMERO
Special Inspector General

C
INSPE TOR GEN
E
RA

RA
DA

OG

UB

LE

The Office of the Special Inspector General for the Troubled Asset Relief Program (“SIGTARP”) has escalated its
law enforcement of TARP related crime because: (1) our expertise in uncovering financial fraud schemes is getting
deeper with each case leading to effeciencies; and (2) we are conducting investigations with a sense of urgency.
• Over the past 2 years, the number of defendants charged with a crime investigated by SIGTARP nearly
doubled (95%) to 212 defendants (135 of which were senior officers).
We seek individual accountability. Over the past two years, SIGTARP has escalated our support of prosecutions of
TARP related crime as follows:
• The number of defendants convicted of a crime investigated by SIGTARP doubled to 146.
• The number of defendants sentenced by courts to prison resulting from a SIGTARP investigation increased
by 150% from 35 defendants to 87 defendants.
• Because of the high dollar amounts involved, the number of victims, and the sophistication of the criminal
schemes that SIGTARP investigates, prison sentences of defendants SIGTARP investigates are lengthy,
averaging 64 months, nearly double the 36 month national average for white collar crimes.
We seek corporate accountability and justice.
• Three SIGTARP investigations where we uncovered criminal conduct at the corporate level were resolved
in 2014: (1) civil liability under the FIRREA Act by Bank of America for a criminal scheme related
to the “Hustle” –the court fined the bank $1.27 billion, and a bank officer $1 million; (2) DOJ nonprosecution agreement based on corporate changes and $25 million fine against broker-dealer Jeffries for
fraud regarding RMBS sold to customers including TARP’s PPIP program; and (3) DOJ nonprosecution
agreement based on corporate changes and $320 million in penalties and victim fund by SunTrust for
misrepresentations to homeowners and Treasury in TARP’s HAMP program.
SIGTARP has escalated efforts to bring back money to victims and the Government.
• Court orders and Government agreements for the payment of money based on SIGTARP investigations
have increased 78% over the last two years to $7.38 billion.
• Over the past two years, SIGTARP has ramped up efforts to aid in recouping money from defendants
investigated by SIGTARP, resulting in an eight-fold increase in actual dollars recovered to $1.4 billion.
We will not be deterred from our mission, and our accelerated law enforcement efforts are proof of our
commitment. This report also discusses homeowners lost in the shuffle when their mortgage was transferred
without their HAMP application or modification, the underutilized Home Affordable Unemployment Program,
SIGTARP recommendations unimplemented by Treasury, and SIGTARP’s audit on Treasury’s approval of excessive
pay for the top 25 executives at GM and Ally Financial (including pay of at least $1 million each, with average pay
at $3 million) while Treasury was writing off billions in losses for each company on TARP’s official books.

Respectfully,

AL

TRO

Message from the Special Inspector General

CI

S S E T R E LI E F P

R

CONTENTS
Executive Summary

3
SIGTARP Has Escalated Efforts to Find Evidence of Bailout-Related Crime 8
Although Prosecution of TARP-Related Crime Takes Time, SIGTARP
Has Escalated Efforts to Support Successful Prosecutions to Conviction
11
87 Defendants Investigated by SIGTARP Have Been Sentenced to Prison
With an Average Prison Sentence of 64 Months
12
SIGTARP Has Escalated Efforts to Bring Back to Victims and the
Government Money Lost to TARP Related Crime and Other Violations
of the Law & Penalties
14

Section 1

THE OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR THE
TROUBLED ASSET RELIEF PROGRAM
SIGTARP Creation and Statutory Authority
SIGTARP Oversight Activities
The SIGTARP Organization

Section 2

SIGTARP RECOMMENDATIONS
Unimplemented Recommendations Regarding Excessive Executive
Compensation
Update on Treasury’s Report on the Use of TARP Funds
SIGTARP Recommendations on Housing Programs

17
19
19
61

63
65
67
69

Section 3

HOMEOWNERS CAN GET LOST IN THE SHUFFLE AND SUFFER HARM
WHEN THEIR SERVICER TRANSFERS THEIR MORTGAGE BUT NOT THE
HAMP APPLICATION OR MODIFICATION
Introduction
Homeowners Continue to Face Barriers to HAMP Assistance When
Their Mortgages Are Transferred to Another Servicer
Homeowner Complaints About HAMP Problems Caused by Servicing
Transfers Have Escalated
Treasury Oversight of HAMP Mortgage Servicing Transfers

Section 4

TARP OVERVIEW
TARP Funds Update
TARP Programs Update
Cost Estimates
TARP Programs
Housing Support Programs
Financial Institution Support Programs
Automotive Industry Support Programs
Asset Support Programs

99
101
103
106
108
113
115
118
119
122
129
230
295
303

Section 5

TARP OPERATIONS AND ADMINISTRATION
TARP Administrative and Program Operating Expenditures
Financial Agents

Section 6

MONITORING INTERCONNECTIONS OF THE LARGEST TARP BANKS
Monitoring Interconnections of the Largest TARP Banks
Indicators of Interconnectedness
Endnotes
APPENDICES
A. Glossary
B. Acronyms and Abbreviations
C. Reporting Requirements
D. Transaction Detail
E. Debt Agreements, Equity Agreements, and
Dividend/Interest Payments
F. HAMP Modification Statistics
G. Cross-Reference of Report to the Inspector General Act of 1978
H. Public Announcements of Audits
I. Key Oversight Reports and Testimony
J. Peer Review Results
K. Organizational Chart
L. Correspondence

321
323
324

337
339
363
370
398
398
401
403
407
568
572
574
575
576
578
579
580

EXECUTIVE SUMMARY

4

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

SIGTARP has always pushed for a never-before-seen level of transparency for
the American people who funded the bailout. We made banks tell us what they
did with the TARP funds; we pushed to have all TARP contracts made available
online; we publish plain English reports every three months on the TARP bailout
and SIGTARP’s work; we conduct deep dive audits through interviews and reviews
of e-mails and other documents, reaching our own conclusions on why certain
bailout decisions were made—conclusions that we make public. This includes
an important deep dive we released this quarter on Treasury’s approval to reward
the top 25 executives at GM and Ally Financial with excessive pay (including pay
of at least $1 million each, with average pay at $3 million) while Treasury was
simultaneously writing off billions in losses for each company in its formal TARP
accounting books and records. We also want to bring as much transparency as
we can to SIGTARP’s law enforcement efforts, so that the American people know
that SIGTARP is on watch detecting and investigating bailout-related crime, and
holding criminals accountable through convictions, prison sentences, forfeiture of
criminal proceeds, and penalties.
Over the past two years, SIGTARP has escalated its criminal law enforcement
of TARP bailout-related crime—the number of defendants charged with a crime
investigated by SIGTARP nearly doubled (95%) from 109 defendants charged by
October 2012 to 212 defendants charged by October 2014. Just as the FBI and
other law enforcement agencies, SIGTARP is responsible for detecting crime,
unraveling criminal schemes, and finding the evidence needed by prosecutors to
charge defendants with committing crime. However, SIGTARP’s jurisdiction is
narrowly focused on those crimes that involve TARP, such as crimes by or against
a TARP bailout recipient or involving a TARP program. These are not easy crimes
to discover and investigate. They are typically crimes purposely designed to be
concealed. SIGTARP special agents, investigators, and analysts use classic law
enforcement techniques, such as analyzing thousands of documents, interviewing
witnesses, using cooperative witnesses, and surveillance, and we combine that with
significant forensic analysis to detect and unravel sophisticated complex financial
crimes that were intentionally designed to be hidden. Our expertise in uncovering
complex financial fraud schemes that were purposely designed to be concealed
is getting deeper with each case, allowing us to target criminal conduct in other
cases more quickly, before witnesses’ memories fade and evidence grows stale. This
expertise and our conducting criminal investigations with a sense of urgency have
led SIGTARP over the last two years to ramp up our law enforcement efforts.
SIGTARP has not ramped up its
law enforcement efforts in order to
We at SIGTARP have escalated
increase statistics, but instead to bring
accountability and justice in meaningful
our efforts to seek individual and
cases that will make a difference.
corporate accountability for TARPSIGTARP focuses its resources on those
related crime. There must be real
cases where the crime is egregious,
where prosecution could deter future
consequences for breaking the law.
crime by putting individuals and

5

6

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

corporations on notice of what constitutes criminal activity, and where victims need
to be protected.
• Accountability and justice are served when an individual is convicted by a
judge or jury. SIGTARP does not investigate a case and then turn it over to a
prosecutor without conducting further work. We work hand-in-hand with the
prosecutor to ensure a successful conviction. To the extent that the defendant
does not plead guilty, SIGTARP will prepare for trial with the prosecutor.
Four cases investigated by SIGTARP went to jury trial this past year, requiring
SIGTARP’s heavy involvement.
çç Over the past two years, SIGTARP has escalated its support of criminal
prosecutions of TARP bailout-related crime—doubling the number
of defendants convicted of a crime investigated by SIGTARP from 71
defendants convicted by October 2012 to 146 in October 2014.
• Court sentencing following a conviction brings individual accountability,
often in the form of serious jail time. Over the past two years, the number of
defendants courts sentenced to prison resulting from a SIGTARP investigation
increased by 150% to 87 defendants.
• Because of the high dollar amounts involved, the number of victims, and
the sophistication of the criminal schemes that SIGTARP investigates,
prison sentences of defendants SIGTARP investigates are lengthy,
averaging 64 months, nearly double the 36 month national average for
white collar crimes.
• We also seek corporate accountability for criminal conduct. This can come in
the form of holding a corporation responsible for criminal conduct or through
the conviction of senior management of a corporation. Several SIGTARP
investigations resulted in criminal convictions of the top management at
institutions. Additionally, three SIGTARP investigations where we uncovered
criminal conduct at the corporate level were resolved in 2014:
çç Bank of America “Hustle” jury trial: SIGTARP’s investigation with the
U.S. Attorney for the Southern District of New York resulted in a Federal
jury trial in New York, with the jury finding that Bank of America and
one of its officers Rebecca Mairone had engaged in criminal misconduct.
The Federal court’s July 30, 2014 order stated, “the essential crime found
by the jury was a scheme to induce Fannie Mae and/or Freddie Mac to
purchase mortgage loans originated through the High Speed Swim Lane by
misrepresenting that the loans were of higher quality than they were.” The
court’s opinion described the bank’s process known as the “Hustle” as, “the
vehicle for a brazen fraud by the defendants, driven by hunger for profits
and oblivious to the harms thereby visited, not just on the immediate victims
but also on the financial system as a whole.” In ordering penalties of $1.27
billion against Bank of America and $1 million against defendant Mairone,
the Federal court’s order found that the law the Government sued under
(the Financial Institutions Reform, Recovery, and Enforcement Act, known

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

as FIRREA), “predicated civil liability on the Government proving criminal
violations (here mail fraud and wire fraud), by a preponderance of the
evidence….In short, FIRREA seeks to impose substantial civil penalties for
criminal misconduct affecting federally insured financial institutions.”
çç Investment bank and broker-dealer Jefferies “Residential Mortgage
Backed Securities Fraud” Case: SIGTARP’s investigation with the
U.S. Attorney for the District of Connecticut uncovered that brokers
at Jefferies fraudulently increased the profitability of certain residential
mortgage-backed securities (“RMBS”) trades for Jefferies, including
by misrepresenting the RMBS seller’s asking price to the buyer and by
misrepresenting the buyer’s asking price to the seller. We also uncovered
that brokers at Jefferies concealed that RMBS were being sold from
Jefferies’s inventory in order to charge buyers extra commissions to
which Jefferies was not entitled. These misrepresentations were made to
customers, including PPIP funds that traded with TARP money. As part
of a non-prosecution agreement, Jefferies paid $25 million and agreed to
corporate changes. Jefferies trader Jesse Litvak was sentenced to prison
after being convicted by a jury after trial as a result of crimes investigated by
SIGTARP.
çç SunTrust Fraud Related to HAMP Foreclosure Prevention Program:
SIGTARP’s investigation with the U.S. Attorney for the Western District
of Virginia uncovered that SunTrust misled numerous homeowners who
sought mortgage relief through
HAMP. The investigation
SIGTARP has escalated its efforts to
uncovered that SunTrust put
bring back money to the Government
piles of unopened homeowners’
HAMP applications in a room
and Victims.
where the floor buckled under
the sheer weight of unopened packages. Treasury was lied to. Homeowners
were improperly foreclosed on. As part of a non-prosecution agreement,
SunTrust agreed to pay $320 million to victims and the Government, and
agreed to corporate changes.
• Accountability also comes in the form of dollars because no one should be
allowed to keep the proceeds of crime or other violations of the law, and because
penalties serve a punitive and deterrent effect. Court orders and Government
agreements for the return of money based on SIGTARP investigations have
increased 78% over the last two years from $4.15 billion to $7.38 billion.
• An important part of SIGTARP’s mission involves assisting in the collection of
forfeited cash, identifying property purchased with the proceeds of violations of
the law, and for the restitution to victims and collection of penalties. Recovery
of court-ordered money based on SIGTARP investigations is up nearly
eight-fold since 2012, totaling more than $1.4 billion, which includes $1
billion of the Department of Justice’s $16 billion settlement with Bank of
America.

7

8

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

SIGTARP HAS ESCALATED EFFORTS TO FIND
EVIDENCE OF BAILOUT-RELATED CRIME

Criminal schemes threaten to undo the confidence in our financial system that
TARP was created to instill. Many of these fraud schemes began before the
financial crisis, some of which continued until SIGTARP and its law enforcement
partners put a stop to them, or stopped when the bank failed. History shows that a
coordinated and collaborative approach to rooting out fraud can yield results, but
often take many years. Over a nine-year span related to the savings and loan crisis
(“S&L crisis”), regulators made thousands of criminal referrals based on possible
criminal wrongdoing to law enforcement. These referrals led to the conviction of
more than one thousand defendants, in cases that were often smaller in dollar
size and complexity than the cases SIGTARP investigates. According to a 1993
GAO study, 55% of these referrals to law enforcement out of the S&L crisis were
for estimated dollar losses under $25,000, with only 15% at $1 million or more.
In addition, the GAO found that nearly 70% of those sentenced out of the S&L
crisis were sentenced to prison for less than 2 years (24 months), compared to the
average sentence of 64 months from a SIGTARP-investigated case. According to
GAO’s analysis of data from the Department of Justice, out of 304 cases involving
thrifts in the S&L crisis at that time, the alleged fraud for all cases was $2.9 billion,
which equals the total fraud investigated by SIGTARP in just one of its cases—its
investigation of Colonial Bank and Taylor, Bean and Whittaker. SIGTARP has not
had the benefit of very many criminal referrals from regulators. Without referrals
from regulators, SIGTARP operates at a disadvantage.
Challenged by the lack of referrals from regulators, SIGTARP proactively
developed an expertise in identifying crime related to the TARP bailout by analyzing
information on institutions, corporate
insiders, and suspected co-conspirators
SIGTARP has increased the speed at
that could serve as red flags. With
each case, SIGTARP’s knowledge of
which it gathers evidence so that in
potential red flags grew. However, even
most cases investigations result in
with the red flags SIGTARP proactively
identified, SIGTARP must conduct the
criminal charges in under two years’
hard task of determining whether there
time, which would then be followed
is evidence of a crime using traditional
by the time spent for prosecution,
law enforcement techniques including
surveillance operations and executing
conviction, sentencing, and recovery
search warrants for electronic evidence
of monies ordered. SIGTARP
of a crime. SIGTARP computer forensic
agents are able to obtain electronic
continues to open new investigations.
materials and evidence, and process
these materials efficiently, allowing
investigations to proceed at an accelerated pace in unraveling complex financial
schemes.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Although investigations of complex financial crime designed to be concealed
takes time, SIGTARP has honed its expertise to identify and investigate TARPrelated crime, and gained efficiencies with each case, resulting in a rapid rise in
the number of individuals charged with a crime SIGTARP investigated. SIGTARP’s
investigations have led to criminal charges against 212 individuals (a 95% increase
since 2012), including senior officers at banks that applied for or received TARP,
outsiders committing fraud against TARP banks, or other participants in TARP
programs, and scam artists preying on struggling homeowners seeking help from
TARP’s housing program. SIGTARP acts with a calculated urgency to gather
evidence expeditiously to shut down ongoing fraud and bring immediate relief to
victims, including taxpayers whose investment in TARP is threatened by crime.
SIGTARP regularly works with prosecutors to bring charges as our cases unfold,
rather than delaying the timeframe to charge all defendants simultaneously. Figure
ES.1 illustrates the annual increase in defendants charged with TARP-related
crimes. Criminal charges are not evidence of guilt.
FIGURE ES.1

ESCALATION IN CRIMINAL CHARGES RESULTING FROM
SIGTARP INVESTIGATION (CUMULATIVE)

Criminal Charges (Individual)

250
212
200
154

150
109

100
51

50

0

2
2009

+14

16
2010

+35

+58

2011

+45

2012

+58

2013

2014

Fiscal Year
*Criminal charges are not evidence of guilt.

Over the past two years, the number of senior officers of a company charged
with crimes investigated by SIGTARP increased by 85% to 135 senior officers
charged. SIGTARP must dispense justice in a fair and rational manner based only
on the facts and the law. No matter how immoral the culture of risk-taking and
greed that might occur at an institution, the law dictates what actions constitute
a crime and requires SIGTARP to gather evidence to prove criminal intent—
knowledge that a person engaged in conduct that was criminal. It can be difficult
to prove criminal intent of senior officers at TARP institutions, particularly the
larger TARP companies where often the hierarchy is designed so that CEOs and
other top officers are shielded from knowledge of detailed operations. This is
where someone inside the company sharing what they know with law enforcement

9

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

can make a huge difference, as would referrals from regulators. The difficulty in
proving criminal intent at higher levels will not deter SIGTARP from investigating,
and if we can prove it, we will refer it for criminal prosecution every time. Figure
ES.2 shows the annual increase in senior officers charged with TARP-related
crimes. Criminal charges are not evidence of guilt.
FIGURE ES.2

INCREASES IN SENIOR OFFICERS CRIMINALLY CHARGED
FROM SIGTARP INVESTIGATION (CUMULATIVE)
Senior Officials Charged (Individuals)

10

160
140

135

120
98

100
80

73

60
40

36

20
0

1
2009

+10

11
2010

+25

+37

2011

+25

2012

+37

2013

2014

Fiscal Year
*Criminal charges are not evidence of guilt.

Even where there is evidence of violations of the law but not evidence of
criminal intent, SIGTARP does not give up, and we will seek every available
remedy. While we are always investigating to determine whether there is criminal
conduct, civil enforcement and industry bans also make our financial system safer,
bring justice to those harmed, and hold defendants accountable for not abiding
with the law. Working with our prosecutorial partners and civil enforcement
agencies, SIGTARP has aggressively pursued civil actions against institutions
of all sizes, as well as individuals. Over the last two years, civil charges based on
SIGTARP investigations have increased by 58% to 133 individuals and businesses
charged. As of September 30, 2014, 89 senior officers have received bans of varying
length resulting from SIGTARP investigations, including Bank of America’s former
CEO Ken Lewis and its former CFO Joe Price, who this year were banned for 3
years and 18 months respectively under a settlement of the New York Attorney
General’s civil case investigated by SIGTARP. Figure ES.3 demonstrates the annual
increase in defendants charged in TARP-related civil cases.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE ES.3

INCREASE IN CIVIL CHARGES OF INDIVIDUALS AND
INSTITUTIONS FROM SIGTARP INVESTIGATIONS
(CUMULATIVE)
140

133

120

114

100
84

80
60

55
41

40
20

23
+18

0
2009

+14

2010

+29

2011

+30

2012

+19

2013

2014

ALTHOUGH PROSECUTION OF TARP-RELATED
CRIME TAKES TIME, SIGTARP HAS ESCALATED
EFFORTS TO SUPPORT SUCCESSFUL
PROSECUTIONS TO CONVICTION

SIGTARP has ramped up its efforts to aid in the prosecution of TARP-related
crimes. Prosecuting TARP-related crime to successful conviction takes time
and teamwork. To ensure the defendant will be successfully prosecuted by
our prosecutorial partners and convicted by a jury or judge, when SIGTARP
investigates a case, we unravel and collect the evidence required by the law.
SIGTARP agents or investigators are likely to testify at trial and sit at the table with
the prosecutor representing the Government. SIGTARP has been tremendously
successful in supporting convictions. There has been only one defendant
investigated by SIGTARP who was acquitted by a jury, and that happened in a
case against Bank of the Commonwealth officers and co-conspirators, where
the jury convicted 10 other defendants. Out of the 212 defendants criminally
charged resulting from SIGTARP investigations, 146 individuals have already been
convicted, and 65 defendants await trial. More than half (77) of those defendants
have been convicted over the past two years, which required SIGTARP to ramp
up its work to support prosecutions resulting from its investigations. Figure ES.4
shows the annual increase in defendants convicted for TARP-related crimes
investigated by SIGTARP.

11

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE ES.4

CRIMINAL CONVICTIONS RESULTING FROM RAMP UP
OF SIGTARP’S SUPPORT OF PROSECUTIONS (CUMULATIVE)
160

Convictions (Individuals)

12

146

140
120

112

100
80

71

60
40

28

20
0

2
2009

+7

9
2010

+19

+43

2011

+41

2012

+34

2013

2014

Fiscal Year

87 DEFENDANTS INVESTIGATED BY SIGTARP
HAVE BEEN SENTENCED TO PRISON WITH AN
AVERAGE PRISON SENTENCE OF 64 MONTHS

When SIGTARP finds evidence of a crime, it will work with its prosecutorial
partners to seek prison sentences for the defendant, to bring justice, remove the
person from society before they can break the law again, and deter those who may
consider breaking the law. Over the past two years, the number of defendants
courts sentenced to prison after a SIGTARP investigation increased by 150%
from 35 defendants in October 2012 to 87 defendants. Figure ES.5 shows
the annual increase in defendants sentenced to prison for TARP-related crimes
investigated by SIGTARP.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE ES.5

INCREASE IN DEFENDANTS INVESTIGATED BY SIGTARP
AND SENTENCED TO PRISON (CUMULATIVE)
100
90

87

80
70

65

60
50
40

35

30
19

20
10
0

1
2009

+2

3
2010

+16

+16

2011

+30

2012

+22

2013

2014

Some examples of the 87 defendants investigated by SIGTARP and sentenced
to prison include:
• Edward Woodard, the former chairman and CEO of the now-failed Bank of
the Commonwealth, sentenced to 23 years during fiscal year 2014 for fraud on
the bank’s books and records, including those used to apply for TARP; Stephen
Fields, former executive vice president of the bank, sentenced to 17 years; Troy
Brandon Woodard, former vice president of the bank’s subsidiary, sentenced on
September 30, 2013, to 8 years; co-conspirators Eric Menden sentenced to 14
years and Stephen Hranowskyj sentenced to 11 years;
• Isaak Khafizov, former owner of American Home Recovery, sentenced to 9 years
in fiscal year 2014 for defrauding hundreds of struggling homeowners trying to
get into HAMP;
• Christopher Godfrey & Dennis Fisher, owners/controllers of HOPE, sentenced
in fiscal year 2014 to 7 years each for defrauding struggling homeowners trying
to get into HAMP; and
• Lee Farkas, the former chairman of
Prison sentences based on SIGTARP
Taylor, Bean & Whitaker, sentenced
investigations average 64 months,
to 30 years for his role in a multinearly twice as long as the average
billion dollar fraud scheme that
included an attempt by Colonial
sentence for white collar crime.
Bank to get TARP funds.
Of the 146 defendants convicted after a SIGTARP investigation, 14 have
received prison sentences of more than 10 years (See Figure ES.6). The length of
a prison sentence imposed by a court is at a court’s discretion, but generally courts
consider the number of crimes committed and sentencing guidelines for each of
those crimes. SIGTARP regularly investigates bank fraud that carries a maximum
prison sentence of 30 years. Other crimes SIGTARP investigates also carry the

13

14

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

possibility of lengthy sentences, including wire and mail fraud affecting a financial
institution (maximum sentence of 30 years), securities fraud (maximum sentence
of 25 years), money laundering (maximum sentence of 20 years), conspiracy to
commit bank fraud (maximum sentence of 30 years), bankruptcy fraud (maximum
sentence of 5 years), false statements (maximum sentence of 5 years), and a 2009
change to the crime of major fraud against the United States to include fraud
related to TARP (maximum sentence of 10 years).
In addition, a court may enhance the recommended sentencing guidelines
based on factors present such as the amount of money involved, the number
of victims, the role of the defendant in the crime, and whether the defendant
occupied a position of trust. These factors are often amplified in SIGTARP cases,
leading to longer sentences for the complex crimes that SIGTARP uncovers.
FIGURE ES.6

AVERAGE PRISON SENTENCES OF DEFENDANTS
INVESTIGATED BY SIGTARP (IN MONTHS)
200

175
150

100

64
50

0

36
National Average
Prison Sentence for
White Collar Crimes

Average Prison
Sentence for Crimes
SIGTARP Investigated

Defendants
SIGTARP Investigated
Sentenced to 10+
Years in Prison

SIGTARP HAS ESCALATED EFFORTS TO BRING
BACK TO VICTIMS AND THE GOVERNMENT MONEY
LOST TO TARP RELATED CRIME AND OTHER
VIOLATIONS OF THE LAW & PENALTIES
The requirement through a court order or Government agreement that a defendant
pay money brings accountability for law-breakers. First, those who break the law
should not be allowed to keep the fruits of their crimes or civil violations of the law.
Second, SIGTARP plays an important role in the Government’s attempt to make
victims whole. Third, to bring accountability and deterrence, penalties will have
to be substantial, otherwise; the risk is that penalties will become a cost of doing
business. Over the last two years, court-ordered penalties and agreements with the
Government resulting from a SIGTARP investigation have increased by 78% to
$7.38 billion, as indicated in Figure ES.7.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE ES.7

SIGTARP’S ESCALATED EFFORTS INCREASED MONEY
ORDERED TO BE PAID (CUMULATIVE)
Asset Recovery (Millions)

$8,000
$7.38B

7,000
6,000
5,000

$4.68B

4,000

$4.15B

$3.89B

3,000
2,000
1,000
0

$11M

$153M

2009

$164M

$3.73B

2010

$261M

2011

$527M

2012

$2.7B

2013

2014

Fiscal Year

Even if a court orders, or a
Government agreement requires, a
defendant to pay money, it is not always
an easy task to recoup that money.
Given SIGTARP’s expertise and detailed
knowledge of the facts in the cases we
investigate, part of our job is to identify
proceeds from the crime (or civil
violations) and recoup funds ordered to
be repaid through seizures and forfeiture
(See Figure ES.8).

Over the past two years, SIGTARP
has ramped up efforts to aid in
recouping money from defendants
investigated by SIGTARP who violated
the law, resulting in an eight-fold
increase in actual dollars recovered
to $1.4 billion.

FIGURE ES.8

INCREASES IN MONEY RECOVERED FROM A DEFENDANT
INVESTIGATED BY SIGTARP (CUMULATIVE)
Asset Recovery (Millions)

$1,500

$1.468M

1,200

900

600

300

0

2009

$0

$151M

2010

$10M

2011

$186M

$161M

$151M

$151M
$0

$25M

2012

Fiscal Year

$1,283M

2013

2014

15

16

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

SIGTARP investigations and the follow-on prosecutions matter. They matter
to the victims. They matter to the communities these banks serve. They matter to
the taxpayers who shouldered the burden of TARP only to see some TARP banks
fail and bailout dollars lost. They matter to instill confidence in the United States
financial system.
SIGTARP’s cases remain necessary for our financial system to recover into a
stronger system and for the American people to have confidence in our financial
and justice systems. The economic toll from the crisis has been devastating.
American families lost years of hard-earned savings. Businesses, small and large,
lost access to the cash they need to grow. Millions of American workers lost jobs or
new opportunities. Left unchecked, the crimes that accompanied the crisis and the
Government’s rescue efforts can hinder recovery and intensify the economic pain
many Americans still feel.
TARP was intended to aid in restoring long-term financial stability and
SIGTARP investigations play a critical part in that recovery. Congress created
SIGTARP as a white-collar law enforcement agency to root out TARP fraud and
protect the taxpayers’ TARP investment. SIGTARP will continue to investigate
TARP-related crimes even after a TARP recipient is no longer participating in the
program. Our work at SIGTARP is far from being over, with TARP scheduled to
continue for at least eight more years. SIGTARP will not be deterred from our
mission, and our accelerated law enforcement efforts are proof of our commitment.

SECT IO N 1

THE OFFICE OF THE SPECIAL
INSPECTOR GENERAL FOR THE
TROUBLED ASSET RELIEF PROGRAM

18

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

SIGTARP CREATION AND STATUTORY AUTHORITY

The Office of the Special Inspector General for the Troubled Asset Relief Program
(“SIGTARP”) was created by Section 121 of the Emergency Economic Stabilization
Act of 2008 (“EESA”) as amended by the Special Inspector General for the
Troubled Asset Relief Program Act of 2009 (“SIGTARP Act”). Under EESA and the
SIGTARP Act, SIGTARP has the responsibility, among other things, to conduct,
supervise, and coordinate audits and investigations of the purchase, management,
and sale of assets under the Troubled Asset Relief Program (“TARP”) or as deemed
appropriate by the Special Inspector General. SIGTARP is required to report
quarterly to Congress in order to describe SIGTARP’s activities and to provide
certain information about TARP over that preceding quarter. EESA gives SIGTARP
the authorities listed in Section 6 of the Inspector General Act of 1978, including
the power to obtain documents and other information from Federal agencies and
to subpoena reports, documents, and other information from persons or entities
outside the Government.
Under the authorizing provisions of EESA, SIGTARP is to carry out its duties
until the Government has sold or transferred all assets and terminated all insurance
contracts acquired under TARP. In other words, SIGTARP will remain “on watch”
as long as TARP assets remain outstanding.

SIGTARP OVERSIGHT ACTIVITIES

SIGTARP continues to fulfill its oversight role on multiple parallel tracks:
investigating allegations of fraud, waste, and abuse related to TARP; conducting
oversight over various aspects of TARP and TARP-related programs and activities
through 23 published audits and evaluations, and 151 recommendations as of
September 30, 2014; and promoting transparency in TARP and the Government’s
response to the financial crisis as it relates to TARP.

SIGTARP Investigations Activity
SIGTARP is a white-collar law enforcement agency. As of September 30, 2014,
SIGTARP had more than 150 ongoing criminal and civil investigations, many in
partnership with other agencies in order to leverage resources. SIGTARP takes its
law enforcement mandate seriously, working hard to deliver the accountability the
American people demand and deserve. SIGTARP’s investigations have delivered
substantial results, including:
• criminal chargesi against 212 individuals, including 135 senior officers (CEOs,
owners, founders, or senior executives) of their organizations
• criminal convictions of 146 defendants (others are awaiting trial)
• prison sentences for 87 defendants (others are awaiting sentencing)
i Criminal charges are not evidence of guilt. A defendant is presumed innocent until and unless proven guilty.

19

20

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 1.1

CRIMINAL CHARGES FROM
SIGTARP INVESTIGATIONS
RESULTING IN PRISON
SENTENCES
3%
3%

2%
2%
6%

4%
8%

32%

7%
14%

19%

Wire & Mail Fraud
Conspiracy to Commit Fraud
Bank Fraud
State Charges (Conspiracy to collect
upfront fees/commit grand theft)
False Statements & Entries
Securities Fraud
Loan Fraud
Money Laundering
Bankruptcy Fraud
Alteration of records
Other
Note: Numbers may not total due to rounding.

FIGURE 1.2

DEFENDANTS CONVICTED
IN CASES FILED AS A
RESULT OF SIGTARP
INVESTIGATIONS, BY
EMPLOYEE TYPE
6%
5%

4%
3%

• civil cases and other actions against 66 individuals (including 52 senior officers)
and 67 entities (in some instances an individual will face both criminal and civil
charges)
• orders temporarily suspending or permanently banning 89 individuals from
working in the banking or financial industry, working as a contractor with the
Federal Government, working as a licensed attorney, or other types of businesses
• orders of restitution and forfeiture and civil judgments and other orders
entered for $7.38 billion. This includes restitution orders entered for $4.2
billion, forfeiture orders entered for $241.6 million, and civil judgments and
other orders entered for $2.95 billion. Although the ultimate recovery of these
amounts is not known, as of October 20, 2014, SIGTARP has already assisted
in the recovery of $1.468 billion. These orders happen only after conviction and
sentencing or civil resolution and many SIGTARP cases have not yet reached
that stage; accordingly, any recoveries that may come in these cases would serve
to increase the $1.468 billion
• savings of $553 million in TARP funds that SIGTARP prevented from going to
the now-failed Colonial Bank
SIGTARP’s investigations concern a wide range of possible violations of the
law, and result in charges including: bank fraud, conspiracy to commit fraud or to
defraud the United States, wire fraud, mail fraud, making false statements to the
Government (including to SIGTARP agents), securities fraud, money laundering,
ii
and bankruptcy fraud, among others. These investigations have resulted in charges
against defendants holding a variety of jobs, including 135 senior executives.
Figure 1.1 represents a breakdown of criminal charges from SIGTARP
investigations resulting in prison sentences. Figure 1.2 represents a breakdown
of defendants convicted in cases filed as a result of SIGTARP investigations, by
employment or position of the individual. Although the majority of SIGTARP’s
investigative activity remains confidential, over the past quarter there have been
significant public developments in several SIGTARP investigations, described
below.

7%
8%

71%

Senior Executive
MMS/MHA Scam
Bank Employee
Individual
Straw Borrower/Investor
Other
Attorney
Note: Numbers may not total due to rounding.

ii The prosecutors partnered with SIGTARP ultimately decide which criminal charges to bring resulting from SIGTARP’s investigations.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TARP-Related Investigations Activity Since the July 2014 Quarterly
Report
$45 Billion TARP Recipient Bank of America Ordered to Pay $1.27 Billion in Civil
Penalties for “Brazen” Fraud Against the United States – Bank of America, N.A.,
Countrywide Financial Corporation, Countrywide Home Loans, Inc., and Rebecca
Mairone

On July 30, 2014, in the United States District Court for the Southern District of
New York, U.S. District Judge Jed S. Rakoff ordered Bank of America, in which
taxpayers invested $45 billion through the TARP bailout, to pay a significant civil
penalty of $1.27 billion for engaging in an intentional scheme to defraud the
United States by selling thousands of defective toxic loans to the Government
sponsored entities, Fannie Mae and Freddie Mac (the “GSEs”). Additionally, former
executive Rebecca Mairone was ordered to pay a civil penalty of $1 million to the
Government. As reported previously, on October 23, 2013, a Federal jury in New
York, New York, found Bank of America, N.A., and its predecessors, Countrywide
Financial Corporation and Countrywide Home Loans, Inc. (collectively, “BAC”),
and Mairone liable for the fraud after a four week trial.
In determining these penalty amounts, the Court highlighted the egregious
nature of the fraud, stating that “[the bank’s loan] process was from start to finish
the vehicle for a “brazen” fraud by the defendants, driven by a hunger for profits
and oblivious to the harms thereby visited, not just on the immediate victims but
also on the financial system as a whole.” The Court further explained that its
“careful review of the evidence ha[d] convinced the Court, as it did the jury, that
the evidence of the defendants’ fraudulent scheme and fraudulent intent was
ample” and, accordingly, that punitive and deterrence penalties were warranted.
The evidence substantiated that starting in August 2007, BAC developed
and rolled out a program known as the “Hustle” (which stood for “High Speed
Swim Lane,” or “HSSL”). As its name implies, the Hustle focused on generating
and selling a high volume of mortgages at high speed to the GSEs. To do so,
BAC jettisoned reasonable steps to assure loan quality in favor of volume, speed
and profits; specifically, it eliminated underwriter reviews of mortgage loans
and removed critical quality control checks and fraud prevention measures that
would have slowed down the origination process. At the same time, BAC changed
its compensation structure to base performance bonuses solely on volume.
Furthermore, BAC and Mairone pushed the Hustle program despite repeated
warnings that doing so would yield disastrous results, including defaults on the
loans. In particular, as shown in the course of the trial, even when the Bank’s own
internal quality reports evidenced deteriorating loan quality, BAC and Mairone
“shunted critics and criticisms aside, doubled down on their risky behavior, and
applied ever more pressure on loan specialists to ignore loan quality concerns.”
Finally, the “defendants purposefully ignored their contractual obligations to report
to [the GSEs] all loans-identified as defective, reporting only six HSSL loans as
such when, in fact, there were thousands.”

21

22

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Through the Hustle program, BAC originated thousands of poor quality loans
and sold them to the GSEs based on lies that the loans were investment quality
and met the GSEs’ requirements, cheating the GSEs of money in the process.
As a result, BAC fraudulently added billions of dollars to its bottom line and paid
executives bonuses based on the speed and volume of the defective GSE loans they
processed.
The case was investigated by SIGTARP, the U.S. Attorney’s Office for the
Southern District of New York, and the Federal Housing Finance Agency Office of
Inspector General.
Bank of America Agrees to Pay $16.65 Billion in Historic Settlement for
Financial Fraud Leading Up to and During the Financial Crisis, Including $1
Billion to Settle SIGTARP Investigations – Bank of America Corporation

On August 20, 2014, TARP recipient Bank of America Corporation (“BAC”),
entered into an historic $16.65 billion settlement agreement with the Department
of Justice, among others, to resolve civil investigations against BAC and its former
and current subsidiaries, including TARP recipient Merrill Lynch and Countrywide
Financial Corporation (“Countrywide”), involving: the bank’s packaging, sale,
arrangement, structuring and issuance of residential mortgage-backed securities
(“RMBS”) and collateralized debt obligations (“CDOs”); the bank’s practices
concerning the underwriting and origination of risky mortgage loans; and
the bank’s misrepresenting the quality of those loans to, among others, the
Government-sponsored enterprises, Fannie Mae and Freddie Mac (the “GSEs”).
Of the $16.65 billion settlement, $1 billion relates to the resolution of SIGTARP
investigations into (and three private “whistleblower suits” filed under seal pursuant
to the False Claims Act ) the origination of defective residential mortgage loans
by Countrywide’s Consumer Markets Division and BAC’s Retail Lending division,
as well as the fraudulent sale of such loans to the GSEs. The settlement does not
release individuals from civil charges, nor does it absolve BAC, its current or former
subsidiaries and affiliates, or any individuals from potential criminal prosecution.
BAC also must cooperate fully with investigations or prosecutions into the conduct
at issue.
According to the settlement agreement, BAC admitted that, from 2005 to 2007,
Countrywide unloaded toxic mortgages on the GSEs, well-aware that: (i) many of
the residential mortgage loans it had made to borrowers were defective; (ii) many of
the representations and warranties made to the GSEs about the quality of the loans
were inaccurate; and (iii) it did not self-report to the GSEs mortgage loans it had
internally identified as defective.
More specifically, in the run-up to the financial crisis Countrywide undertook
to expand its loan offerings based on “salability” and with little regard to risk. For
example, in late 2006 Countrywide began offering “Extreme Alt-A” loans. One
Countrywide executive called this a “hazardous product,” and, accordingly, asked
to see “a detailed implementation plan” for originating and selling the Extreme AltAs “such that [Countrywide was] not left with the credit risk.” Similarly, between
2005 and 2007, Countrywide executives recognized the risk in its origination

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

of another product, “Pay Option Arms,” and warned that these loans should be
sold or securitized, fearing both “a financial and reputational catastrophe” in the
event they were retained on Countrywide’s balance sheet. Despite this knowledge,
Countrywide’s offering documents did not, among other things, describe the
Extreme Alt-A program, nor did they disclose that the Pay Option Arm loans were
loans that it elected not to hold for its own investment portfolio because they had
risk characteristics that Countrywide’s management had identified as inappropriate
for its balance sheet.
The settlement also resolves the Government’s additional claims under the
Financial Institutions Reform, Recovery and Enforcement Act (“FIRREA”)
for loans fraudulently sold to the GSEs. As to the FIRREA investigation, BAC
admitted that, in the run-up to the financial crisis throughout 2006 and 2007,
Merrill Lynch regularly told investors the loans it was securitizing were made to
borrowers who were likely and able to repay their debts despite knowing, based on
diligence it had performed on samples of the loans, that a significant number had
material compliance and underwriting defects, including as many as 55 percent
in a single pool. BAC further admitted that Merrill Lynch disregarded its own due
diligence and securitized loans it had identified as defective, leading one Merrill
Lynch consultant to “wonder why we have due diligence performed” if Merrill
Lynch was going to securitize the loans “regardless of issues.”
Finally, as part of the settlement, BAC will pay $7 billion worth of relief to
remedy harms to struggling homeowners, including funds that will help defray tax
liability as a result of mortgage modification, forbearance or forgiveness. BAC will
also retain an independent monitor to determine whether it has complied with the
consumer relief portion of the settlement.
In addition to SIGTARP, the U.S. Attorney’s Office for the Southern District of
New York, the Federal Housing Finance Agency Office of Inspector General as part
of President Obama’s Financial Fraud Enforcement Task Force, RMBS Working
Group, and other Government agencies conducted investigations that led to this
settlement.
Former TierOne Bank Chief Credit Officer and Senior Vice President Pleads
Guilty in Scheme to Defraud Shareholders and Regulators – Don A. Langford

On September 9, 2014, Don A. Langford, a former Senior Vice President and
Chief Credit Officer of TARP applicant TierOne Bank (“TierOne”), a publicly
traded commercial bank formerly headquartered in Lincoln, Nebraska, pled
guilty to conspiracy to commit securities fraud, wire fraud, making false entries
in a bank’s books and records, as well as making false statements to a Federal
Government agency, in connection with his role in a scheme to defraud TierOne’s
shareholders and regulators. At sentencing, scheduled for December 5, 2014,
Langford faces up to five years in Federal prison on each count.
According to the criminal information filed with Langford’s plea agreement,
from at least 2009 to April 2010, in order to conceal TierOne’s true financial
condition, Langford conspired with senior executives and other employees to
falsely inflate the value of TierOne’s loan and real estate portfolio in reports to

23

24

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

its regulators, including the U.S. Securities and Exchange Commission (“SEC”)
and the Office of Thrift Supervision (“OTS”), as well as its outside auditors and
the investing public. In January 2009, after executing a supervisory agreement
with OTS that required TierOne to report information about its performance and
financial condition and to maintain a minimum capital position relative to its loan
portfolio and other assets, Langford and others intentionally misstated the value
of TierOne’s real estate portfolio by using outdated appraisals on properties and
rejecting new appraisals when those appraisals would have adversely impacted
TierOne’s reportable assets, revenue, and earnings. Furthermore, Langford and
others purposefully delayed seeking new appraisals so as to conceal the current
value of the collateral, and also restructured loan terms to disguise borrowers’
inability to make interest and principal payments timely. As a result of these
actions, Langford and his co-conspirators were able to hide millions of dollars in
losses from investors and regulators, all the while continuing to enrich themselves
through compensation and other benefits from TierOne.
In late 2008, TierOne submitted an application to the OTS seeking TARP
funding. Ultimately, TierOne withdrew its application and did not receive TARP
funds. TierOne Corporation, the holding company for TierOne Bank filed for
bankruptcy shortly after the bank was closed by OTS in June 2010.
This case was investigated by SIGTARP, the Federal Bureau of Investigation
and the Department of Justice Criminal Division’s Fraud Section. The SEC
also provided substantial assistance with the investigation. This prosecution
was brought in coordination with President Barack Obama’s Financial Fraud
Enforcement Task Force.
Former Senior Bank Officer & Head of Delaware Lending Pleads Guilty
to Massive Conspiracy, Hiding Bank’s True Financial Condition from Bank
Regulators and the Public – Brian D. Bailey, Wilmington Trust

On August 4, 2014, Brian D. Bailey, a Vice President and the former head
of Delaware commercial real estate and Delaware market manager at TARP
recipient Wilmington Trust Company (“Wilmington Trust”), pled guilty in the U.S.
District Court for the District of Delaware to conspiracy to commit an offense
against the United States (corruptly receiving gifts), as charged in a previouslyfiled Indictment, and to a one-count felony information also charging him with
conspiracy to commit an offense against the United States (causing a bank to make
false entries in its books and records). Wilmington Trust received $330 million
in TARP funds in December 2008 which remained outstanding until 2011 when
Wilmington Trust was acquired by TARP recipient bank, M&T Bank Corporation
(“M&T”). M&T itself also received more than $750 million in TARP funds in
2008.
According to the criminal information and plea agreement, from around March
2007 to around February 2010—both before and during the time Wilmington
Trust held TARP funds—Bailey, who, as Wilmington Trust’s Delaware market
manager, oversaw all lending in the state, conspired with Joseph Terranova
(a former Wilmington Trust loan officer and Division Manager for Delaware

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Commercial Real Estate) and others in a massive “delay and pray” and “extend and
pretend” scheme to hide from Federal bank examiners and the public hundreds
of millions of dollars in non-performing, past due commercial real estate loans
in order to conceal the bank’s true financial condition. Among other things, the
conspiracy involved extending credit to keep existing loan interest payments
current, thus causing the Bank to misrepresent its reporting of past due and nonperforming loans. These misrepresentations extended to, among others, the Federal
Deposit Insurance Corporation, agents and examiners appointed to examine the
bank, and the Board of Governors of the Federal Reserve System. The criminal
conduct enabled Wilmington Trust to file false statements of condition, or “Call
Reports,” with Federal financial regulators on a quarterly basis throughout 2009.
As described in the Information, each quarter in 2009, Wilmington Trust falsely
underreported its past due and nonperforming loans, including by:
•
•
•
•

$186 million in the first quarter of 2009
$234 million in the second quarter of 2009
$463 million in the third quarter of 2009
$373 million in the fourth quarter of 2009

As previously reported, in May 2013, in a separate case, Terranova pled guilty in
Federal court in the District of Delaware to the same underlying conduct.
Further, according to the plea agreement and a previously-filed Indictment,
Bailey also participated in a separate conspiracy with James Ladio, the former
Chief Executive Officer of MidCoast Community Bank and Chief Lending Officer
at Artisans’ Bank, where, over a twelve-year period, each provided multiple loans
to the other, through their respective positions at Wilmington Trust, Artisans’ and
MidCoast in excess of $1.5 million, under terms and conditions unavailable to the
general public. With these improper loans, Bailey financed, among other things,
three luxury cars and renovations to his home.
Bailey is scheduled to be sentenced on December 5, 2014, and he will face up
to five years in Federal prison for each count.
This case was investigated by SIGTARP, the U.S. Attorney’s Office for the
District of Delaware, the Federal Bureau of Investigation, the Internal Revenue
Service Criminal Investigation Division, and the Office of Inspector General for the
Board of Governors of the Federal Reserve System. This prosecution was brought
in coordination with the President Barack Obama’s Financial Fraud Enforcement
Task Force.
Former Loan Officer of TARP Bank Charged with Bank Fraud, Bank Bribery and
Illegally Benefitting in Customer Transactions – Peter W. Hayes, Wilmington Trust
Company

On July 15, 2014, Peter W. Hayes, a former Vice President and loan officer of
Wilmington Trust Company (“Wilmington Trust”) was charged in the United States
District Court for the District of Delaware in a seven-count indictment with bank
fraud, bank bribery, and fraudulently benefitting in a loan transaction.

25

26

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Wilmington Trust received $330 million in TARP funds in December 2008
which remained outstanding until 2011 when Wilmington Trust was acquired by
TARP recipient bank, M&T Bank Corporation (“M&T”). M&T itself also received
more than $750 million in TARP funds in 2008.
According to the indictment, from 2005 to 2009—before and during the time
Wilmington Trust held TARP funds—Hayes, a loan officer in the bank’s Delaware
Commercial Real Estate Division, engaged in several fraudulent transactions
with one of his customers, identified in the indictment as “Customer A,” one of
Wilmington Trust’s largest clients. Specifically, the indictment alleges:
• In 2005, Hayes corruptly solicited and accepted from Customer A investment
opportunities in Customer A’s real estate developments, in which Hayes
bought from Customer A two model homes from Customer A’s “Radish Farm”
Development. Then, through a “purchase-leaseback” arrangement with
Customer A, Customer A gave Hayes monthly rental income sufficient to pay
his mortgage plus expenses on the Radish Farm investment properties.
• In late 2008, after Hayes learned that his investment in the Radish Farm model
homes had soured, Hayes corruptly solicited and accepted a favorable loan of
more than $70,000 from Customer A to pay off Hayes’ investment losses.
• Without informing his supervisors of his financial relationship with Customer
A, Hayes continued as Customer A’s loan officer, which included approving the
disbursement of funds for Customer A projects, in which he invested or sought
to invest.
• Throughout 2008, Hayes knowingly caused Wilmington Trust loan funds to be
disbursed to Customer A for purposes that were not authorized by the bank’s
loan agreements with Customer A, and Hayes submitted false information in
support of draw requests to provide funding to Customer A, including to cover
overdrafts in Customer A’s bank account at Wilmington Trust.
• Also in late 2008, Hayes caused Wilmington Trust to lend funds without
loan committee approval to an investment company founded by Customer A’s
president, so that the investment company could purchase Customer A model
homes that would be leased back to Customer A or others. This included 100
percent financing for some of the model homes.
Ultimately, in 2012, Customer A’s loans were sold at a net loss of over 50
percent of the principal loan balance.
For each of the seven counts, if convicted, Hayes faces up to thirty years in
Federal prison and a five-year term of supervised release.
This case is being investigated by SIGTARP, the U.S. Attorney’s Office for the
District of Delaware, the Federal Bureau of Investigation, the Internal Revenue
Service Criminal Investigation Division, and the Office of Inspector General for the
Board of Governors of the Federal Reserve System.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Former Loan Officer of TARP Recipient Bank Sentenced for Role in Bank Fraud
and Approving Loans in Exchange for Kickbacks; Business Man Sentenced for
iii
Bank Bribery in Same Scheme – Christopher Tumbaga, Brian Headle, Colorado
East Bank and Trust

On September 30, 2014, and October 3, 2014, respectively, Christopher Tumbaga,
former loan officer at TARP recipient, Colorado East Bank and Trust (“CEBT”),
and Brian Headle, high school friends, both of Colorado Springs, Colorado, were
each sentenced in the U.S. District Court for the District of Colorado to 36 months
in Federal prison and ordered to pay restitution of $1,055,918, jointly and severally,
for their roles in a scheme to defraud CEBT. Tumbaga was sentenced for bank
fraud and illegally receiving kickbacks for fraudulently approving approximately
$1.2 million in loans for Headle in return for more than $60,000 in illegal
kickbacks, and Headle was sentenced for corruptly influencing a bank officer.
As previously reported, Tumbaga and Headle were charged jointly on
September 25, 2013. Tumbaga pled guilty on March 24, 2014, and, as part of his
plea agreement, agreed to a ban from future involvement in banking activities.
Headle pled guilty on June 26, 2014.
According to court documents, from March 2009 through July 2011, Tumbaga
used his position as a loan officer at CEBT to fraudulently approve over 14
loans to, and misapplied funds from a line of credit for the benefit of Headle.
Additionally, in March 2009, Headle contacted Tumbaga to discuss securing a loan
or line of credit from CEBT to finance Headle’s real estate development business.
Tumbaga then secured a $250,000 line of credit for Headle based on false financial
information that Tumbaga intentionally failed to verify. Shortly thereafter, Headle
and Tumbaga formed a partnership in which Tumbaga would secure fraudulent
loans for Headle’s benefit and, in return, Tumbaga would receive from Headle
kickbacks financed by profits from Headle’s real estate venture.
To help disguise that the loans were, in fact, for Headle’s benefit, Tumbaga
fraudulently obtained the loans in multiple names, including Headle’s company,
Headle’s wife, and her company. Later, when additional loans were needed to
maintain payments on outstanding loans, Tumbaga obtained still more fraudulent
loans in the name of Headle’s parents and step-parent. When approval for a loan
was needed from the bank’s president, Tumbaga forged the bank president’s
signature. Additionally, in one instance, Tumbaga withdrew $100,000 from another
bank customer’s line of credit and wired the money to Headle, all unbeknownst
to the bank customer. In all, Headle gave Tumbaga 11 kickbacks totaling over
$60,000, and, as a result of the kickbacks, Tumbaga secured approximately $1.2
million from CEBT for Headle’s benefit.
In February 2009, just before Tumbaga and Headle began their scheme,
ColoEast Bankshares, Inc., the parent company of CEBT, received $10 million
through the TARP Capital Purchase Program. Tumbaga and Headle’s conduct
resulted in a total loss of over $1 million to CEBT and the bank was later unable
to pay more than $1 million in dividends it owed to taxpayers. In July 2013, the
iii Statistics to support the Brian Headle sentencing will be reflected in the January 2015 Quarterly Report.

27

28

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

U.S. Department of the Treasury sold its stake in the company at auction for
approximately $9 million. In total, more than $2 million owed to Federal taxpayers
was lost on the investment.
This case was investigated by SIGTARP, the U.S. Attorney’s Office for the
District of Colorado, the Federal Deposit Insurance Corporation Office of
Inspector General, and the Federal Bureau of Investigation. This prosecution
was brought in coordination with President Barack Obama’s Financial Fraud
Enforcement Task Force.
Former Chief Financial Officer of Kansas City-Area Construction Company
Pleads Guilty to Defrauding TARP Recipient Bank of Blue Valley. Company Owner
Also Charged with Defrauding TARP Bank & Tax Evasion – Timothy P. Fitzgerald,
K. Kevin James

On August 4, 2014, Timothy P. Fitzgerald, a former Chief Financial Officer of
KC United, LLC, (“KC United”), a holding company for five construction services
companies in Kansas City, Kansas, pled guilty in U.S. District Court for the District
of Kansas to one count of conspiracy to commit bank fraud for his scheme to
defraud TARP recipient Bank of Blue Valley (“Blue Valley”) of Overland Park,
Kansas. In addition, on September 3, 2014, K. Kevin James and his son, Charlie
M. James, owners of KC United, were indicted in the U.S. District Court for the
District of Kansas. Specifically, Kevin James was indicted on ten counts of bank
fraud, eight counts of wire fraud, and one count of conspiracy to defraud the
United States, in connection with his roles in the scheme to defraud Blue Valley,
while Charlie James was charged with four counts of wire fraud, one count of
conspiracy to defraud the United States, three counts of tax evasion, and one count
of bankruptcy fraud. The indictment also alleges that Kevin and Charlie James
diverted prevailing wage fringe benefits owed to employees of their construction
companies for other purposes, including personal use and also conspired to evade
paying Federal employment taxes.
According to his plea agreement, Fitzgerald admitted—and the indictment
against Kevin James alleges—that Kevin James and Fitzgerald obtained business
loans from Blue Valley by hiding and falsely representing the failing financial
condition of KC United, resulting in a loss to the former TARP bank of more than
$875,000. More specifically, Fitzgerald admitted—and the indictment against
Kevin James alleges—that:
• Kevin James directed Fitzgerald to manipulate the company’s books and records
in order to get more money from Blue Valley. On ten occasions from 2008 to
2011, knowing that KC United was losing money and that it needed to show
a profit in order to get more money from Blue Valley, Kevin James instructed
Fitzgerald to manipulate KC United’s quarterly financial statements to hide
KC United’s operating losses and falsely reflect a profit. Relying on the false
information, Blue Valley increased KC United’s line of credit to $2.8 million and
renewed more than $1 million in outstanding loans.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

• In December 2008, knowing that its outside accounting firm would easily
discover the alterations that had been made to the quarterly financial
statements, Fitzgerald and Kevin James agreed that Fitzgerald would prepare an
annual financial statement incorporating the false quarterly profits, as well as a
fake cover letter on the outside accounting firm’s letterhead, later delivered to
Blue Valley, stating, unbeknownst to the accounting firm, that the accounting
firm had reviewed the financial statement.
Also in December 2008, Blue Valley Bank Corp., the holding company for Blue
Valley, received approximately $21.8 million in TARP funds. As noted above, the
scheme continued; ultimately, in April 2011, three KC United companies filed for
bankruptcy and in March 2012, Blue Valley sold the remaining outstanding KC
United loan, suffering a loss of more than $875,000. During the time it held TARP
funds, Blue Valley failed to make 18 required quarterly dividend payments to the
U.S. Treasury, totaling over $4.8 million, and, in October 2013, Treasury sold its
stake in the bank at auction and suffered a principal loss of more than $485,000.
At sentencing, Fitzgerald faces up to 30 years in Federal prison. If convicted,
Kevin James faces a maximum penalty of 30 years in Federal prison on each bank
fraud count; both defendants face up to 20 years on each wire fraud count, a
maximum penalty of five years for each count to conspire to defraud the United
States and Charlie James faces a maximum penalty of five years for each tax
evasion count, and a maximum penalty of five years for each bankruptcy fraud
count.
This case is being investigated by SIGTARP, the U.S. Attorney’s Office for the
District of Kansas, the Internal Revenue Service Criminal Investigation Division,
the U.S. Department of Labor – Office of the Inspector General, and the U.S.
Department of Labor Employee Benefits Security Administration. This prosecution
was brought in coordination with President Barack Obama’s Financial Fraud
Enforcement Task Force.
Kansas City-area Businesswoman Charged with Defrauding TARP Bank – Brenda
Wood, Farmers Bank & Trust

On August 6, 2014, Brenda Wood, an owner of several Kansas City, Missouri,
and Bonner Springs, Kansas, businesses, was indicted on five counts of bank
fraud, one count of theft from an employee benefit program, and four counts of
willful violations of the Employee Retirement Income Security Act (“ERISA”) in
connection with loans she received from TARP recipient, Farmers Bank & Trust,
N.A. (“Farmers Bank”), of Overland Park, Kansas. Wood was arrested on August 7,
2014, by SIGTARP Federal agents and their law enforcement partners in Lansing,
Kansas.
Farmers Enterprises, Inc. (“Farmers Enterprises”), of Great Bend, Kansas, the
parent company for Farmers Bank, received $12 million in TARP funds in June
2009. In November 2012, Farmers Enterprises exited TARP by partially repaying
the U.S. Treasury to redeem the original TARP funding. The bank’s repurchase of

29

30

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

the shares at a discount resulted in a principal loss of approximately $500,000 on
the TARP investment.
According to the indictment, the crimes occurred while Wood owned several
businesses including one in Kansas City, Missouri – Professional Cleaning and
Innovative Building Services, Inc. (“PCI”) – and three in Bonner Springs, Kansas
– Action Real Estate Services, LLC; G&W Investments, LLC; and Riverview
Crossings, LLC. The indictment alleges that, from approximately June 2006 to
June 2010, Wood obtained loans for herself and her companies through Farmers
Bank by making false representations and submitting falsified documents to the
bank. Specifically, the allegations set forth in the indictment include, among others,
that:
• Wood obtained a $2.5 million loan from Farmers on behalf of Riverview
Crossings to purchase undeveloped property in Bonner Springs in part by
forging the signature of a second mortgage holder, fabricating the notarization,
and, in doing so, releasing the deed. This $2.5 million loan defaulted.
• Wood submitted a series of fourteen falsified invoices totaling more than
$100,000 to support fraudulent draws on the Riverview Crossings loan.
Ultimately, despite approximately $900,000 in disbursements to develop the
Bonner Springs property, it remained largely undeveloped.
• In obtaining a loan on behalf of PCI to buy property in Basehor, Kansas (the
“Basehor loan”), Wood fraudulently inflated the purchase price to make it
appear that the loan met the bank’s loan-to-value ratio requirement of 75
percent. In truth, however, the loan accounted for approximately 97 percent of
the purchase price.
• Wood obtained a $350,000 line of credit in part by fraudulently representing to
the lender that her company, PCI, was awarded a contract to provide cleaning
services at an Internal Revenue Service building in Kansas City, Missouri. In
fact, however, her company was not even a finalist for the contract.
• Wood diverted more than $200,000 from an escrow account for PCI to her
personal account.
In connection with the 401(k) and ERISA-related charges, the indictment
alleges, among other things, that:
• Wood set up a 401(k) plan for PCI and embezzled more than $30,000 from the
plan.
• Wood also failed to file annual financial reports for the PCI 401(k) plan.
If convicted, Wood faces up to 30 years in Federal prison on each of the bank
fraud charges; a five year prison term on the charge of theft from an employee
benefit program; and a ten-year prison sentence on each count of ERISA violations.
Additionally, as previously reported, on June 25, 2014, Michael W. Yancey, a
former Farmer’s Bank Senior Vice President who, during the relevant time period,
served as Wood’s loan officer (and in August 2010 went to work for Wood directly)

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

pled guilty to one count of conspiring with Wood to commit an offense against the
United States (making a false statement on a loan application) in connection with
the false statements regarding the Basehor loan. At sentencing, Yancey faces up to
five years imprisonment.
This case is being investigated by SIGTARP, the U.S. Attorney’s Office
for the District of Kansas, the Federal Bureau of Investigation, and the U.S.
Department of Labor Office of Inspector General and Employee Benefits Security
Administration.
California Man Convicted of Multimillion Dollar Foreclosure Rescue Scam that
Bilked More than 1,000 Distressed Homeowners. Co-conspirators also plead
guilty. — Alan David Tikal, Tamara Tikal, Ray Kornfeld / KATN Trust

On September 15, 2014, after a trial before the United States District Judge Troy
L. Nunley of the United States District Court for the Eastern District of California,
Alan David Tikal was convicted on 11 counts of mail fraud and one count of money
laundering in a mortgage fraud scheme that victimized more than 1,000 distressed
homeowners in California and other states, out of more than $5.8 million.
According to evidence presented at trial, between January 7, 2010, and August
20, 2013, Tikal operated a business known as KATN (which stood for “Kicking
Ass, Taking Names”). Tikal and his associates targeted homeowners experiencing
difficulties making their monthly mortgage payments, many of whom did not speak
English as their first language. Tikal and his associates promised homeowners that
their outstanding mortgage debt would be reduced by 75 percent, falsely claiming
Tikal was a registered private banker with access to an enormous line of credit and
the ability to pay off homeowners’ mortgages in full through a purported mortgage
relief program which, Tikal falsely claimed, had a tremendous record of success in
saving homeowners from foreclosure. Tikal also told homeowners that in return
for various fees and payments, their existing loans would be paid in full, and the
homeowners would then have new loans with Tikal that would be only 25 percent
of the original loan and the original lender would have no way to foreclose on their
properties.
In truth, however, there was not a single instance in which the so-called
mortgage relief program had homeowner’s mortgage debt paid, forgiven or
otherwise extinguished. Instead, all of the purported “loan” payments paid to Tikal
were simply spent by himself, his family and his associates for personal use. Tikal
and his associates convinced more than 1,000 homeowners in California and
other states to participate in the program. Relying on the misrepresentations made
by Tikal, many of these homeowners stopped making payments on their existing
mortgages and lost their homes to foreclosure. Of the more than $5,800,000 in
fees and monthly payments homeowners deposited into the program, more than
$2,500,000 was paid into accounts controlled by Tikal and his family.
Tikal, who continued to direct the scheme even after having been incarcerated
since his October 2012 indictment and detainer on these charges, is scheduled to
be sentenced on December 11, 2014. He faces a maximum statutory penalty of 30
years in prison.

31

32

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Additionally, co-defendants Tamara Tikal and Ray Kornfeld pled guilty on
August 14 and 28, 2014, respectively, to conspiracy to commit mail fraud in
connection with their roles in the scheme, and are awaiting sentencing. At
sentencing each faces up to five years in Federal prison.
As previously reported Alan Tikal was arrested by SIGTARP agents and their
law enforcement partners in September 2012 for his role in the scheme and, in
October 2012, was indicted by a Federal grand jury in the United States District
Court for the Eastern District of California on mail fraud and money laundering
charges also in connection with the fraudulent mortgage rescue operation. As also
reported, on September 11, 2013, additional Federal charges were filed against
Alan Tikal. Tamara Tikal and Kornfeld were also indicted for their roles in the
scheme and were arrested by SIGTARP agents and their law enforcement partners
on September 12, 2013.
This case was investigated by SIGTARP, United States Attorney’s Office for the
Eastern District of California, California Attorney General’s Office, the Internal
Revenue Service - Criminal Investigation, the California Department of Justice,
and the Stanislaus County District Attorney’s Office. This prosecution was brought
in coordination with President Barack Obama’s Financial Fraud Enforcement Task
Force.
Three Charged in Massive $18.5 Million Nationwide Mortgage Modification
Scheme – Ped Abghari, Dionysius Fiumano & Justin Romano, Esq.

On August 5, 2014, executives Ped Abghari, a/k/a “Ted Allen,” and Dionysius
Fiumano, a/k/a “D,” as well as attorney and co-conspirator, Justin Romano, Esq.,
were each charged in the United States District Court for the Southern District
of New York with wire fraud and conspiracy to commit wire fraud, for engaging
in a mortgage modification scheme that allegedly defrauded more than 8,000
homeowners in all 50 states out of over $18.5 million, in what is believed to be the
largest mortgage modification scheme ever charged. On August 7, 2014, SIGTARP
agents and their law enforcement partners arrested Abghari and Fiumano in Irvine,
California, and, on the same day, Romano was arrested by SIGTARP agents and
their law enforcement partners in Blue Point, N.Y.
According to the indictment, Abghari was a co-president and owner of
an Irvine, California, company that offered purported mortgage modification
services (the “Telemarketing Firm”) and Fiumano was a senior manager of the
Telemarketing Firm directly responsible for training and overseeing its salespeople
and telemarketers. Romano held himself out as the president of two purported law
firms (the “Purported Law Firms”), based in Holbrook, New York, and Sayville,
New York, respectively, which purportedly offered mortgage modification services in
conjunction with the Telemarketing Firm.
From at least January 2011 through May 2014, Abghari, Fiumano and Romano,
through the Telemarketing Firm and the Purported Law Firms, engaged in a
massive scheme to defraud homeowners in dire financial straits who were seeking
relief through the Home Affordable Modification Program (“HAMP”), a program
created by the U.S. Treasury as a result of the financial crisis and collapse of

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

the housing bubble in 2008, and other mortgage relief programs. HAMP, which
was funded by TARP, permits qualified homeowners to obtain mortgage relief.
Specifically, HAMP seeks to prevent foreclosure by modifying troubled loans to
achieve monthly payments the homeowner can afford.
Any homeowner may apply for HAMP through his or her mortgage provider by
completing a short form—readily available online as well as in many local banks—
and submitting it, along with supporting paperwork, to the homeowner’s mortgage
provider. Furthermore, submitting an application for HAMP is—by law—free
of charge to the homeowner, and virtually all mortgage providers are required to
participate in the HAMP program and accept HAMP applications. HAMP also
sets guidelines for lenders to follow in determining eligibility, such as those based
on the homeowner’s income and the principal balance remaining on the mortgage.
Only a homeowner’s lender may determine the homeowner’s eligibility for a HAMP
modification and, if appropriate, the homeowner’s modified interest rate and
monthly mortgage payment.
Through a series of false and fraudulent representations, the defendants duped
thousands of homeowners into paying thousands of dollars each in up-front fees in
exchange for little or no service from the defendants or their companies.
To perpetrate the scheme, Abghari and Fiumano, through the Telemarketing
Firm, purchased thousands of “leads” consisting of the name, address, and other
contact information of homeowners who had fallen behind in making home
mortgage payments, and then caused the Telemarketing Firm to send false and
fraudulent solicitation letters by e-mail to the homeowners. These solicitations
misled the homeowners into believing that their mortgages were already under
review for a HAMP mortgage modification and that new, modified rates had already
been approved by the homeowners’ lenders. Additionally, at Abghari, Fiumano,
and Romano’s direction, the sales staff called homeowners and/or answered
homeowners’ telephone calls and, in an effort to convince the homeowners to
pay up-front fees, the defendants regularly caused various false and fraudulent
statements to be made to homeowners, including that:
• the homeowners were retaining a “law firm” and an “attorney” who would
complete the HAMP application and negotiate aggressively on the homeowners’
behalf with lenders;
• the defendants would “pre-approve” the homeowners for a guaranteed
modification through HAMP;
• the defendants employed underwriters who would calculate and guarantee a
new, modified rate and monthly mortgage payment; and
• the defendants’ mortgage modification services were free and the up-front fees
would be paid directly to homeowners’ lenders.
In truth and in fact, however, and as Abghari, Fiumano, and Romano well
knew, all of these representations were false and fraudulent. As the defendants
knew, neither they nor any of their employees could pre-approve the homeowners
or guarantee any of the homeowners a mortgage modification or new monthly

33

34

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

payment. Moreover, defendants’ services were in no way free; instead, defendants
kept all of the fees paid by homeowners and provided none of it to the homeowners’
lenders. Additionally, as the defendants knew, neither the Telemarketing Firm
nor the Purported Law Firms provided homeowners with an attorney or any
sort of legal assistance, and they frequently did little more than complete the
Government-sponsored HAMP application which, as noted, the homeowners could
have obtained and completed on their own, free of charge. In certain cases, as
the volume of homeowners paying thousands of dollars to “retain” the defendants’
services swelled, the defendants and their employees did nothing at all in exchange
for homeowners’ money.
Finally, as customer complaints mounted, Abghari, Fiumano, and Romano
undertook to cover up their fraudulent scheme by changing the names of the
Telemarketing Firm and Purported Law Firms. For instance, Abghari emailed
employees of one of the Purported Law Firms and explained that “[t]he main
reason we’re being slammed . . . is because we waited too long to change names.
I normally change names every nine months to keep things cool and have all
agencies off our backs. Within the next month or so you’ll see a major slow down
on complaints because we no longer do business under [the name of the Purported
Law Firm] or [the name of the Telemarketing Firm.]”
If convicted, the defendants each face up to 20 years in Federal prison for each
of the counts.
This case is being investigated by SIGTARP and the U.S. Attorney’s Office
for the Southern District of New York, and in coordination with President Barack
Obama’s Financial Fraud Enforcement Task Force.
New York Businessman Charged in $146 Million Loan Fraud Scheme, Wire
Fraud, Tax Fraud and Witness Tampering – Selim Zherka

On September 18, 2014, after his arrest by SIGTARP and its law enforcement
partners, Selim Zherka, a/k/a “Sam Zherka,” a/k/a “Sammy Zherka,” of Somers,
N.Y., was indicted by a Federal grand jury in the U.S. District Court for the
Southern District of New York for submitting multiple false loan applications to
banks, tax fraud, wire fraud, and witness tampering in connection with his years’
long schemes through which he obtained more than $146 million. Zherka’s victims
included North Fork Bank – later purchased by TARP recipient bank Capital
One Financial Corporation – from which he allegedly swindled more than $36.5
million.
According to the indictment, from November 2005 through 2008, Zherka
obtained loans totaling more than $146 million from three banks – North Fork
Bank (now Capital One), Sovereign Bank (now Santander), and Signature Bank
– for the purchase and/or refinancing of apartment house complexes in New
England, Tennessee, New Jersey, and New York by grossly inflating the purchase
prices of the real estate he was acquiring, grossly exaggerating the amount of the
down payments he was making toward those real estate purchases, and also lying
about his assets, his income, his tax returns, and the nature and circumstances of a
court judgment against him for assault and breach of contract from 2000.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

The indictment charges Zherka with wire fraud in connection with his scheme
to defraud the judgment creditor in connection with the 2000 judgment finding
him liable by a New York State Supreme Court jury in Manhattan for assaulting
that individual and for breaching a contract with him.
In addition, the indictment charges Zherka with perpetrating a long standing
tax fraud scheme. Specifically, Zherka is alleged to have repeatedly submitted
fraudulent tax returns to the Internal Revenue Service (“IRS”) that understated
his capital gains and overstated his depreciation expenses on tax returns for the
real estate holding companies in which he was a partner which, in turn, owned
the above apartment housing complexes thus reducing their tax liabilities. The
indictment also charges that Zherka obstructed the IRS by, among other means,
failing to file personal tax returns for over a decade.
Finally, the indictment charges Zherka with tampering with witnesses in the
grand jury’s investigation of this matter.
If convicted, Zherka faces the following maximum penalties:
• for each of the 11 counts of submitting a false loan application, 30 years in
prison;
• for the count of wire fraud and the count of witness tampering, 20 years in
prison;
• for the count of conspiracy to obstruct the IRS and violate tax laws, five years in
prison; and
• for each of the 10 counts of making/subscribing to false tax returns, the 10
counts of aiding/assisting in the preparation of false tax returns, and the count
of attempting to interfere with the administration Internal Revenue laws, three
years in prison.
Additionally, Zherka faces potential criminal forfeitures totaling $146 million,
restitution, and the costs of prosecution.
This case is being investigated by SIGTARP, the U.S. Attorney’s Office for the
Southern District of New York (White Plains Division), the Federal Bureau of
Investigation, and the Internal Revenue Service – Criminal Investigation.
New Jersey Real Estate Investor Pleads Guilty For Leading Role in Multi-Million
Dollar Conspiracy to Defraud TARP Recipient Banks – Jose Luis Salguero Bedoya

On September 10, 2014, in the U.S. District Court for the District of New
Jersey, Jose Luis Salguero Bedoya, a/k/a Jose Salguero, pled guilty to one count of
conspiracy to commit wire fraud affecting a financial institution in connection with
a long-running, large-scale mortgage fraud scheme that caused millions of dollars
of losses.
According to court documents, from March 2008 through July 2012, Salguero,
a real estate investor who owned two New Jersey-based real estate companies,
and his co-defendants conspired to submit fraudulent mortgage loan applications
and related documents to lenders, including TARP recipient banks, in order to
obtain loan proceeds which they used to enrich themselves. Specifically, Salguero

35

36

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

admitted that he and his co-defendants perpetrated the scheme by, among other
means:
• negotiating fraudulent “short sale transactions” by intentionally misrepresenting
who was purchasing the properties, and the sources and distributions of funds,
and intentionally failing to file deeds after the short sales were arranged to
conceal the transactions from the following mortgage lender;
• obtaining false appraisal reports from a co-conspirator, Paul Chemidlin, Jr., who
was not a licensed appraiser, to support inflated property values for mortgage
loans in larger amounts; and
• obtaining mortgage loans through fake or “straw” buyers.
Salguero also paid his co-conspirators for their roles, using his real estate
companies to disburse fraudulently obtained funds.
At sentencing, Salguero faces up to thirty years in Federal prison. Further, as
part of his plea agreement, Salguero agreed to make full restitution for all losses
resulting from the scheme (jointly with his co-defendants), and to forfeit assets,
including a Florida home in a gated community and other Florida property, six New
Jersey homes, and over $35,000 in life insurance benefits.
As previously reported, on January 23, 2013, as part of a wide-scale mortgage
fraud investigation in New Jersey, Salguero and ten other individuals were arrested
by SIGTARP agents and their law enforcement partners and charged with
conspiracy to commit bank fraud relating to their roles in fraudulent mortgage
schemes. In addition to Salguero, those arrested were: Christopher Woods,
Matthew Amento, Carmine Fusco, Kenneth Sweetman, Joseph Divalli, Paul
Chemidlin, Jr., Delio Countinho, Christopher Ju, Yazmin Soto-Cruz, and Jose
Martins.
This case is being investigated by SIGTARP, the U.S. Attorney’s Office for the
District of New Jersey, the Federal Bureau of Investigation, the United States Postal
Inspection Service, and the Department of Housing and Urban Development
Office of Inspector General as part of the New Jersey Mortgage Fraud Task Force.
Four Californians Indicted for Nationwide Mortgage Modification Scam Targeting
Hundreds of Struggling Homeowners – Samuel Paul Bain, Aminullah Sarpas,
Damon Grant Carriger, & Louis Saggiani (U.S. Homeowners Relief)

On July 22, 2014, the owners and principals of U.S. Homeowners Relief, of
Orange County, California, Samuel Paul Bain, a/k/a “Paul Bain,” Aminullah
Sarpas, a/k/a “Amin Sarpas” and “David Sarpas,” as well as Damon Grant Carriger
(the company’s principal sales manager), and Louis Saggiani (the company’s
manager and chief accountant) were charged in the United States District Court
for the Central District of California in connection with a fraudulent mortgage
modification scam in which the defendants, through U.S. Homeowners Relief
and several related entities, allegedly offered bogus loan modification programs
to hundreds of financially distressed homeowners across the United States. As a
result of the defendants’ scheme, these distressed homeowner-victims lost millions

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

of dollars and many also lost their homes in subsequent foreclosure proceedings.
SIGTARP agents and their law enforcement partners arrested Sarpas, Carriger, and
Saggiani on July 22, 2014. At the time of the indictment, Bain was in state custody.
All four defendants are charged with conspiracy, 21 counts of mail fraud, and
two counts of wire fraud. Bain, Sarpas, and Saggiani are also charged with an
additional five counts of mail fraud and two counts of wire fraud. In addition, Bain
is also charged with two counts of money laundering having allegedly routed a total
of $60,000 in illicit funds through an account held at TARP recipient Wells Fargo
Bank.
According to the indictment, the four defendants operated a series of
telemarketing “boiler rooms” that, in exchange for substantial up-front fees,
purportedly offered home loan modification services to distressed homeowners
in the wake of the 2008 financial crisis and housing market collapse. From late
2008 to early 2010, the defendants operated multiple offices in California under
a series of company names, including, among others, Greenleaf Modify, U.S.
Homeowners Relief, Waypoint Law Group, and American Lending Review. When
pressure from growing customer complaints about the purported scam mounted
at the Better Business Bureau or attracted attention from state regulators such as
the California Department of Justice, the defendants would shut down, and change
each company name. Further, when served with a cease and desist order from the
California Department of Real Estate prohibiting the defendants from collecting
advance fees, the defendants deliberately ignored the order and continued
collecting advanced fees from struggling homeowners in exchange for purported
loan modification services.
As alleged in the indictment, the defendants and their associates used a
consistent sales pitch throughout the scheme. Their advertising materials and
telemarketers convinced struggling homeowners to pay upfront fees ranging
from approximately $1,450 to around $4,200 by falsely: (i) promising that the
homeowners were highly likely to secure mortgage modification, including a
reduced interest rate as low as two percent and/or a reduction of principal; (ii)
touting a 97% success rate in securing modifications; and (iii) advertising a
complete money-back guarantee, as well as an affiliation with Federal housing
support programs. For example, the companies’ marketing materials falsely implied
that they were affiliated either with a Government entity or a Government program
designed to offer homeowners mortgage debt relief, and sometimes made specific
references to actual Government websites such as www.MakingHomeAffordable.
gov and displayed official Government logos.
Telemarketers associated with the companies also claimed that the mortgage
relief services were part of the “Obama Act.” In addition, to create the false and
misleading impression that the defendants’ entities were preparing to negotiate with
lenders on the victims’ behalf, the defendants allegedly asserted that one or more
of the entities were licensed California real estate brokers and that homeowners’
payments would be placed in a trust account, not to be withdrawn until the loan
modification services were in fact performed. The defendants also often claimed
that specific attorneys were assigned to work on homeowners’ individual cases.

37

38

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Finally defendants falsely claimed that, to maximize the likelihood of obtaining a
mortgage modification, homeowners should stop making mortgage payments on
their existing mortgages and refrain from contacting their lenders.
According to the indictment, however, as the defendants well knew, all of
these claims were false and/or materially misleading. Despite their promises that
homeowners would receive better loan terms, the vast majority of the hundreds
of victims received no favorable loan modifications. In fact, several of the victims
learned from their mortgage lenders that the defendants’ companies had never
made any contact on the homeowners’ behalf. Furthermore, the defendants’
companies were neither affiliated with any Government program, nor were they
licensed real estate brokers. In addition, the customers’ funds were generally spent
on defendants themselves, payments to sales people and other business expenses,
and were not placed in trust accounts as was promised. Attorneys did not give
personal attention to individual victims and instead were paid by defendants to
write substantially identical form letters to some lenders. With respect to the
purported money-back guarantee, the defendants routinely used stalling tactics or
just ignored homeowners’ repeated demands for refunds after the homeowners did
not receive the promised loan modifications.
The defendants are scheduled for a June 16, 2015, trial. If convicted, each of
the defendants faces up to five years in Federal prison for the conspiracy count, as
well as 20 years in prison for each of the mail fraud, wire fraud, and (with respect
to Bain) money laundering counts.
This case is being investigated by SIGTARP and the U.S. Attorney’s Office for
the Central District of California, the United States Postal Inspection Service,
and the Internal Revenue Service – Criminal Investigation. This prosecution
was brought in coordination with President Barack Obama’s Financial Fraud
Enforcement Task Force.
California Con Man and Former “America’s Most Wanted” (TV Show) Fugitive
Indicted for Brazen Investment Fraud Schemes — Jerome Arthur Whittington

On August 29, 2014, the U.S. District Court for the Central District of
California unsealed an indictment against Jerome Arthur Whittington, a/k/a Jerry
Whittington, charging him with two counts of wire fraud in connection with two
brazen investment schemes in which he feigned friendship and romantic interest
and assumed fake identities to defraud his victims out of approximately $165,000.
In both cases, Whittington allegedly routed victims’ funds through TARP recipient
banks including Bank of America and U.S. Bank.
If convicted, Whittington—who, in 1989, was featured on the television show
“America’s Most Wanted” having been a fugitive for three years for impersonation
and transportation of stolen property (among other crimes), and who is currently
incarcerated in Louisiana—faces up to 30 years in Federal prison on each count.
As alleged in the indictment, in the first scheme, from January 2008 through
September 2010, Whittington befriended the victim and expressed romantic
interest while holding himself out as a wealthy real estate investor and an attorney;
in reality, however, as Whittington well knew, Whittington was neither wealthy,

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

a real estate investor, nor an attorney. Under these false pretenses, Whittington
convinced the victim to sell her stock market investments and give him the
proceeds, approximately $116,965, to invest in an undeveloped lot in Palm
Springs, California. Whittington did not invest in the undeveloped property nor
any real estate as he had promised; instead, he spent the victim’s funds on personal
expenses.
As further alleged, in the second scheme from November 2008 to around
September 2012, Whittington befriended the victim, holding himself out as
a wealthy businessman who owned, among other things, a jet airplane and a
company, Desert Films, which Whittington claimed set up tracks for cameras used
in filming movies. In fact, however, as Whittington well knew, he was not wealthy,
did not own a jet airplane, and did not own any company called Desert Films that
was involved in the film industry. Once he gained the victim’s trust, Whittington
introduced the victim to another company, Sesma, which Whittington said had
developed a new internet browser being used in China, and that Whittington
had been offered to become the president of Sesma. After claiming that he had
already invested $250,000 of his own money in Sesma, Whittington offered
the victim an opportunity to invest in Sesma stock and manage the launch of a
medical application of the web browser. Whittington convinced the victim to invest
$48,340 and then strung the victim along, falsely claiming that the investment had
become profitable and the victim would be paid as soon as the victim received a
security clearance from Sesma. Whittington, however, had not in fact applied any
of the victim’s money towards the purported purchase of stock in Sesma, rather,
Whittington used the money for personal expenses.
This case is being investigated by SIGTARP, the U.S. Attorney’s Office for the
Central District of California, and the Federal Bureau of Investigation.
Former Federal Employee Pleads Guilty and Sentenced for Accessing
Government Website Servers Hosting Key TARP Homeownership Assistance
Program Website, www.CheckMyNPV.com, Without Authorization – Sathish
Kumar Chandhun Rajendran

On July 10, 2014, in the United States District Court for the Eastern District of
Virginia, Sathish Kumar Chandhun Rajendran, a former Information Technology
term employee at Fannie Mae pled guilty to engaging in unauthorized access to
Government servers that hosted a Fannie Mae website used to support Federal
mortgage loan modification programs, including the Home Affordable Modification
Program (“HAMP”).
On October 3, 2014, Rajendran was sentenced to three years supervised release
and ordered to pay approximately $70,000 in restitution. Rajendran pled guilty
to a one-count criminal information charging him with unauthorized access to
a protected computer causing damage. As part of his plea agreement, Rajendran
agreed—for a three-year period—to refrain from participating as an employee,
contractor, or subcontractor in any Government contract requiring clearance. The
court also ordered Rajendran to forfeit property involved in the offense, specifically,
a Hewlett Packard Laptop and a Toshiba Hard Drive.

39

40

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

According to a statement of facts filed with the plea agreement, while at Fannie
Mae, Rajendran was assigned to develop the www.CheckMyNPV.com website,
which was created by the Department of the Treasury and the Department of
Housing and Urban Development (“HUD”) under the Dodd-Frank Wall Street
Reform and Consumer Protection Act in connection with the Government’s various
homeownership assistance programs under Making Home Affordable (“MHA”).
The free online tool provided by the www.CheckMyNPV.com website, operated
by Fannie Mae on behalf of MHA, allows struggling homeowners to check their
eligibility to participate in HAMP, a Federal Government program designed to
prevent mass foreclosures by calculating the net present value—or “NPV”—of their
homes.
After his termination from Fannie Mae in August 2013, Rajendran repeatedly
used administrator credentials to access Federal Government servers and make
unauthorized changes to the CheckMyNPV website, including disabling the
website’s online tool for checking HAMP eligibility. As a result of his actions,
Rajendran caused damage and loss to Fannie Mae of approximately $70,000.
This case was investigated by SIGTARP, the U.S. Attorney’s Office for the
Eastern District of Virginia, and the Federal Housing Finance Agency Office of
Inspector General. This prosecution was brought in coordination with President
Barack Obama’s Financial Fraud Enforcement Task Force.
Former Senior Vice President & Senior Loan Officer of TARP Bank Admits to
Willful Misapplication of Bank Funds – Braxton L. Sadler, TNBank

On August 27, 2014, Braxton L. Sadler, a former Senior Vice President and Senior
Loan Officer of TARP recipient bank TNBank, of Oak Ridge, Tennessee, pled
guilty in the United States District Court for the District of Eastern District of
Tennessee to willfully misapplying bank funds in connection with a long running
scheme. At sentencing, scheduled for December 2, 2014, Sadler faces up to one
year in Federal prison, followed by up to one year of supervised release.
According to court documents, Sadler admitted that for multiple years he
willfully processed loans for a borrower without investigating the borrower’s ability
to repay the loan and then allowed the loan proceeds to be used for the borrower’s
failed construction project, rather than for their stated purpose. In addition, Sadler
lent personal funds to the borrower without ever disclosing these loans to TNBank
or listing the loans on internal TNBank documents as debts the borrower owed and
which impacted the borrower’s ability to repay the TNBank loans. Sadler also made
payments with personal funds on several borrowers’ accounts, causing TNBank
records to reflect that those customers were timely with payments when in fact
they were not. Finally, Sadler admitted that his actions resulted in misstatements
on the bank’s application for TARP funds.
In December 2008, Tennessee Valley Financial Holdings, Inc. (“Tennessee
Valley”), the parent company of TNBank, received $3 million in taxpayer funds
through TARP. During the time TARP funds were outstanding, Tennessee Valley
missed a total of thirteen required dividend and interest payments, totaling
$531,375. In April 2013, the U.S. Department of the Treasury sold its stake in

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

the company at auction at a loss of more than $40,000. In all, $575,705 owed to
Federal taxpayers was lost on the investment.
This case is being investigated by SIGTARP, the U.S. Attorney’s Office for the
Eastern District of Tennessee, and the Federal Bureau of Investigation.
Missouri Businessmen Sentenced for Defrauding TARP Recipient Excel Bank –
James Crews and Michael Hilbert

On August 13, 2014, business executives James Crews and Michael Hilbert
were each sentenced in the United States District Court for the Eastern District
of Missouri to five years’ probation, having pled guilty on April 7, 2014, to bank
fraud for their roles in defrauding TARP recipient Excel Bank. The sentence also
required Crews and Hilbert jointly and severally to pay restitution of approximately
$30,000 to the Federal Deposit Insurance Corporation (“FDIC”), and banned the
defendants from being self-employed or employed as a consultant, as well as being
involved in the creation, operation, or management of any business.
As previously reported, according to court documents, Crews and Hilbert,
who jointly operated a real estate rental business in Missouri, admitted to making
several large fraudulent construction draw requests with respect to “rehab” or
“fix funds” specifically set aside in escrow for repairs to rental homes. The bank
disbursed the “fix funds” in reliance on multiple false claims that work had been
done on various rental properties. In reality, however, inspections by the bank
revealed that the work was not performed and Crews and Hilbert used the funds
for other purposes. Shortly after the funds were disbursed in 2010, the loans,
totaling over $2.6 million lent by Excel Bank, went into default.
In May 2009, Investors Financial Corporation, the parent company of Excel
Bank, received $4 million in TARP funds. On October 19, 2012, Excel Bank failed
and was closed by state and Federal regulators. As a result of the failure, the entire
$4 million TARP investment was lost as was more than $900,000 in TARP-related
missed dividend and interest payments the bank owed Treasury. The FDIC, which
became Excel Bank’s receiver when it closed, also lost $40.9 million.
This case was investigated by SIGTARP, the U.S. Attorney’s Office for the
Eastern District of Missouri, and the Federal Bureau of Investigation.
Identity Theft Perpetrator Admits to Defrauding TARP Recipient Bank of America,
N.A., in connection with False Application for Federal Assistance under TARP;
Sentenced to Prison and Deported – Eduardo Garcia Sabag

On September 26, 2014, having pled guilty on August 11, 2014, to one count of
submitting false mortgage modification application to a Federally insured bank,
Eduardo Garcia Sabag, a Mexican national residing in Wichita, Kansas, was
sentenced in U.S. District Court for the District of Kansas for one count of making
false bank entries, reports, and transactions in connection with his scheme to
defraud TARP recipient Bank of America by using a Social Security number that
was not his own to obtain a mortgage modification through the Home Affordable
Modification Program (“HAMP”), the TARP-funded housing support program.

41

42

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Sabag was arrested on June 26, 2014, and remained in Federal custody until
his sentencing. On September 26, 2014, Sabag was sentenced to time served –
approximately 92 days in Federal prison – and was remanded to the custody of the
U.S. Marshals for removal to Mexico (which, as part of his plea agreement, Sabag
agreed to not challenge).
According to court documents, in 2002, Sabag submitted a loan application in
order to purchase a home in Wichita, Kansas, and provided another person’s social
security number. Using this false information, Sabag obtained a mortgage on the
home from TARP recipient Bank of America, N.A. Then, in August 2010, Sabag
applied for and ultimately received a mortgage modification through the U.S.
Treasury’s HAMP program. To qualify for assistance through HAMP, a homeowner
must complete and return to the mortgage servicer a Request for Modification and
Affidavit (“RMA”), which is a three-page application. The RMA requires identifying
information as well as details about the applicant’s income and assets; it also
includes a certification, signed by the homeowner, that all information submitted
on the application is truthful and an acknowledgement that knowingly submitting
false information may be a violation of Federal law. Despite this, Sabag, who is
not a U.S. citizen and is ineligible for the assignment of a Social Security number,
fraudulently used the Social Security number on the HAMP application to obtain
the mortgage modification.
Bank of America received $15 billion in Federal funds through TARP on
October 28, 2008; an additional $10 billion on January 9, 2009; and $20 billion on
January 16, 2009. It repaid taxpayers’ combined $45 billion TARP investment on
December 9, 2009.
This case was investigated by SIGTARP, the U.S. Attorney’s Office for the
District of Kansas, the Social Security Administration’s Office of the Inspector
General, and The Department of Homeland Security’s Immigration and Customs
Enforcement.
Mortgage Modification Fraudsters Ordered to Pay Restitution for Defrauding
Homeowners in Nationwide Fraud Scheme – Christopher S. Godfrey, Dennis
Fischer, and Vernell Burris, Jr., & Home Owners Protection Economics, Inc.
(“HOPE”)

On August 22, 2014, in the United States District Court for the District of
Massachusetts, Christopher S. Godfrey, Dennis Fischer, Vernell Burris, Jr., and
Brian M. Kelly, president, vice president, primary telemarketer trainer, and chief
telemarketer (and telemarketer trainer), respectively, of Home Owners Protection
Economics (“HOPE”) were, together, ordered to pay more than $110,000 in
restitution to approximately 180 victims for their roles in defrauding numerous
distressed homeowners in a nationwide $4 million mortgage modification scam
through HOPE. The restitution order follows the previously reported February
2014 sentencing of Godfrey and Fischer, each of whom received a seven-year
prison term followed by three years of supervised release for their leading roles
in the scheme. In November 2013, following a two-week trial, a Federal jury
convicted Godfrey and Fischer of one count of conspiracy, eight counts of wire

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

fraud, eight counts of mail fraud, and one count of misuse of a Government
seal. Also in February 2014, Burris was sentenced to one year and one day in
Federal prison, followed by two years of supervised release, after pleading guilty to
conspiracy and wire fraud for his role in the mortgage modification scam.
As previously reported, in August 2011, SIGTARP agents, and their law
enforcement partners, arrested Godfrey, Fischer, Burris, and Kelly. On April 24,
2014, after pleading guilty to one count of conspiracy, nine counts of wire fraud,
and nine counts of mail fraud, Kelly was sentenced to one year and one day in
Federal prison to be followed by three years of supervised release, and a $1,900
penalty.
Through a series of misrepresentations, HOPE (through Godfrey, Fischer,
Burris and Kelly) induced thousands of financially distressed homeowners to
pay up-front fees of up to $2,000 each in exchange for home loan modifications,
modification services, and “software licenses.” In exchange for the fee, HOPE
sent homeowners a “do-it-yourself” application package that was nearly identical
to the U.S. Government’s free application through the Home Affordable
Modification Program (“HAMP”), a Federally funded mortgage assistance program
implemented under TARP. HOPE falsely represented to homeowners that, with
HOPE’s assistance, the homeowners were virtually guaranteed to receive a loan
modification under HAMP. For example, the defendants lulled these distressed
homeowners by routinely telling the homeowners that they had already been
approved for a loan modification, that the defendants were “underwriters” or were
otherwise affiliated with the homeowners’ mortgage companies, and that HOPE
had an almost perfect record of obtaining home loan modifications. In actuality,
however, HOPE customers had no advantage in the applications process and most
of their applications were denied. Through these misrepresentations, HOPE was
able to persuade numerous homeowners to pay more than $4 million collectively in
fees to HOPE. Victims of HOPE lived in all 50 states and Washington, DC.
This case was investigated by SIGTARP, the U.S. Attorney’s Office for the
District of Massachusetts, and the Computer Crime and Intellectual Property
Section of the U.S. Department of Justice’s Criminal Division.

TARP-Related Prohibitions from Working in Banking and Financial
Services; as a Government Contractor; or as a Licensed Attorney
SIGTARP investigations not only have led to lengthy prison terms, restitution
and forfeiture orders, and civil judgments for TARP-related offenses, but also
have resulted in senior executives being suspended or permanently banned from
working in banking and financial services, as a Government contractor, or as
a licensed attorney. As of September 30, 2014, SIGTARP investigations have
resulted in orders temporarily suspending or permanently banning 89 individuals
from working in the banking or financial industry, working as a contractor with
the Federal Government, or working as a licensed attorney. Many of these people
were at the highest levels of companies that applied for or received a TARP bailout.
They were trusted to exercise good judgment and make sound decisions. However,
they abused that trust, many times for personal benefit. The suspensions and

43

44

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

bans remove these senior executives (and others) from the banking and financial
industries in which many practiced for years. A violation of the removal, in some
instances, could be a basis for further prosecution. These high-level executives,
some of whom were chief executive officers, chief financial officers, or licensed
attorneys, have been sanctioned in a variety of ways, many by more than one
authority: (i) by a sentencing court as part of the terms of supervised release
after a prison term has been served; (ii) by the executive branch of the Federal
Government as a bar from engaging in a Government contract; (iii) by a Federal
banking regulator, which has the authority to ban an individual from working in the
banking industry; (iv) by the Securities and Exchange Commission (“SEC”), which
has the authority to issue certain bans relating to working in the securities industry;
(v) by a Federal court in enforcing a Federal Trade Commission (“FTC”) request
to order a ban against advertising, marketing, promoting, or selling mortgage
assistance or mortgage relief; and (vi) by a state bar association, which has the
authority to suspend or disbar a licensed attorney.
Of the 89 individuals, 52 were heads or owners of companies, including
those who were chairmen, chief executive officers, and presidents of financial
institutions. Most of the remaining 37 individuals were chief financial officers,
senior vice presidents, chief operating officers, chief credit officers, licensed
attorneys, and other senior executives.
This quarter, SIGTARP investigations resulted in two prohibitions that are a
condition of guilty pleas. As part of their guilty pleas, Michael Hilbert and James
Crews, businessmen who perpetrated a scheme to defraud TARP recipient Excel
Bank in connection with around $2.6 million in loans which defaulted, agreed to
be banned from being self-employed or employed as a consultant, as well as being
involved in the creation, operation, or management of any business. Excel Bank
later failed and the entirety of the $4 million TARP investment, and $900,000 in
missed dividend and interest payments, was lost.
Sentences Resulting from TARP-Related Crimes

Of the 146 defendants convicted as a result of a SIGTARP investigation, 87
defendants have already been sentenced to prison for TARP-related crimes, 21
were sentenced to probation, and the remainder await sentencing.
The consequences for TARP-related crime are severe. The average prison
sentence imposed by courts for TARP-related crime investigated by SIGTARP is
64 months, which is nearly double the national average length of prison sentences
iv
involving white collar fraud of 36 months. Fourteen defendants investigated
by SIGTARP were sentenced to 10 years or more in Federal prison, including
Lee Farkas, former chairman of mortgage company Taylor, Bean and Whitaker
Mortgage Corporation LLC (“TBW”), who is serving a 30-year prison sentence,
and Edward Woodard, former chairman of the Bank of the Commonwealth, who
is serving a 23-year prison sentence. Many of the criminal schemes uncovered
by SIGTARP had been ongoing for years, and involved millions of dollars and
iv See the U.S. Sentencing Commission’s 2013 Sourcebook of Federal Sentencing Statistics for additional information.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

complicated conspiracies with multiple co-conspirators. On average, as a result
of SIGTARP investigations, criminals convicted of crimes related to TARP’s
banking programs have been sentenced to serve 76 months in prison. Criminals
convicted for mortgage modification fraud schemes or other mortgage fraud related
investigations by SIGTARP were sentenced to serve an average of 37 months in
prison. Criminals investigated by SIGTARP and convicted of investment schemes
such as Ponzi schemes and sales of fake TARP-backed securities were sentenced to
serve an average of 75 months in prison. Figure 1.3 shows the people sentenced to
prison, the sentences they received, and their affiliations.
FIGURE 1.3

INDIVIDUALS SENTENCED TO PRISON

Lee Bentley Farkas
360 months
3 years supervised release
Chairman
Taylor, Bean and Whitaker

Edward Woodard
276 months
5 years supervised release
President & CEO
Bank of the Commonwealth

Stephen Fields
204 months
5 years supervised release
Executive Vice President
Bank of the Commonwealth

David McMaster
188 months
5 years supervised release
Vice President
American Mortgage
Specialists Inc.

Mark Anthony McBride
[deceased]
170 months
5 years supervised release
Omni National Bank

Delroy Davy
168 months
5 years supervised release
Omni National Bank

George Hranowskyj
168 months
3 years supervised release
Owner/Operator
345 Granby, LLC

Mark A. Conner
144 months
5 years supervised release
President
FirstCity Bank

Eric Menden
138 months
3 years supervised release
Owner/Operator
345 Granby, LLC

Glen Alan Ward
132 months
3 years supervised release
Partner
Timelender

Mark Farhood
132 months
3 years supervised release
Owner
Home Advocate Trustees

Robert Egan
132 months
3 years supervised release
President
Mount Vernon Money Center

Gordon Grigg
120 months
3 years supervised release
Financial Advisor and Owner
ProTrust Management, Inc.

John Farahi
120 months
3 years supervised release
Investment Fund Manager
and Operator
New Point Financial
Services, Inc.

Isaak Khafizov
108 months
3 years supervised release
Principal
American Home Recovery

Catherine Kissick
96 months
3 years supervised release
Senior Vice President
Colonial Bank

Robin Bruhjell Brass
96 months
3 years supervised release
Owner/Operator
BBR Group, LLC

Scott Powers
96 months
5 years supervised release
CEO
American Mortgage
Specialists Inc.

Troy Brandon Woodard
96 months
5 years supervised release
Vice President
Bank of the Commonwealth
Subsidiary

Howard Shmuckler
90 months
3 years supervised release
Owner/Operator
The Shmuckler Group, LLC

Clayton A. Coe
87 months
5 years supervised release
Vice President
Senior Commercial Loan
Officer
FirstCity Bank

Christopher Godfrey
84 months
3 years supervised release
President
H.O.P.E.

David Tamman
84 months
3 years supervised release
Attorney
Nixon Peabody LLP

Dennis Fischer
84 months
3 years supervised release
Vice President
H.O.P.E.

Lawrence Allen Wright
75 months
5 years supervised release
Owner
Wright & Associates

Desiree Brown
72 months
3 years supervised release
Treasurer
Taylor, Bean and Whitaker

Jason Sant
72 months
2 years supervised release
Co-owner
Home Advocate Trustees

Jerry J. Williams
72 months
3 years supervised release
President, CEO, and Chairman
Orion Bank

45

46

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Lori Macakanja
72 months
3 years supervised release
Housing Counselor
Home Front, Inc.
(a HUD-approved company)

Edward Shannon Polen
71 months
5 years supervised release
Owner
Polen Lawn Care and
Maintenance/F&M

Adam Teague
70 months
5 years supervised release
Vice President
Appalachian Community Bank

Francesco Mileto
65 months
5 years supervised release

Glenn Steven Rosofsky
[deceased]
63 months
3 years supervised release
Owner
Federal Housing Modification
Department

Frederic Gladle
61 months
3 years supervised release
Operator
Timelender

Bernard McGarry
60 months
3 years supervised release
Chief Operatiing Officer
Mount Vernon Money Center

Delton de Armas
60 months
3 years supervised release
CFO
Taylor, Bean and Whitaker

Jeffrey Levine
60 months
5 years supervised release
Executive Vice President
Omni National Bank

Richard Pinto [deceased]
60 months
5 years supervised release
Chairman
Oxford Collection Agency

William Cody
60 months
5 years supervised release
Owner/Operator
C&C Holdings, LLC

Steven Pitchersky
51 months
5 years supervised release
Owner/Operator
Nationwide Mortgage Concepts

Dwight Etheridge
50 months
5 years supervised release
President
Tivest Development &
Construction, LLC

Michael Edward Filmore
48 months
3 years supervised release
Straw Borrower

Peter Pinto
48 months
3 years supervised release
President/COO
Oxford Collection Agency

Winston Shillingford
48 months
3 years supervised release
Co-owner
Waikele Properties Corp.

Julius Blackwelder
46 months
3 years supervised release
Manager
Friends Investment Group

Paul Allen
40 months
2 years supervised release
CEO
Taylor, Bean and Whitaker

Brent Merriell
39 months
5 years supervised release

Robert E. Maloney, Jr.
39 months
3 years supervised release
In-house Counsel
FirstCity Bank

Cheri Fu
36 months
5 years supervised release
Owner/President
Galleria USA

Christopher Tumbaga
36 months
4 years supervised release
Loan Officer
Colorado East Bank and Trust

Marleen Shillingford
36 months
3 years supervised release
Co-owner
Waikele Properties Corp.

Roger Jones
33 months
3 years supervised release
Federal Housing Modification
Department

Michael Trap
30 months
3 years supervised release
Owner
Federal Housing Modification
Department

Raymond Bowman
30 months
2 years supervised release
President
Taylor, Bean and Whitaker

Thomas Hebble
30 months
3 years supervised release
Executive Vice President
Orion Bank

Marvin Solis
27 months
3 years supervised release
Owner
Hawk Ridge Investments, LLC

Tommy Arney
27 months
3 years supervised release
Owner
Residential Development
Company

Angel Guerzon
24 months
3 years supervised release
Senior Vice President
Orion Bank

Clint Dukes
24 months
5 years supervised release
Owner
Dukes Auto Collision Repair

Jesse Litvak
24 months
3 years supervised release
Managing Director
Jeffries LLC

Joseph D. Wheliss, Jr.
24 months
5 years supervised release
Owner/Operator
National Embroidery Works Inc

Reginald Harper
24 months
3 years supervised release
President and CEO
First Community Bank

Karim Lawrence
21 months
5 years supervised release
Officer
Omni National Bank

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Thomas Fu
21 months
5 years supervised release
Owner/CFO
Galleria USA, Inc.

Ziad Nabil Mohammed
Al Saffar
21 months
3 years supervised release
Operator
Compliance Audit
Solutions, Inc.

Christopher Woods
18 months
3 years supervised release
Owner
Blue and White Management,
Ameridream

Matthew Amento
18 months
3 years supervised release
Owner
Blue and White Management,
Ameridream

Robert Ilunga
18 months
3 years supervised release
Manager
Waikele Properties Corp.

Troy A. Fouquet
18 months
3 years supervised release
Owner
Team Management, LLC
TRISA, LLC

Andrew M. Phalen
12 months
5 years probation
Operator
CSFA Home Solutions

Brian M. Kelly
12 months
3 years supervised release
Employee
H.O.P.E.

Carlos Peralta
12 months
3 years supervised release
Park Avenue Bank

Gregory Flahive
12 months
3 years probation
Owner/Attorney
Flahive Law Corporation

Lynn Nunes
12 months
5 years supervised release
Owner
Network Funding

Sara Beth Bushore
Rosengrant
12 months
3 years supervised release
Operator
Compliance Audit
Solutions, Inc.

Vernell Burris
12 months
2 years supervised release
Employee
H.O.P.E.

Walter Bruce Harrell
10 months
3 years supervised release
Owner

Justin D. Koelle
9 months
5 years probation
CEO
CSFA Home Solutions

Jacob J. Cunningham
8 months
5 years probation
CEO
CSFA Home Solutions

John D. Silva
8 months
5 years probation
Senior Official
CSFA Home Solutions

Daniel Al Saffar
6 months
3 years supervised release
Sales Representative
Compliance Audit
Solutions, Inc.

Dominic A. Nolan
6 months
5 years probation
Owner
CSFA Home Solutions

Eduardo Garcia Sabag
3 months
Deported
Borrower

Sean Ragland
3 months
3 years supervised release
Senior Financial Analyst
Taylor, Bean and Whitaker

Teresa Kelly
3 months
3 years supervised release
Operations Supervisor
Colonial Bank

Mark W. Shoemaker
1 day
(with credit for time served)
5 years supervised release

Michael Bradley Bowen
1 day
(with credit for time served)
5 years supervised release

47

48

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Location of TARP-Related Crimes

SIGTARP has found, investigated, and supported the prosecution of TARP-related
crime throughout the nation. Our investigations have led to criminal charges
against 212 defendants (146 of whom have been convicted as of September 30,
v
2014, while others await trial). These defendants were charged in courts in 25
states and Washington, DC. SIGTARP investigations have identified victims of
TARP-related crimes in all 50 states and Washington, DC. Victims of TARP-related
crimes include taxpayers, the Federal Government (including Treasury and FDIC),
TARP recipient banks, and homeowners targeted by mortgage modification scams.
Figure 1.4 shows locations of U.S. Attorney’s Offices and state prosecutorial offices
vi
where criminal charges were filed as a result of SIGTARP investigations.

v Criminal charges are not evidence of guilt. A defendant is presumed innocent until and unless proven guilty.
vi The prosecutors partnered with SIGTARP ultimately decide the venue in which to bring criminal charges resulting from SIGTARP’s
investigations.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 1.4

LOCATIONS WHERE CRIMINAL CHARGES WERE FILED AS A RESULT OF
SIGTARP INVESTIGATIONS

Fargo

Buffalo

Madison

Brooklyn
New York

Chicago

Sacramento
San Francisco
Las Vegas

Denver
Wichita

Kansas City
St. Louis
Jefferson City

Knoxville

Little Rock

San Diego

New Haven
Newark

Philadelphia
Columbus Wilmington
Upper Marlboro
District of Columbia
Alexandria
Norfolk

Nashville
Los Angeles

Concord
Boston

Atlanta

Birmingham

Macon
Tallahassee

San Antonio

Birmingham, Alabama
Northern District of Alabama
Little Rock, Arkansas
Eastern District of Arkansas
Los Angeles, California
Central District of California
Sacramento, California
Eastern District of California
Sacramento, California
Superior Court of California
San Francisco, California
Northern District of California
San Diego, California
Southern District of California
Denver, Colorado
District of Colorado
New Haven, Connecticut
District of Connecticut
Wilmington, Delaware
District of Delaware
Tampa, Florida
Middle District of Florida
Tallahassee, Florida
Northern District of Florida
Macon, Georgia
Middle District of Georgia
Note: Italics denote state cases.

New Orleans

Atlanta, Georgia
Northern District of Georgia
Chicago, Illinois
Northern District of Illinois
Chicago, Illinois
Circuit Court of Cook County, Illinois
Kansas City, Kansas
District of Kansas
Wichita, Kansas
District of Kansas
New Orleans, Louisiana
Eastern District of Louisiana
Boston, Massachusetts
District of Massachusetts
Upper Marlboro, Maryland
Prince George’s District Court
St. Louis, Missouri
Eastern District of Missouri
Kansas City, Missouri
Western District of Missouri
Jefferson City, Missouri
Western District of Missouri
Fargo, North Dakota
District of North Dakota
Concord, New Hampshire
District of New Hampshire

Tampa

Newark, New Jersey
District of New Jersey
Las Vegas, Nevada
District of Nevada
Brooklyn, New York
Eastern District of New York
Buffalo, New York
Western District of New York
New York, New York
Southern District of New York
Columbus, Ohio
Southern District of Ohio
Philadelphia, Pennsylvania
Eastern District of Pennsylvania
Knoxville, Tennessee
Eastern District of Tennessee
Nashville, Tennessee
Middle District of Tennessee
San Antonio, Texas
Western District of Texas
Alexandria, Virginia
Eastern District of Virginia
Madison, Wisconsin
Western District of Wisconsin
Washington, DC
U.S. Department of Justice

49

50

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Restitution and Forfeiture from TARP-Related Crimes

As of September 30, 2014, investigations conducted by SIGTARP have resulted in
more than $7.38 billion in court orders and Government settlements for the return
of money to victims or the Government. These orders happen only after conviction
and sentencing or civil resolution and many SIGTARP cases have not yet reached
that stage; therefore, any additional court orders would serve to increase this
amount.
Two cases in particular that SIGTARP investigated have resulted in not
only lengthy prison sentences for a number of individuals in each case but also
significant orders of forfeiture and restitution. In the Colonial Bank/Taylor, Bean
and Whitaker Mortgage Corporation LLC (“TBW”) case, former TBW chairman
Lee Bentley Farkas spearheaded a $2.9 billion fraud scheme that contributed to
the failure of Colonial Bank, the sixth largest bank failure in U.S. history. The case
resulted in not only prison time for eight people including Farkas but also courtordered restitution of $3.5 billion and forfeiture of $38.5 million. In the Bank of
the Commonwealth case (“BOC”), where former chairman Edward J. Woodard led
a $41 million bank fraud scheme that masked non-performing assets at BOC and
contributed to the failure of BOC in 2011, the court entered a restitution order of
$333 million and a forfeiture order of $65 million against nine defendants, each
responsible for at least a portion.
Overall in SIGTARP cases, orders of restitution and forfeiture to victims and
the Government of numerous assets as well as seized assets pending final order
include dozens of vehicles, more than 30 properties (including businesses and
waterfront homes), more than 30 bank accounts (including a bank account located
in the Cayman Islands), bags of silver, U.S. currency, antique and collector coins
(including gold, silver, and copper coins), artwork, antique furniture, Civil War
memorabilia, NetSpend Visa and CashPass MasterCard debit cards, Western
Union money orders with the “Pay To” line blank, and the entry of money
judgments by courts against more than 20 defendants.
Of the vehicles ordered to be forfeited (including automobiles, a tractor, water
craft, recreational and commercial vehicles) several are antique and expensive cars,
including a 1969 Shelby Mustang, a 1932 Ford Model A, a 1954 Cadillac Eldorado
convertible, a 1963 Rolls Royce, and a 1965 Shelby Cobra.
As part of the Bank of the Commonwealth case, Thomas Arney, who pled guilty
for his role in the bank fraud scheme, agreed to forfeit the proceeds from the sale
of two antique cars to the Government: a 1948 Pontiac Silver Streak and a 1957
Cadillac Coup de Ville. Figure 1.5 includes pictures of the forfeited cars, as well as
other examples of assets seized by the Government in SIGTARP investigations.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 1.5

1957 Cadillac Coupe de Ville.

1948 Pontiac Silver Streak.

2010 Mercedes-Benz GLK 350 4Matic.
Estimated value in 2013: $29,000. (Source
Kelley Blue Book)

2005 Hummer H2. Estimated value in 2013:
$24,000. (Source Kelley Blue Book)

Property located in Norfolk, Virginia. (Photo
courtesy of Bill Tiernan, The Virginian-Pilot)

1958 Mercedes-Benz Cabriolet 220. Estimated
value in 2013: $185,000. (Source Hagerty.com)

19th century English painting of
“Royal Family,” oil on canvas.
Estimated appraised value:
$6,000.

51

52

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Property located in Chesapeake, Virginia. (Photo
courtesy of Bill Tiernan, The Virginian-Pilot)

French-style gilt, bronze, and green malachite
columnar 16-light torchères with bronze
candelabra arms. Estimated appraised value:
$8,000.

2005 Scout Dorado. (Sold for $1,800)

Cash seized from safe, $158,000.

Alabama property ordered forfeited.

Kubota tractor.

Artwork with a total value of $71,525, including
paintings worth up to $10,000 each.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

SIGTARP Audit Activity
SIGTARP has initiated 31 audits and 6 evaluations since its inception. As of
September 30, 2014, SIGTARP has issued 23 reports on audits and evaluations.
Among the ongoing audits and evaluations in process are reviews of ongoing audits
and evaluations in process are reviews of: (i) Treasury’s and the state housing
finance agencies’ implementation and execution of the Hardest Hit Fund; and
(ii) Treasury’s role, implementation, and status of the Hardest Hit Fund Blight
Elimination Program.

Recent Audits/Evaluations Released
Treasury Signficantly Loosened Executive Pay Limits Resulting in Excessive Pay
for Top 25 Employees at GM and Ally (GMAC) When the Companies Were not
Repaying TARP in Full and Taxpayers Were Suffering Billons of Dollars in Losses

Former Treasury Secretary Timothy F. Geithner said that executive compensation
played a material role in the financial crisis. As restraint in exchange for
taxpayer bailouts, Congress and the President announced that Troubled Asset
Relief Program (“TARP”) recipients would be required to abide by certain rules
on executive compensation, rules that the U.S. Department of the Treasury
(“Treasury”) was required to promulgate. In February 2009, the President
announced “reforms” that “top executives at firms receiving extraordinary help
from U.S. taxpayers will have their compensation capped at $500,000, a fraction
of the salaries that have been reported recently. And if these executives receive
any additional compensation, it will come in the form of stock that can’t be
paid up until taxpayers are paid back for their assistance.” After the President’s
announcement, Treasury promulgated a rule that listed six principles to keep pay
for TARP companies in the interest of taxpayers, principles that Treasury’s former
Special Master for TARP Executive Compensation (“Special Master”) Kenneth
R. Feinberg found inherently inconsistent. Therefore, he developed a three-step
methodology using what he called “prescriptions,” or guidelines, that Treasury’s
Office of the Special Master for TARP Executive Compensation (“OSM”) used to
set pay for the Top 25 employees at seven companies that had received exceptional
assistance under TARP.
In 2012, the Office of the Special Inspector General for the Troubled Asset
Relief Program (“SIGTARP”) reported that it found that the Special Master
could not effectively rein in excessive compensation because he was under the
constraint that his most important goal was to get the companies to repay TARP
(one of Treasury’s six principles). Given OSM’s overriding goal, the companies
had significant leverage by proposing and negotiating for excessive pay, warning
that if he did not provide competitive pay packages, top officials would leave
and go elsewhere, a claim that he said did not come true. The former Special
Master recounts in his book, Who Gets What: Fair Compensation after Tragedy
and Financial Upheaval (“Who Gets What”) that the primary goal in determining
payments for corporate officials was to maximize the likelihood that the companies

53

54

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

would repay TARP as quickly as possible because the taxpayers had to be made
whole. SIGTARP reported in 2012 that, although OSM limited cash compensation
and made some reductions in pay, OSM still approved total compensation in the
millions. In 2013, SIGTARP published a second report that Acting Special Master
Patricia Geoghegan rolled back OSM’s application of guidelines aimed at curbing
excessive pay, effectively relinquishing some of OSM’s authority by relying to a
great extent on the companies’ pay proposals or justifications rather than robust
policies, procedures, or criteria to ensure that OSM’s guidelines are met.
By April 2013, when Treasury’s OSM set 2013 pay, it found itself with an
incredibly narrow and limited job because there were only two companies left in
its jurisdiction. OSM touted as the ultimate metric of success for its pay decisions
the fact that the other five companies had exited TARP with taxpayers being made
whole (even though some of those companies did not repay but Treasury sold
their stock in the market). General Motors Corporation (“GM”) and its prior auto
financing arm General Motors Acceptance Corp. (“GMAC Inc.,” rebranded as
Ally Financial Inc. (“Ally”)) were not only the last two companies under OSM’s
jurisdiction, they were the last two large companies still in TARP after four years.
GM and former GMAC were having trouble repaying TARP in full, taxpayers had
suffered losses on both investments, and the Government estimated final losses of
$20 billion to $25 billion on the auto bailout (including losses on GM, Ally, and the
$2.9 billion loss taxpayers suffered from the TARP investment in Chrysler Holding
LLC (“Chrysler”).
Having not received TARP repayments in full from GM and Ally, Treasury made
the decision to sell the TARP stock in GM into the market and allowed GM to buy
back some of the stock, both at significant losses. When Treasury’s OSM set 2013
pay, taxpayers had already lost $8.2 billion on the TARP investment in GM.
Ally had made no repayments of the principal TARP investment. While Ally was
under a March 2013 failed stress test, taxpayers suffered a loss of $845 million
when Treasury sold Ally common stock in the market. SIGTARP evaluated Treasury
OSM’s determinations of 2013 pay for GM and Ally Top 25 employees. While
SIGTARP was conducting this evaluation, Treasury sold its remaining TARP shares
of GM into the market to arrive at a total loss to taxpayers of $11.159 billion, and
sold some of its Ally common stock into the market to arrive at total losses of $1.8
billion. In April 2014, OSM’s job got even narrower as it set 2014 pay for the Top
25 employees at only one company, Ally.
SIGTARP found that Treasury continued to award excessive pay by approving
some of the companies’ requests for pay raises and high guaranteed cash salaries,
and approving the companies’ requests to accelerate the time limit for corporate
officials to cash out company stock received as pay, and to eliminate pay tied to
individual performance metrics and the repayment of TARP (long-term restricted
stock). SIGTARP found that after making the pay determinations in April 2013,
Treasury made limited progress since SIGTARP’s last report but did not make the
meaningful reforms needed and previously recommended by SIGTARP. In June
2013, OSM created for the first time a written policy and procedures.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

However, these appear to be an attempt to document what OSM had done
historically without meaningful change as SIGTARP recommended. OSM’s policy
merely recites TARP legislation and the Treasury Rule, both in existence prior to
the establishment of OSM, leaving OSM as an office of Treasury that operates
without formal written policies developed by that office. SIGTARP found that
Treasury did not have robust policies, procedures, or criteria to ensure that OSM’s
guidelines are met. Two aspects of Treasury’s pay-setting process and pay decisions
serve as important lessons learned.
First, loosening limits on executive compensation for companies unable to repay
TARP subjects Treasury to criticism that it is rewarding top executives at companies
that are losing taxpayers’ money over the interests of the taxpayers already shouldering
billions of dollars in losses on those investments.
SIGTARP found the same thing that it reported in 2012 – that it continues to
be the case that, given OSM’s overriding goal of repayment to taxpayers, GM and
Ally had significant leverage by proposing and negotiating for excessive pay, warning
that if OSM did not provide competitive pay packages, top officials would leave and
go elsewhere. We note that this is a claim that Feinberg said did not come true.
GM and Ally continued to lack an appreciation for their situation and were notably
persistent in proposing more and more pay with fewer and fewer restrictions for
their top officials. Every year they sought exception after exception to OSM’s
guidelines. Bowing to the scare tactics of companies that employees would leave
if OSM did not approve their proposed pay, in 2013 OSM continued to make pay
decisions in a process that was ad hoc and inconsistent.
OSM made decisions based on which of the company’s proposals it would
approve, rather than using independent objective criteria designed to adhere to
OSM’s pay guidelines. The result has been that, every year, Treasury awarded
corporate officials at TARP companies more and more exceptions to Treasury’s
pay guidelines, which appears to have encouraged the companies to propose more
exceptions each year.
Treasury-approved exceptions to its own guideline restrictions on executive
compensation added up incrementally such that by OSM’s fifth year, 2013,
OSM had gotten further and further away from the President’s announcement
and OSM’s prior guidelines, even as taxpayer losses mount. SIGTARP found the
following:
• In 2009, Treasury’s guideline was to set pay to “generally not exceed the 50th
percentile” of what their peers made. Treasury appears now to have done away
with this guideline and by 2014 set most of Ally’s pay between the 50th and
75th percentile.
• Treasury-approved pay increased 28% for GM and Ally Top 25 employees from
2009 to 2013.
• Treasury awarded average pay of $3 million in 2013 to GM and Ally Top 25
employees.
• In 2013, Treasury approved $3 million in aggregate pay raises for nine GM
employees, most of whom received pay raises in consecutive annual years.

55

56

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

•
•

•

•
•
•

•

Those raises were excessive. The pay raises ranged from 4% to 20%, averaging
9.4%, which exceeded the June 2013 1.8% Consumer Price Index (a measure of
inflation) by 422%. Treasury awarded these nine employees pay that exceeded
the 2012 median household income, according to the U.S. Census Bureau, by
7,600%.
In 2013, Treasury approved 19 of 21 (90%) of the employees for whom GM and
Ally had requested cash salaries that would exceed the median.
By 2013, Treasury had loosened its guideline that guaranteed cash salary would
be limited to $500,000 per year, which was based on the President’s statement
that cash salaries not exceed that threshold. Treasury’s June 2013 guideline
states: “Base salary paid in cash should in most cases not exceed $500,000.”
In 2009, Treasury awarded fewer than 10% of the officials in the seven
companies to be paid cash salary in excess of $500,000, which tripled (34%) by
2013.
In 2009, Treasury awarded 5 employees of GM and Ally cash salaries greater
than $500,000, which tripled to 16 employees by 2013.
In 2013, Treasury allowed almost all of the remaining Top 25 employees at GM
and Ally to be paid cash salaries of $450,000 or more.
Typically one-third of compensation in 2009 for Ally and GM, Treasury has
eliminated long-term restricted stock as part of pay for Ally in 2012 and 2014,
which is the type of stock referred to by the President, and the only stock tying
individual performance to TARP repayment.
Treasury loosened time restrictions by a full year for employees to cash out
company stock received as pay.

Just as SIGTARP found in its January 2013 report, SIGTARP found that Acting
Special Master Patricia Geoghegan continued to roll back OSM’s application
of guidelines aimed at curbing excessive pay, effectively relinquishing some of
OSM’s authority by relying to a great extent on the company’s pay proposals or
justifications rather than robust policies, procedures, or criteria to ensure that
OSM’s guidelines are met. OSM is granting many company requests without
independent analysis but instead based on the companies’ justification that the
employees had enormous responsibilities and these exceptions are needed to retain
the employees. While compensation committees at corporations may work like this,
it is not good Government practice to get further and further away from important
guidelines by approving exception after exception. Treasury has allowed OSM
to not implement six of seven SIGTARP recommendations that were designed
to keep OSM accountable to guidelines limiting excessive pay. A lack of robust
criteria, policies, and procedures to ensure that guidelines are met leads to a lack of
transparency, inconsistency, and ultimately a lack of accountability to taxpayers.
The pendulum in OSM’s pay decisions has swung too far in the direction of
keeping companies competitive, without regard for the fact that the reason to keep
companies competitive is so that they can repay taxpayers in full, but GM and
Ally were not repaying taxpayers in full. Rather, taxpayers have suffered billions
of dollars in losses on those TARP investments. There should be no expectation

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

on the part of the companies or Treasury that pay should increase as companies
get farther in time from the crisis because that theory does not take into account
the fact that four years have not led these companies to repay taxpayers fully.
GM’s stock price never rose near to Treasury’s break-even price, but Treasury
continued to award pay raises, cash in excess of $500,000, and multimillion-dollar
pay. Treasury’s pay decisions suggest that OSM’s overriding objective/principle of
“repayment of TARP” inures to the benefit of top executives at TARP companies
when Treasury sets pay. According to Feinberg’s book, Secretary Geithner’s primary
concern was “compensation should reflect the need for the company to recruit and
retain key employees so the company ultimately could repay every cent borrowed.
Pay back the taxpayers – with interest. Every company subject to my jurisdiction,
and much of the Treasury bureaucracy, referenced this variable in urging the
special master to be generous when it came to compensation.”
Feinberg was referring to his role in 2009 and 2010, but since then GM and
Ally have had much trouble repaying TARP fully, which is not reflected in OSM’s
pay decisions. If Treasury wants to use “repayment of TARP” as a factor to approve
“generous” pay, the lack of full repayment of TARP by GM and Ally should likewise
be reflected by Treasury to limit or maintain pay, but not to loosen restrictions on
pay more and more each year. Taxpayers are already subsidizing losses on TARP
investments in these companies and should not be forced by Treasury to subsidize
excessive executive compensation.
Second, by setting pay further and further away from the President’s and Treasury’s
announced limitations on executive compensation for TARP company officials,
Treasury is missing an opportunity for critical reforms to a material cause of the
financial crisis and a strong deterrent to future bailouts.
Even though six of the seven TARP exceptional assistance companies are no
longer in TARP, having strong restrictions on executive compensation at TARP
companies remains critical for the future. Should a future bailout occur, it is
important to have two playbooks. The first playbook the public needs would
describe how Treasury and other Government officials actually made decisions
in the TARP bailout, which requires transparency through written policies
and procedures and good documentation. SIGTARP’s reports bring as much
transparency to this decision making as is possible, but ultimately we are limited
due to the lack of robust policies and procedures, and the ad hoc nature by which
OSM makes decisions. The second playbook the public needs would describe how
the Government could have improved, as determined by oversight agencies such as
SIGTARP, so that future Government officials faced with the possibility of a bailout
with limited time, have a go-to guide for best practices in decision making. In the
height of the crisis, when the Government was making much of its decisions, a lack
of some documentation or some objective criteria was to be expected for first-oftheir-kind decisions. It was one thing in 2009 for OSM to operate without written
policies, procedures, and criteria when OSM officials were just trying to get their
hands around a wealth of information on pay at these companies. However, there is
no excuse now for OSM to not have objective criteria to keep OSM accountable to
strong limits on pay at TARP companies. Moreover, OSM loosening restrictions on

57

58

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

pay could have the effect of loosening incentives for individual corporate executives
to work toward their company repaying TARP. Bank of America Corporation and
Citigroup Inc. told SIGTARP that the limits on executive compensation motivated
them to get out of TARP’sexceptional assistance programs as soon as they could
in 2009. Ally is still in TARP today, and the Government should be keeping every
incentive it has to get Ally to repay TARP. Now no individual at Ally has to meet any
performance metric to receive their pay or wait until taxpayers are paid back (as
the President announced). This is just what Ally wanted. Removing ties between
individual pay and the long-term success of the company and the repayment of
TARP by the company could have the dangerous effect that Ally executives with no
stake in TARP repayment would not work toward repayment but instead watch the
Government sell Ally common stock into the market at further losses to taxpayers.
In addition, by loosening restrictions on pay, OSM could be sending the
message that the much-needed reforms coming out of the financial crisis are no
longer necessary or required in exchange for Federal dollars. In 2009, the President
announced restraints on pay at TARP companies as reforms, stating: “so that when
firms seek new federal dollars, we won’t find them up to the same old tricks.” By
getting further and further away from the President’s announced reforms and
Treasury’s own guidelines, our nation may find the firms up to theirsame old tricks.
OSM’s position that there is nothing requiring it to follow the President’s
announcement misses the point because the President was announcing reforms
designed to combat one of the material causes of the financial crisis. OSM’s own
guidelines were created as reforms because leading up to the crisis, corporate
officials at TARP companies were paid with high guaranteed cash salaries with “no
skin in the game.” OSM’s guideline under former Special Master Feinberg that
cash salaries generally not exceed $500,000 was about giving an employee “skin
in the game.” Feinberg also used a significant amount of pay in the form of longterm restricted stock to “join at the hip” the individual and corporation, through
individual performance focused on extended corporate growth over at least three
years, not just short-term corporate success.
Weakening restrictions on executive compensation could have the very
dangerous effect of not providing employees enough skin in the game, and could
tip the balance toward excessive risk. In 2013, OSM tripled the number of
corporate officials paid guaranteed cash salaries over $500,000 in 2009, and put
almost everyone else just under that cash threshold. OSM accelerated by one year
the prior time restriction for corporate officials to cash out corporate stock received
as pay from 2009 to 2014, effectively guaranteeing more cash pay and reducing
an employee’s skin in the game even further. OSM gave a tiny (effectively 5%)
portion of pay to Ally employees in long-term restricted stock in 2013 tied to longterm corporate success and TARP repayment, only to remove it entirely in 2014.
Eroding reforms coming out of the financial crisis could have the dangerous effect
of allowing companies to end up in the same place that required reforms in the first
place.
Finally, should this nation face the possibility of a future bailout, strong
limitations on executive compensation on this still-existing TARP bailout could

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

have a deterrent effect on companies asking the Government for Federal dollars.
No one employee, no matter how valuable to his or her company, is important
enough to risk weakening a deterrent to future bailouts.
Update on SIGTARP’s audit of the Results of Treasury’s Use of Capital
Surveys to and Responses from Recipients of Funds from the Troubled Asset
Relief Program, including the Capital Purchase Program (“CPP”) and the
Community Development Capital Initiative (“CDCI”)
On September 2, 2014, SIGTARP sent a letter to the Secretary of the U.S.
Department of the Treasury (“Treasury”) with an interim report on SIGTARP’s
audit of the Results of Treasury’s Use of Capital Surveys to and Responses from
Recipients of Funds from the Troubled Asset Relief Program, including the
Capital Purchase Program (“CPP”) and the Community Development Capital
Initiative (“CDCI”). The audit objective is to assess Treasury’s surveys and recipient
responses covering the period 2009 through 2012. During audit fieldwork,
SIGTARP identified issues that warranted Treasury’s immediate attention.
In response to SIGTARP’s repeated recommendations to Treasury that it survey
CPP institutions concerning how they used TARP funds, Treasury began doing so
in 2010. According to Treasury, the purpose of Treasury’s annual “Use of Capital
Survey” is for Treasury to obtain insight into the lending, financial intermediation,
and capital building activities of all CPP and CDCI fund recipients.
SIGTARP’s September 2014 letter communicated several serious concerns
to the Treasury Secretary. SIGTARP discovered that the surveys posted on
Treasury’s website are not the original documents submitted by the institutions to
Treasury because, according to Treasury, Treasury officials converted the survey
responses to a useable format. However, SIGTARP found that Treasury in some
cases actually modified certain data the institutions reported, presenting a risk of
inaccurate reporting. SIGTARP also found errors in how Treasury summarized
the information provided by the institutions. Treasury does not have an adequate
review process during or after the survey process. Treasury officials told SIGTARP
that there was no oversight concerning whether or not the changes from the
institutions’ data should have been made, nor did Treasury follow up with the
institutions to ensure the changes accurately reflected the data reported. According
to Treasury officials, the only review provided by Treasury supervisors of the survey
submissions was a cursory review of the summary table and the text posted on the
website prior to the institutions’ submission to the Office of Financial Stability
media representative responsible for coordinating the posting. A cursory review
without researching the underlying documents may not have revealed many of the
deficiencies that SIGTARP found.
Treasury also does not appear to take any action if a CPP institution or CDCI
institution fails to respond to the survey each year on how it is using TARP
funds, despite the fact that these institutions remain in TARP. Moreover, this
is particularly egregious for CDCI institutions as the reporting requirement is
mandatory. If Treasury does not enforce its requirement that institutions report on

59

60

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

the use of TARP funds, Treasury is not implementing SIGTARP’s recommendation,
which was designed to bring significant transparency.
SIGTARP found errors that even a cursory review should have detected – errors
that any member of the public would have encountered. For example, of the eight
categories of use of TARP funds presented in Treasury’s summary for 2009, only
percentages for two categories were correct. Moreover, percentages for all eight
categories presented in Treasury’s summary for 2011 and 2012 were incorrect.
Additional obvious errors that should have been detected, including misspelled
words and the omission of information that should have been included in the
narrative section of the website, went undetected and were posted on the website.
In addition, on Treasury’s website, under the caption “Survey Results,” Treasury’s
website states that there are eight categories of use of TARP funds. However, only
seven are listed; the one that is missing is “increase lending or reduce lending less
than otherwise would have occurred,” arguably the most important use of TARP
funds. As another example, in the 2012 surveys, SouthFirst Bank has two surveys
listed under its name. However, only one of those belongs to that institution. The
second survey is data on Pulaski Financial Corporation. Treasury’s website under
the “P” listing of institutions lists no survey for Pulaski Financial Corporation.
The financial crisis of 2008 had a detrimental impact on the financial industry.
Through their tax dollars, American taxpayers funded massive efforts to support
institutions that were on the brink of financial ruin. Simply put, the American
public has a right to know how taxpayer dollars in TARP are being spent. Instead,
Treasury, as well as CPP and CDCI recipients, have left the American public in the
dark. Treasury must ensure that full disclosure is made concerning how CPP and
CDCI recipients used the TARP funds.
SIGTARP’s letter made six recommendations to address these findings. On
August 27, 2014, Treasury provided a response to a draft of this letter, in which it
stated that it generally agreed with each of the recommendations and that it would
keep SIGTARP apprised of its actions to address the recommendations. Treasury
must address the deficiencies SIGTARP identified so that the American taxpayer
can be better assured of the accuracy of Treasury-reported information concerning
the CPP and CDCI programs, and to enhance transparency.
The letter in its entirety, along with Treasury’s response, can be found in
Appendix L.

Communications with Congress
One of the primary functions of SIGTARP is to ensure that members of Congress
remain adequately and promptly informed of developments in TARP initiatives
and of SIGTARP’s oversight activities. To fulfill that role, the Special Inspector
General and her staff meet regularly with and brief members of Congress and
Congressional staff. In July, SIGTARP’s Deputy Chief of Staff, Chuck Jones,
and Senior Policy Advisor, Brian Sano, provided briefings to Congressional staff
on SIGTARP’s July 2014, Quarterly Report. Also in July, the Special Inspector
General, Christy Romero, submitted written Congressional testimony on “What
Makes a Bank Systemically Important?” to the U.S. Senate Banking Committee’s

61

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Financial Institutions and Consumer Protection Subcommittee. Copies of
SIGTARP’s Congressional testimony are posted at www.sigtarp.gov/pages/
testimony.aspx.

THE SIGTARP ORGANIZATION

SIGTARP leverages the resources of other agencies, and, where appropriate and
cost-effective, obtains services through SIGTARP’s authority to contract.

Staffing and Infrastructure
SIGTARP’s headquarters are in Washington, DC, with regional offices in New
York City, Los Angeles, San Francisco, and Atlanta. As of September 30, 2014,
SIGTARP had 154 employees. The SIGTARP organization chart as of October 29,
2014, can be found in Appendix K, “Organizational Chart.” SIGTARP posts all of
its reports, testimony, audits, and contracts on its website, www.sigtarp.gov.
From its inception through September 30, 2014, SIGTARP’s website has had
more than 61.1 million web “hits,” and there have been more than 5.4 million
downloads of SIGTARP’s quarterly reports. The site was redesigned in May 2012.
From May 10, 2012, through September 30, 2014, there have been 258,006 page
vii
views. From July 1, 2012, through September 30, 2014, there have been 17,202
viii
downloads of SIGTARP’s quarterly reports.

Budget
Figure 1.6 provides a detailed breakdown of SIGTARP’s fiscal year 2014 actuals,
which reflects total spending of $42.2 million. The Consolidated Appropriations
Act, 2014 (P.L. 113-76) provided $34.9 million in annual appropriations. The
operating budget includes $34.9 million in annual appropriation and carryover of
SIGTARP’s remaining no-year funding.
Figure 1.7 provides a detailed breakdown of SIGTARP’s fiscal year 2015
proposed budget, which reflects a total operating plan of $46.1 million. This
would include $34.2 million in requested annual appropriations and portions of
SIGTARP’s initial funding.

FIGURE 1.6

SIGTARP FY 2014
OPERATING PLAN
($ MILLIONS, PERCENTAGE OF $42.2 MILLION)

Other Services
$1.5, 4%
Advisory Services
$2.6

6%

Interagency
Agreements 24%
$10.2

64%

Salaries
and
$27.0

Travel
$0.9, 2%

FIGURE 1.7

SIGTARP FY 2015
PROPOSED BUDGET
($ MILLIONS, PERCENTAGE OF $46.1 MILLION)
Other Services
$2.3, 5%
Advisory Services
$3.2

7%

Interagency
Agreements 18%
$8.2

68%

Salaries
and
$31.3

vii In October 2009, Treasury started to encounter challenges with its web analytics tracking system and as a result, migrated to a new

system in January 2010. SIGTARP has calculated the total number of website “hits” reported herein based on three sets of numbers:
• Numbers reported to SIGTARP as of September 30, 2009
• Archived numbers provided by Treasury for the period of October through December 2009
• Numbers generated from Treasury’s new system for the period of January 2010 through September 2012

Starting April 1, 2012, another tracking system has been introduced that tracks a different metric, “page views,” which are different
than “hits” from the previous system. Moving forward, page views will be the primary metric to gauge use of the website.
viii Measurement of quarterly report downloads from SIGTARP’s redesigned website did not begin until July 1, 2012.

Travel
$1.1, 2%

62

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

S ECT I O N 2

SIGTARP RECOMMENDATIONS

64

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

One of the critical responsibilities of the Office of the Special Inspector General
for the Troubled Asset Relief Program (“SIGTARP”) is to provide recommendations
to the U.S. Department of the Treasury (“Treasury”) and other Federal agencies
related to the Troubled Asset Relief Program (“TARP”) to facilitate transparency
and effective oversight and to prevent fraud, waste, and abuse. SIGTARP has made
151 recommendations to Treasury and Federal banking regulators. This section
discusses developments with respect to SIGTARP’s recommendations and, in the
table at the end of this section, summarizes all of SIGTARP’s recommendations
and notes the extent of implementation.

UNIMPLEMENTED RECOMMENDATIONS
REGARDING EXCESSIVE EXECUTIVE
COMPENSATION

Executive compensation played a pivotal role in the financial crisis and encouraged
excessive risk taking. Limits on executive compensation at TARP companies serve
as important reforms and possibly deterrents to future crises or bailouts. To address
these issues, Treasury created the Office of the Special Master for TARP Executive
Compensation (“OSM”). OSM has jurisdiction over compensation at companies
that stood out from the more than 700 TARP recipients because of the amount and
nature of their exceptional bailout. OSM sets pay for the Top 25 employees (i.e. the
five senior executive officers and the next 20 most highly compensated employees)
at these TARP exceptional assistance recipients.
Although SIGTARP has issued three reports on executive compensation that
included formal recommendations addressing these concerns, Treasury has failed
to implement many of SIGTARP’s recommendations. By rejecting SIGTARP’s
recommendations, Treasury has denied the possibility there could be any room for
improvement concerning executive compensation for TARP recipients.
In January 2012, SIGTARP first reported that Treasury failed to rein in
executive compensation, focused on keeping the companies competitive so that
they could repay TARP. The following year, in January 2013, SIGTARP reported
that Treasury had failed to implement SIGTARP’s recommendations to develop
robust criteria, policies, and procedures to ensure Treasury could meet its own
pay setting guidelines, relying to a great extent on the companies’ pay proposals.
SIGTARP also stressed that Treasury continued to award excessive pay packages,
including large guaranteed cash salaries.
On September 24, 2014, SIGTARP issued a third report on executive
compensation titled, “Treasury Significantly Loosened Executive Pay Limits
resulting in Excessive Pay for Top 25 Employees at GM and Ally (GMAC) When
the Companies Were Not Repaying TARP in Full and Taxpayers Were Suffering
Billions of Dollars in Losses.” In the report, SIGTARP found that Treasury
has not taken sufficient meaningful action to address serious concerns raised

65

66

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

by SIGTARP of excessive Treasury-approved pay and to implement SIGTARP
recommendations. Treasury loosened its own pay restrictions for senior executives
at General Motors and Ally year after year, even as taxpayer losses in these
companies mounted. SIGTARP found that OSM continues to lack robust policies,
procedures, and criteria, which would hold OSM accountable to its executive
compensation guidelines, which were created in the public interest. SIGTARP
found several examples delineating OSM’s rolling back of guidelines, effectively
relinquishing authority by relying to a great extent on the company’s pay proposals
or justifications rather than robust policies, procedures, or criteria to ensure that
OSM’s guidelines are met.
Two aspects of Treasury’s pay-setting process and pay decisions serve as
important lessons learned. First, loosening limits on executive compensation for
companies unable to repay TARP subjects Treasury to criticism that it is rewarding
top executives at companies that are losing taxpayers’ money over the interests of
the taxpayers already shouldering billions of dollars in losses on those investments.
Second, by setting pay further and further away from the President’s and Treasury’s
announced limitations on executive compensation for TARP company officials,
Treasury is missing an opportunity for critical reforms to a material cause of the
financial crisis and a strong deterrent to future bailouts. Moreover, loosening
restrictions on executive pay, despite SIGTARP’s repeated recommendations not
to do so, could send the message that much-needed reforms coming out of the
financial crisis are no longer necessary or required in exchange for Federal dollars.
SIGTARP is extremely concerned that instead of fully implementing SIGTARP’s
recommendations, Treasury has gotten further and further away from important
guidelines by approving exception after exception, being too deferential to
companies where taxpayers have suffered billions of dollars in losses.
As a result, SIGTARP made the following recommendations in its September
2014 report:
• The Secretary of the Treasury should require OSM to maintain
documentation of the substance of all OSM communications with TARP
companies.
• The Secretary of the Treasury should require all Treasury employees to
maintain documentation of all communications with TARP companies
regarding compensation.
• The Secretary of the Treasury should require OSM to maintain
documentation of OSM’s communications with Treasury officials regarding
compensation at TARP companies.
• The Secretary of the Treasury should require OSM to use long-term
restricted stock as part of each TARP company’s employee’s compensation
package to ensure compensation is tied to both the employee’s and the
company’s performance, and the full repayment of TARP funds.
• The Secretary of the Treasury should direct OSM to conduct an analysis,
independent of company proposals and assertions, for an employee of a

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

•

•

•

•

•

•

TARP exceptional assistance company to be paid a cash salary exceeding
$500,000.
The Secretary of the Treasury should direct OSM to document its
independent analyses regarding the decision that a TARP exceptional
assistance company employee be paid a cash salary exceeding $500,000.
The Secretary of the Treasury should direct OSM to conduct an analysis,
independent of company proposals and assertions, for an employee of a
TARP exceptional assistance company to receive an increase in annual
compensation.
The Secretary of the Treasury should direct OSM to document its
independent analyses regarding the decision that a TARP exceptional
assistance company employee will receive an increase in annual
compensation.
The Secretary of the Treasury should direct OSM to conduct an analysis,
independent of company proposals and assertions, for an employee of a
TARP exceptional assistance company to be paid a cash salary that exceeds
the market median cash salary for similar positions in similar companies.
The Secretary of the Treasury should direct OSM to document its
independent analyses regarding the decision that a TARP exceptional
assistance company employee be paid a cash salary exceeding market
medians.
The Secretary of the Treasury should direct OSM to include in its written
procedures whether it will target, for each Top 25 employee of a TARP
exceptional assistance company, median total compensation for similar
positions in similar companies.

Treasury has not clearly agreed to implement any of SIGTARP’s recommendations.

UPDATE ON TREASURY’S REPORT ON THE USE OF
TARP FUNDS
Simply put, the American public has a right to know how taxpayer dollars in TARP
are being spent. One of SIGTARP’s first recommendations when it opened its
office in December 2008, soon after TARP was established, was that Treasury
require all TARP recipients to report periodically on their use of TARP funds.
However, Treasury rejected this recommendation. SIGTARP then sent its own
survey to all TARP banks and received responses from 100% of the banks, whose
responses are posted on SIGTARP’s website for the public to view.
Although SIGTARP reiterated its recommendation throughout 2009, it was
not until 2010 that Treasury began issuing annual surveys to TARP financial
institutions on how they used TARP funds. In June 2013, SIGTARP initiated
an audit to report on the results from these surveys to bring transparency to
TARP financial institutions’ reporting to Treasury on how they used TARP funds.

67

68

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Although Treasury sends the surveys each year to TARP’s Capital Purchase
Program (“CPP”) and Community Development Capital Initiative (“CDCI”)
institutions, while conducting our audit fieldwork, SIGTARP discovered areas in
the survey process, tabulation, and reporting that raised concerns that warrant
immediate attention and corrective action by Treasury.
On September 2, 2014, SIGTARP issued a interim letter to Treasury Secretary
Lew stating that SIGTARP found that the original surveys are not posted to
Treasury’s website; rather, the posted information was re-created by Treasury
officials using the survey data provided to Treasury. In reviewing this information,
SIGTARP identified errors in the survey data posted by Treasury. Additionally,
SIGTARP found that Treasury modifies some of the data it receives when it posts
that information on its website; the reason behind this modification is unclear.
SIGTARP also found that the summaries provided by Treasury of the data in the
surveys often contain inaccuracies and mathematical errors. SIGTARP notified
Secretary Lew that without accurate reporting of the data contained in the surveys
on Treasury’s website, SIGTARP, the American taxpayers, and other oversight
bodies are unable to get a clear picture on how exactly TARP funds are being used.
SIGTARP also informed Secretary Lew in the letter that SIGTARP found
that there are no consequences for the failure of a TARP recipient to respond to
a survey. Treasury published, on its website, the name of institutions that did not
respond to surveys in 2011, but SIGTARP has been unable to verify that a list of
noncompliant institutions was published for 2009, 2010, and 2012. The failure of
Treasury to post the lists of noncompliant institutions results in less transparency
for the American taxpayer.
Finally, SIGTARP informed Secretary Lew that SIGTARP’s fieldwork revealed
that Treasury does not have an adequate review process during or after the survey
process. According to Treasury officials, the only review provided by Treasury
supervisors was a cursory one.
As a result, the American public is left in the dark concerning how TARP
recipients used billions of taxpayer dollars. To improve transparency and oversight,
SIGTARP made the following recommendations to Treasury:
• Treasury should post the original surveys received from CPP and CDCI
institutions on how they used TARP funds for each year to the Treasury
website. The original surveys and responses should not be subjected to any
manipulations or changes to calculate survey results.
• Treasury should develop written repeatable operating procedures
for submitting and receiving survey responses from CPP and CDCI
recipients on how they used TARP funds. The procedures should include
the functional roles and responsibilities and automated and manual
process steps involved, such as documenting and determining the survey
population, compiling and analyzing the responses, verifying and validating
the data, resolving discrepancies, and posting the responses on the
Treasury website.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

• Treasury should take aggressive action to enforce its requests that all
CPP institutions report annually on their use of TARP funds, and its
requirement that all CDCI institutions report annually on their use of
TARP funds. At a minimum, Treasury should draft a letter to each CPP and
CDCI institution that fails to report each year, and follow up on that letter
with the institution. Treasury should exercise its rights to compel reporting
on use of TARP funds by CDCI institutions.
• Treasury should fix all errors and/or deficiencies, which SIGTARP
previously provided to Treasury, and submit documentation to SIGTARP
confirming the correction/elimination of these errors.
• Treasury should perform a thorough review of any and all submissions by
TARP recipients on their use of TARP funds prior to posting the surveys
on the Treasury website, and follow up with the institution for any missing
information or information that is inconsistent or has an obvious error.
• Treasury should publicly report on all CPP and CDCI institutions that
have not submitted a survey response on their use of TARP funds for prior
years and continue that reporting in future years.
In response, Treasury stated that it generally agreed with each of SIGTARP’s
recommendations and that it would keep SIGTARP apprised of its actions to
address the recommendations. However, as of September 30, 2014, Treasury has
yet to implement SIGTARP’s recommendations. Treasury should immediately
and fully address the deficiencies SIGTARP identified and implement each of
SIGTARP’s recommendations. Treasury should assure basic transparency to
the American taxpayers who deserve accurate information about how TARP
institutions are using TARP funds. Doing so could also give Treasury more insight
into these TARP institutions. Without this information, Treasury misses an
opportunity to monitor TARP effectively to prevent fraud, waste, and abuse, and
ensure that small businesses in struggling communities get loans TARP was meant
to provide.

SIGTARP RECOMMENDATIONS ON HOUSING
PROGRAMS
Recommendation Concerning Delays in HAMP Mortgage
Modification Decisions
The purpose of Treasury’s Home Affordable Modification Program (“HAMP”)
is to provide affordable and sustainable assistance to homeowners who are still
feeling the effects of the financial crisis. This quarter, SIGTARP made numerous
recommendations with respect to HAMP to Treasury, pointing out opportunities
for Treasury to improve its efforts to provide support to struggling homeowners.
Specifically, SIGTARP’s recommendations focused on the lengthy delays faced by

69

70

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

homeowners seeking a decision on whether they were accepted into HAMP and
the lack of oversight of Treasury’s MHA Outreach and Borrower Intake Project.
On September 10, 2014, SIGTARP outlined for Treasury the significant
delays on a decision from mortgage servicers faced by struggling homeowners
looking to participate in HAMP and start a HAMP trial modification. Specifically,
May 2014 Treasury data shows that 221,000 homeowners have applied to lower
their mortgage payment through HAMP but have faced significant delays of up
to one year or more on a decision from their mortgage servicer. While Treasury
requires that servicers review a completed HAMP application within 30 days,
Treasury allows servicers to extend the review time indefinitely if the application is
incomplete, even in situations where the application is not complete due to no fault
of the homeowner.
Servicers’ failure to review homeowners’ HAMP applications on a timely basis
results in harm to homeowners. The delay that homeowners face in getting a
decision on whether they can participate in TARP stands in stark contrast to banks
that received quick decisions from their regulator and Treasury on their TARP
applications. Homeowners seeking help through HAMP deserve a timely decision
so that they can either lower their mortgage through HAMP or pursue other
foreclosure alternatives if they are declined. Servicers that contract with Treasury
need to fulfill their obligations to make decisions on submitted HAMP applications
in a timely manner.
In order to remedy this situation and help struggling homeowners obtain
affordable and sustainable assistance through HAMP, SIGTARP recommended:
Treasury should ensure that mortgage servicers who contract with Treasury
have sufficient staffing and other resources to review the number of
homeowner HAMP applications submitted each month, plus additional
applications to decrease any backlog of homeowners who applied in prior
months without a decision.
Treasury failed to respond to SIGTARP’s recommendation. Treasury is still
missing the opportunity to help struggling homeowners by seeking to improve
servicers’ performance with respect to HAMP applicants. If Treasury fails to
take swift and strong action to stop these delays, homeowners will suffer the
consequences. Struggling homeowners who applied for HAMP have waited too
long for an answer from their servicers; they should wait no longer.

Recommendations Concerning the MHA Outreach and
Borrower Intake Project
On August 8, 2014, SIGTARP made recommendations to Treasury with respect
to Treasury’s MHA Outreach and Borrower Intake Project, through which
Treasury allocated $18.3 million in TARP funds to NeighborWorks America
(“NeighborWorks”), a firm that uses housing counselors to assist homeowners
with HAMP applications. Treasury has failed to track, monitor, or analyze the

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

effectiveness of the use of $6 million in TARP funds Treasury paid NeighborWorks,
including $2.3 million used for outreach efforts.
SIGTARP asked Treasury to answer how many of the completed HAMP
applicants assisted by NeighborWorks actually resulted in a homeowner getting into
HAMP by receiving a trial modification. SIGTARP also asked how many of those
trial modifications were converted into permanent HAMP modifications.
Treasury did not provide those numbers and instead responded to SIGTARP:
“Information not available. This is an intake project, and thus the focus is on
the status of each Initial Package delivered by the agency to the appropriate
servicer and the servicer verifies the package as complete.”
The fact that treasury does not have this information available leads to the
conclusion that Treasury does not track or monitor whether the TARP funds
spent on this project have actually resulted in affordable and sustainable relief to
homeowners through participation in HAMP. Without monitoring and assessing
these results, Treasury cannot determine the effectiveness or efficiency of the
TARP funds spent on this project and identify risks or areas for improvement.
Treasury should track these results and use that information to help homeowners
actually get help from HAMP.
Accordingly, SIGTARP made the following recommendations to Treasury:
• Treasury should determine how many homeowners who completed a
HAMP application for which Treasury paid NeighborWorks under the
MHA Outreach and Borrower Intake Project are accepted into a HAMP
trial modification and whether that homeowner is granted a permanent
HAMP modification. Treasury should continue to monitor these results on
a monthly basis. Treasury should publicly report all of these results on a
quarterly basis.
• Treasury should publicly report for each of the top 10 servicers how many
homeowners who completed a HAMP application for which Treasury paid
NeighborWorks were denied by the servicer for a HAMP trial modification.
• Treasury should use the results of SIGTARP-recommended monitoring and
reporting on the MHA Outreach and Borrower Intake Project to determine
whether there are areas of improvement.
In Treasury’s response that it does track the information requested, Treasury
appears to not understand that SIGTARP is recommending that Treasury track
homeowner’s applications to see if they actually got help from HAMP. Treasury’s
response to SIGTARP states, “We agree that monitoring the number of applications
approved for a trial period plan is important, as it reflects the status of the
application. That’s why the online application portal tracks this information in real
time. Of the applications verified as complete by September 30th, 30 percent were
approved for a trial period plan, 22 percent were being evaluated for a trial period
plan, and three percent had been withdrawn.” However this is not the information

71

72

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

SIGTARP recommended that Treasury track. Whether a HAMP application
submitted through this project is “approved” or not does not reflect whether the
homeowner actually got a HAMP trial or permanent modification.
Treasury also responded that, “Treasury separately collects and monitors the
number of homeowners who successfully complete trial period plans and convert to
permanent status.” However, SIGTARP’s recommendation related to tracking those
homeowners who participated in the MHA Outreach and Borrower Intake Project
who successfully completed trial period plans and converted to permanent status.
Treasury does not collect and monitor that information and still has not provided
that information to SIGTARP. Given that Treasury still does not know how many
homeowners it paid NeighborWorks to help complete a HAMP application actually
got into HAMP. SIGTARP considers the recommendation unimplemented.
Treasury responded to SIGTARP’s recommendations also claiming it will
publicly report on the activities and final results of the project. However,
Treasury cannot yet report on the information it does not have, i.e. the number of
homeowners who participated in the MHA Outreach and Borrower Intake Project
who successfully completed trial period plans and converted to permanent status.
Treasury is missing an opportunity to track this information to improve the
program and to prevent fraud, waste, or abuse. Treasury’s failure to track this
project’s results leads to a lack of transparency, accountability, and hampers TARP
oversight. Taxpayers who are funding this project have a right to know whether
their taxpayer dollars are bringing real results in sustainable foreclosure relief
through HAMP to homeowners. Additionally, Treasury must stay on top of the
results of its TARP housing efforts to protect taxpayer dollars and homeowners and
ensure accountability.

*

*

*

*

*

*

*

2

3

4

5

6

7

8

Agreements with TALF participants should include an
acknowledgment that: (1) they are subject to the oversight
of OFS-Compliance and SIGTARP, (2) with respect to any
condition imposed as part of TALF, that the party on which
the condition is imposed is required to establish internal
controls with respect to each condition, report periodically
on such compliance, and provide a certification with respect
to such compliance.

In formulating the structure of TALF, Treasury should
consider requiring, before committing TARP funds to the
program, that certain minimum underwriting standards and/
or other fraud prevention mechanisms be put in place with
respect to the ABS and/or the assets underlying the ABS
used for collateral.

Treasury begins to develop an overall investment strategy to
address its portfolio of stocks and decide whether it intends
to exercise warrants of common stock.

Treasury quickly determines its going-forward valuation
methodology.

Treasury should require all TARP recipients to report on the
actual use of TARP funds.

All existing TARP agreements, as well as those governing
new transactions, should be posted on the Treasury website
as soon as possible.

Treasury should include language in new TARP agreements
to facilitate compliance and oversight. Specifically, SIGTARP
recommends that each program participant should (1)
acknowledge explicitly the jurisdiction and authority of
SIGTARP and other oversight bodies, as relevant, to oversee
compliance of the conditions contained in the agreement
in question, (2) establish internal controls with respect to
that condition, (3) report periodically to the Compliance
department of the Office of Financial Stability (“OFSCompliance”) regarding the implementation of those controls
and its compliance with the condition, and (4) provide a
signed certification from an appropriate senior official to
OFS-Compliance that such report is accurate.

Treasury should include language in the automobile industry
transaction term sheet acknowledging SIGTARP’s oversight
role and expressly giving SIGTARP access to relevant
documents and personnel.

X

X

X

X

X

Implemented

X

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

*

1

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

Not Implemented

TBD/NA

Continued on next page

The Federal Reserve adopted
mechanisms that address this
recommendation.

While Treasury has required CDCI
participants to report on their actual
use of TARP funds, no other TARP
recipients were required to do so.
Treasury made the reporting by CPP
recipients only voluntary.

Although Treasury has made
substantial efforts to comply with
this recommendation in many of
its agreements, there have been
exceptions, including in its agreements
with servicers in MHA.

Comments

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

73

*

*

*

*

*

13

14

15

16

17
X

X

X

X

X

X

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should not allow Legacy Securities PPIFs to invest
in TALF unless significant mitigating measures are included
to address these dangers.

Treasury should design a robust compliance protocol with
complete access rights to all TALF transaction participants
for itself, SIGTARP, and other relevant oversight bodies.

Treasury should require additional anti-fraud and credit
protection provisions, specific to all MBS, before
participating in an expanded TALF, including minimum
underwriting standards and other fraud prevention
measures.

In TALF, Treasury should require significantly higher haircuts
for all MBS, with particularly high haircuts for legacy RMBS,
or other equally effective mitigation efforts.

In TALF, Treasury should dispense with rating agency
determinations and require a security-by-security screening
for each legacy RMBS. Treasury should refuse to participate
if the program is not designed so that RMBS, whether new
or legacy, will be rejected as collateral if the loans backing
particular RMBS do not meet certain baseline underwriting
criteria or are in categories that have been proven to be
riddled with fraud, including certain undocumented subprime
residential mortgages.

Treasury and the Federal Reserve should provide to
SIGTARP, for public disclosure, the identity of the borrowers
who surrender collateral in TALF.

*

12

Treasury should oppose any expansion of TALF to legacy
MBS without significant modifications to the program to
ensure a full assessment of risks associated with such an
expansion.

Treasury should formalize its valuation strategy and begin
providing values of the TARP investments to the public.

*

10

Treasury should give careful consideration before agreeing
to the expansion of TALF to include MBS without a full review
of risks that may be involved and without considering certain
minimum fraud protections.

(CONTINUED)

11

*

9

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

Not Implemented

X

X

TBD/NA

Continued on next page

The Federal Reserve adopted
mechanisms that address this
recommendation with respect to
CMBS, and did not expand TALF to
RMBS.

This recommendation was
implemented with respect to CMBS,
and the Federal Reserve did not
expand TALF to RMBS.

The Federal Reserve announced that
RMBS were ineligible for TALF loans,
rendering this recommendation moot.

On December 1, 2010, the Federal
Reserve publicly disclosed the
identities of all TALF borrowers and
that there had been no surrender of
collateral. SIGTARP will continue to
monitor disclosures if a collateral
surrender takes place.

Treasury has formalized its valuation
strategy and regularly publishes its
estimates.

This recommendation was
implemented with respect to CMBS,
and the Federal Reserve did not
expand TALF to RMBS.

This recommendation was
implemented with respect to CMBS,
and the Federal Reserve did not
expand TALF to RMBS.

Comments

74
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

*

*

*

*

*

*

19

20

21

22

23

24

Treasury should require PPIP managers to provide most
favored nation clauses to PPIF equity stakeholders, to
acknowledge that they owe Treasury a fiduciary duty, and to
adopt a robust ethics policy and compliance apparatus.

Treasury should require that all PPIF fund managers (1)
have stringent investor-screening procedures, including
comprehensive “Know Your Customer” requirements at least
as rigorous as that of a commercial bank or retail brokerage
operation to prevent money laundering and the participation
of actors prone to abusing the system, and (2) be required
to provide Treasury with the identities of all the beneficial
owners of the private interests in the fund so that Treasury
can do appropriate diligence to ensure that investors in the
funds are legitimate.

Treasury should impose strict conflict-of-interest rules upon
PPIF managers across all programs that specifically address
whether and to what extent the managers can (1) invest
PPIF funds in legacy assets that they hold or manage on
behalf of themselves or their clients or (2) conduct PPIF
transactions with entities in which they have invested on
behalf of themselves or others.

Treasury should require CAP participants to (1) establish an
internal control to monitor their actual use of TARP funds, (2)
provide periodic reporting on their actual use of TARP funds,
(3) certify to OFS-Compliance, under the penalty of criminal
sanction, that the report is accurate, that the same criteria
of internal controls and regular certified reports should be
applied to all conditions imposed on CAP participants, and
(4) acknowledge explicitly the jurisdiction and authority of
SIGTARP and other oversight bodies, as appropriate, to
oversee conditions contained in the agreement.

Treasury should significantly increase the staffing levels of
OFS-Compliance and ensure the timely development and
implementation of an integrated risk management and
compliance program.

Treasury should address the confusion and uncertainty on
executive compensation by immediately issuing the required
regulations.

All TALF modeling and decisions, whether on haircuts or any
other credit or fraud loss mechanisms, should account for
potential losses to Government interests broadly, including
TARP funds, and not just potential losses to the Federal
Reserve.

(CONTINUED)

X

X

X

Implemented

X

X

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

*

18

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

Not Implemented

X

TBD/NA

Continued on next page

Treasury’s agreements with PPIF
managers include investor-screening
procedures such as “Know Your
Customer” requirements. Treasury
has agreed that it will have access to
any information in a fund manager’s
possession relating to beneficial
owners. However, Treasury did not
impose an affirmative requirement
that managers obtain and maintain
beneficial owner information.

Treasury has adopted some significant
conflict-of-interest rules related to this
recommendation, but has failed to
impose other significant safeguards.

Treasury closed the program with
no investments having been made,
rendering this recommendation moot.

According to Treasury, OFS-Compliance
has increased its staffing level and has
contracted with four private firms to
provide additional assistance to OFSCompliance.

Comments

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

75

In MHA, Treasury should require a closing-like procedure
be conducted that would include (1) a closing warning
sheet that would warn the applicant of the consequences
of fraud; (2) the notarized signature and thumbprint of each
participant; (3) mandatory collection, copying, and retention
of copies of identification documents of all participants in
the transaction; (4) verbal and written warnings regarding
hidden fees and payments so that applicants are made fully
aware of them; (5) the benefits to which they are entitled
under the program (to prevent a corrupt servicer from
collecting payments from the Government and not passing
the full amount of the subsidies to the homeowners); and (6)
the fact that no fee should be charged for the modification.

*

*

*

*

*

26

27

28

29

30

X

Implemented

X

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

In MHA, Treasury should defer payment of the $1,000
incentive to the servicer until after the homeowner has
verifiably made a minimum number of payments under the
mortgage modification program.

In MHA, Treasury should require that verifiable, third-party
information be obtained to confirm an applicant’s income
before any modification payments are made.

In MHA, Treasury should require the servicer to compare
the income reported on a mortgage modification application
with the income reported on the original loan applications.

Additional anti-fraud protections should be adopted in MHA
to verify the identity of the participants in the transaction
and to address the potential for servicers to steal from
individuals receiving Government subsidies without applying
them for the benefit of the homeowner.

Treasury should require servicers in MHA to submit thirdparty verified evidence that the applicant is residing in the
subject property before funding a mortgage modification.

(CONTINUED)

25

Recommendation

SIGTARP RECOMMENDATIONS TABLE

X

In Process

X

X

Not Implemented

TBD/NA

Continued on next page

Rather than deferring payment of the
incentive until after the homeowner
has verifiably made a minimum
number of payments on its permanent
modification, Treasury will pay the
incentive after the servicer represents
that the homeowner has made three
payments during the trial period.

Treasury has rejected SIGTARP’s
recommendation and does not require
income reported on the modification
application to be compared to
income reported on the original loan
application.

Treasury has taken steps to
implement policies and conduct
compliance reviews to address this
recommendation. However, it remains
unclear if Treasury has an appropriate
method to ensure the irregularities
identified in the compliance reviews are
resolved.

Treasury rejected SIGTARP’s
recommendation for a closing-like
procedure. However, since this
recommendation was issued, Treasury
has taken several actions to prevent
fraud on the part of either MHA
servicers or applicants.

Treasury has decided to
adopt this important SIGTARP
recommendation. SIGTARP will monitor
Treasury’s implementation of the
recommendation.

Comments

76
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Treasury should periodically disclose PPIF trading activity
and require PPIF managers to disclose to SIGTARP, within
seven days of the close of the quarter, all trading activity,
holdings, and valuations so that SIGTARP may disclose
such information, subject to reasonable protections, in its
quarterly reports.

X

Implemented

X

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

The conditions that give Treasury “cause” to remove a
PPIF manager should be expanded to include a manager’s
performance below a certain standard benchmark, or if
Treasury concludes that the manager has materially violated
compliance or ethical rules.

*

*

34

Treasury should require the imposition of strict information
barriers or “walls” between the PPIF managers making
investment decisions on behalf of the PPIF and those
employees of the fund management company who manage
non-PPIF funds.

36

*

33

In MHA, Treasury should require its agents to keep track of
the names and identifying information for each participant in
each mortgage modification transaction and to maintain a
database of such information.

Treasury should define appropriate metrics and an
evaluation system should be put in place to monitor the
effectiveness of the PPIF managers, both to ensure they
are fulfilling the terms of their agreements and to measure
performance.

*

32

In MHA, Treasury should proactively educate homeowners
about the nature of the program, warn them about
modification rescue fraudsters, and publicize that no fee is
necessary to participate in the program.

(CONTINUED)

35

*

31

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

X

Not Implemented

TBD/NA

Continued on next page

Treasury has refused to adopt this
recommendation, relying solely
on Treasury’s right to end the
investment period after 12 months.
That timeframe has already expired.
Treasury’s failure to adopt this
recommendation potentially puts
significant Government funds at risk.

Treasury has stated that it has
developed risk and performance
metrics. However, more than four
years into the program, it is still not
clear how Treasury will use these
metrics to evaluate the PPIP managers
and take appropriate action as
recommended by SIGTARP.

Treasury has committed to publish
on a quarterly basis certain highlevel information about aggregated
purchases by the PPIFs, but not
within seven days of the close of the
quarter. Treasury has not committed
to providing full transparency to show
where public dollars are invested by
requiring periodic disclosure of every
trade in the PPIFs.

Treasury has refused to adopt this
significant anti-fraud measure designed
to prevent conflicts of interest. This
represents a material deficiency in the
program.

While Treasury’s program
administrator, Fannie Mae, has
developed a HAMP system of record
that maintains servicers’ names,
investor group (private, portfolio, GSE),
and participating borrowers’ personally
identifiable information, such as
names and addresses, the database
is not constructed to maintain other
information that may assist in detecting
insiders who are committing largescale fraud.

Comments

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

77

*

*

*

*

*

40

41

42

43

44

X

X

X

X

X

Implemented

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should establish policies to guide decision making
in determining whether it is appropriate to defer to another
agency when making TARP programming decisions where
more than one Federal agency is involved.

Treasury should establish policies to guide any similar
future decisions to take a substantial ownership position in
financial institutions that would require an advance review
so that Treasury can be reasonably aware of the obligations
and challenges facing such institutions.

The Secretary of the Treasury should direct the Special
Master to work with FRBNY officials in understanding AIG
compensation programs and retention challenges before
developing future compensation decisions that may affect
both institutions’ ability to get repaid by AIG for Federal
assistance provided.

Treasury should improve existing control systems to
document the occurrence and nature of external phone calls
and in-person meetings about actual and potential recipients
of funding under the CPP and other similar TARP-assistance
programs to which they may be part of the decision making.

Treasury should more explicitly document the vote of each
Investment Committee member for all decisions related to
the investment of TARP funds.

Treasury and FRBNY should (1) examine Moody’s assertions
that some credit rating agencies are using lower standards
to give a potential TALF security the necessary AAA rating
and (2) develop mechanisms to ensure that acceptance of
collateral in TALF is not unduly influenced by the improper
incentives to overrate that exist among the credit agencies.

*

39

Treasury should require PPIF managers to disclose to
Treasury, as part of the Watch List process, not only
information about holdings in eligible assets but also
holdings in related assets or exposures to related liabilities.

Treasury should require PPIF managers to obtain and
maintain information about the beneficial ownership of all of
the private equity interests, and Treasury should have the
unilateral ability to prohibit participation of private equity
investors.

*

(CONTINUED)

38

37

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

Not Implemented

X

TBD/NA

Continued on next page

Treasury has agreed to work closely
with other Federal agencies that are
involved in TARP.

Treasury stated that it does not
anticipate taking a substantial
percentage ownership position in any
other financial institution pursuant to
EESA.

Treasury and the Federal Reserve have
discussed concerns about potential
overrating or rating shopping with the
rating agencies, and have agreed to
continue to develop and enhance risk
management tools and processes,
where appropriate.

Treasury has agreed that it can have
access to any information in a fund
manager’s possession relating to
beneficial owners. However, Treasury is
not making an affirmative requirement
that managers obtain and maintain
beneficial owner information. Treasury
will not adopt the recommendation
to give itself unilateral ability to deny
access to or remove an investor,
stating that such a right would deter
participation.

Comments

78
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Treasury should develop other performance metrics
and publicly report against them to measure over time
the implementation and success of HAMP. For example,
Treasury could set goals and publicly report against those
goals for servicer processing times, modifications as a
proportion of a servicer’s loans in default, modifications
as a proportion of foreclosures generally, rates of how
many borrowers fall out of the program prior to permanent
modification, and re-default rates.

Treasury should undertake a sustained public service
campaign as soon as possible, both to reach additional
borrowers who could benefit from the program and to arm
the public with complete, accurate information — this will
help to avoid confusion and delay, and prevent fraud and
abuse.

Treasury should reconsider its position that allows servicers
to substitute alternative forms of income verification based
on subjective determinations by the servicer.

Treasury should re-examine HAMP’s structure to ensure that
it is adequately minimizing the risk of re-default stemming
from non-mortgage debt, second liens, partial interest rate
resets after the five-year modifications end, and from many
borrowers being underwater.

Treasury should institute careful screening before putting
additional capital through CDCI into an institution with
insufficient capital to ensure that the TARP matching funds
are not flowing into an institution that is on the verge of
failure.

Treasury should develop a robust procedure to audit and
verify the bona fides of any purported capital raise in CDCI
and to establish adequate controls to verify the source,
amount and closing of all claimed private investments.

Treasury should revise CDCI terms to clarify that Treasury
inspection and copy rights continue until the entire CDCI
investment is terminated. Additionally, consistent with
recommendations made in connection with other TARP
programs, the terms should be revised to provide expressly
that SIGTARP shall have access to the CDFI’s records equal
to that of Treasury.

46

47

48

49

50

51

52

X

X

X

X

Implemented

X

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should rectify the confusion that its own
statements have caused for HAMP by prominently disclosing
its goals and estimates (updated over time, as necessary)
of how many homeowners the program will help through
permanent modifications and report monthly on its progress
toward meeting that goal.

(CONTINUED)

45

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury has adopted some programs
to assist underwater mortgages to
address concerns of negative equity
but has not addressed other factors
contained in this recommendation.

Although Treasury has increased its
reporting of servicer performance, it
has not identified goals for each metric
and measured performance against
those goals. Treasury has not set an
acceptable metric for redefaults.

Despite SIGTARP’s repeated
highlighting of this essential
transparency and effectiveness
measure, Treasury has refused to
disclose clear and relevant goals and
estimates for the program.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

79

Treasury should ensure that more detail is captured by
the Warrant Committee meeting minutes. At a minimum,
the minutes should include the members’ qualitative
considerations regarding the reasons bids were accepted or
rejected within fair market value ranges.

Treasury should document in detail the substance of
all communications with recipients concerning warrant
repurchases.

Treasury should develop and follow guidelines and internal
controls concerning how warrant repurchase negotiations
will be pursued, including the degree and nature of
information to be shared with repurchasing institutions
concerning Treasury’s valuation of the warrants.

*

*

*

54

55

56

57

58

X

X

Not Implemented

TBD/NA

Although Treasury largely continues
to rely on self-reporting, stating
that it only plans to conduct testing
where they have particular concerns
as to a TARP recipient’s compliance
procedures or testing results, it has
conducted independent testing of
compliance obligations during some
compliance reviews.

Treasury has adopted procedures
designed to address this
recommendation, including a policy to
discuss only warrant valuation inputs
and methodologies prior to receiving
a bid, generally to limit discussion
to valuation ranges after receiving
approval from the Warrant Committee,
and to note the provision of any added
information in the Committee minutes.
However, Treasury believes that its
existing internal controls are sufficient
to ensure adequate consistency in the
negotiation process.

Treasury has agreed to document the
dates, participants, and subject line of
calls. It has refused to document the
substance of such conversations.

Treasury has indicated that it has
implemented this recommendation.
Although the detail of the minutes
has improved, Treasury is still not
identifying how each member of the
committee casts his or her vote.

Comments

Continued on next page

In Process

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

X

X

Partially
Implemented

X

X

Implemented

Treasury states that it has developed
guidance and provided that guidance
to the exceptional assistance
participants that were remaining in
TARP as of June 30, 2011. Treasury
has not addressed other factors
contained in this recommendation,
citing its belief that materiality should
be subject to a fact and circumstances
review.

Treasury should develop guidelines that apply consistently
across TARP participants for when a violation is sufficiently
material to merit reporting, or in the alternative require that
all violations be reported.

Treasury should promptly take steps to verify TARP
participants’ conformance to their obligations, not only by
ensuring that they have adequate compliance procedures
but also by independently testing participants’ compliance.

Treasury should consider more frequent surveys of a CDCI
participant’s use of TARP funds than annually as currently
contemplated. Quarterly surveys would more effectively
emphasize the purpose of CDCI.

(CONTINUED)

53

Recommendation

SIGTARP RECOMMENDATIONS TABLE

80
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

When Treasury considers whether to accept an existing CPP
participant into SBLF, because conditions for many of the
relevant institutions have changed dramatically since they
were approved for CPP, Treasury and the bank regulators
should conduct a new analysis of whether the applying
institution is sufficiently healthy and viable to warrant
participation in SBLF.

When Treasury conducts the new analysis of an institution’s
health and viability, the existing CPP preferred shares should
not be counted as part of the institution’s capital base.

64

65

X

X

X

Implemented

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should launch a broad-based information
campaign, including public service announcements in target
markets that focus on warnings about potential fraud, and
include conspicuous fraud warnings whenever it makes
broad public announcements about the HAMP program.

63

Treasury should reconsider the length of the minimum term
of HAMP’s unemployment forbearance program.

62

*

Treasury should adopt a uniform appraisal process across
all HAMP and HAMP-related short-sale and principal
reduction programs consistent with FHA’s procedures.

61

Treasury should re-evaluate the voluntary nature of its
principal reduction program and, irrespective of whether it
is discretionary or mandatory, consider changes to better
maximize its effectiveness, ensure to the greatest extent
possible the consistent treatment of similarly situated
borrowers, and address potential conflict of interest issues.

60

*

For each HAMP-related program and subprogram, Treasury
should publish the anticipated costs and expected
participation in each and that, after each program is
launched, it report monthly as to the program’s performance
against these expectations.

(CONTINUED)

59

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

Not Implemented

X

TBD/NA

Comments

Continued on next page

Treasury refused to adopt this
recommendation, citing its belief
that current CPP participants may be
unfairly disadvantaged in their SBLF
applications if their existing CPP
investments are not counted as part
of their capital base, and that SBLF
“already provides substantial hurdles
that CPP recipients must overcome”
that don’t apply to other applicants.

For more than a year, Treasury
refused to adopt this recommendation,
even though average U.S. terms of
unemployment were lengthening.
However, in July 2011, the
Administration announced a policy
change, and Treasury has extended the
minimum term of the unemployment
program from three months to 12
months, effective October 1, 2011.

Treasury plans to maintain the
voluntary nature of the program,
providing an explanation that on its
face seems unpersuasive to SIGTARP.
SIGTARP will continue to monitor
performance.

Treasury has provided anticipated
costs, but not expected participation.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

81

Treasury, as part of its due diligence concerning any
proposed restructuring, recapitalization, or sale of its CPP
investment to a third party, should provide to SIGTARP the
identity of the CPP institution and the details of the proposed
transaction.

*

*

*

*

*

67

68

69

70

71

X

X

X

X

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

OFS should adopt the legal fee bill review standards
and procedures contained in the FDIC’s Outside Counsel
Deskbook, or establish similarly specific instructions and
guidance for OFS COTRs to use when reviewing legal fee
bills, and incorporate those instructions and guidance into
OFS written policies.

OFS should include in its open legal service contracts
detailed requirements for law firms on the preparation and
submission of legal fee bills, or separately provide the
instructions to law firms and modify its open contracts,
making application of the instructions mandatory.

OFS should adopt the legal fee bill submission standards
contained in the FDIC’s Outside Counsel Deskbook, or
establish similarly detailed requirements for how law
firms should prepare legal fee bills and describe specific
work performed in the bills, and which costs and fees are
allowable and unallowable.

When a CPP participant refinances into SBLF and seeks
additional taxpayer funds, Treasury should provide to
SIGTARP the identity of the institution and details of the
proposed additional SBLF investment.

Treasury should take steps to prevent institutions that are
refinancing into the SBLF from CPP from securing windfall
dividend reductions without any relevant increase in lending.

(CONTINUED)

66

Recommendation

SIGTARP RECOMMENDATIONS TABLE

X

In Process

X

Not Implemented

TBD/NA

Continued on next page

Treasury told SIGTARP that OFS has
held training on its newly adopted
guidance prescribing how legal fee bills
should be prepared with OFS COTRs
and other staff involved in the review
of legal fee bills, and that the OFS
COTRs will begin reviewing invoices in
accordance with its new guidance for
periods starting with March 2011. OFS
also stated that it incorporated relevant
portions of its training on the new legal
fee bill review standards into written
procedures.

Treasury told SIGTARP that OFS has
distributed its new guidance to all
law firms currently under contract to
OFS. Treasury further stated that OFS
will work with Treasury’s Procurement
Services Division to begin modifying
base contracts for OFS legal services
to include those standards as well.

Treasury told SIGTARP that OFS has
created new guidance using the FDIC’s
Outside Counsel Deskbook and other
resources.

Treasury refused to adopt this
recommendation, suggesting that
its adoption would subvert the will
of Congress and that SIGTARP’s
recommendation “may not be helpful”
because “it is unclear that using this
statutorily mandated baseline will lead
to anomalies.”

Comments

82
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

*

*

*

73

74

75

Treasury should require that MHA servicer communications
with homeowners relating to changes in the status or
terms of a homeowner’s modification application, trial or
permanent modification, HAFA agreement, or any other
significant change affecting the homeowner’s participation in
the MHA program, be in writing.

Treasury should ensure that more detail is captured by
the MHA Compliance Committee meeting minutes. At a
minimum, the minutes should include MHA-C’s proposed
rating for each servicer, the committee members’ qualitative
and quantitative considerations regarding each servicer’s
ratings, the votes of each committee member, the final
rating for each servicer, justification for any difference in
that rating with MHA-C’s proposed rating, and any followup including escalation to Treasury’s Office of General
Counsel or the Assistant Secretary and the outcomes of that
escalation.

Treasury should establish detailed guidance and internal
controls governing how the MHA Servicer Compliance
Assessment will be conducted and how each compliance
area will be weighted.

OFS should review previously paid legal fee bills to
identify unreasonable or unallowable charges, and seek
reimbursement for those charges, as appropriate.

(CONTINUED)
Implemented

X

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

*

72

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury has refused to adopt
this recommendation, saying it
already requires a loan servicer to
communicate in writing with a borrower
an average of 10 times. However,
most written requirements apply to
a HAMP application and Treasury’s
response fails to address homeowners
who receive miscommunication from
servicers on important milestones or
changes.

Minutes of recent MHA Compliance
Committee meetings contain brief
explanations of servicer assessment
rating decisions. However, these
minutes do not explain the Committee’s
deliberations in detail, do not indicate
how members voted beyond a tally of
the votes, and do not discuss follow-up
actions or escalation.

Treasury made important changes to
its servicer assessments by including
metrics for the ratings, including
several quantitative metrics. However,
qualitative metrics to assess the
servicer’s internal controls in the
three ratings categories remain, and
guidelines or criteria for rating the
effectiveness of internal controls are
still necessary.

Although Treasury previously agreed
to implement this recommendation,
Treasury only reviewed the legal fee
bills for one of the five law firms that
SIGTARP had already described as
unreasonable. Treasury refuses to
seek any reimbursement for those
charges. See also Recommendation
81 concerning this issue.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

83

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

The Treasury contracting officer should disallow and seek
recovery from Simpson Thacher & Bartlett LLP for $91,482
in questioned, ineligible fees and expenses paid that were
not allowed under the OFS contract. Specifically, those are
$68,936 for labor hours billed at rates in excess of the
allowable maximums set in contract TOFS-09-0001, task
order 1, and $22,546 in other direct costs not allowed
under contract TOFS-09-007, task order 1.

Treasury must ensure that all servicers participating in MHA
comply with program requirements by vigorously enforcing
the terms of the servicer participation agreements, including
using all financial remedies such as withholding, permanently
reducing, and clawing back incentives for servicers who
fail to perform at an acceptable level. Treasury should be
transparent and make public all remedial actions taken
against any servicer.

80

*

78

Treasury should publicly assess the top 10 MHA servicers’
program performance against acceptable performance
benchmarks in the areas of: the length of time it takes
for trial modifications to be converted into permanent
modifications, the conversion rate for trial modifications
into permanent modifications, the length of time it takes
to resolve escalated homeowner complaints, and the
percentage of required modification status reports that are
missing.

Treasury should specifically determine the allowability of
$7,980,215 in questioned, unsupported legal fees and
expenses paid to the following law firms: Simpson Thacher
& Bartlett LLP ($5,791,724); Cadwalader Wickersham &
Taft LLP ($1,983,685); Locke Lord Bissell & Liddell LLP
($146,867); and Bingham McCutchen LLP (novated from
McKee Nelson LLP, $57,939).

*

77

Treasury should establish benchmarks and goals for
acceptable program performance for all MHA servicers,
including the length of time it takes for trial modifications to
be converted into permanent modifications, the conversion
rate for trial modifications into permanent modifications,
the length of time it takes to resolve escalated homeowner
complaints, and the percentage of required modification
status reports that are missing.

(CONTINUED)

79

*

76

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

X

X

X

Not Implemented

TBD/NA

Continued on next page

Treasury neither agreed nor disagreed
with the recommendation.

Treasury neither agreed nor disagreed
with the recommendation.

Treasury has rejected this important
recommendation, stating that it
believes that the remedies enacted
have been appropriate and that
appropriate transparency exists.

Treasury has rejected this
recommendation, saying only
that it would “continue to develop
and improve the process where
appropriate.”

Treasury told SIGTARP that it already
established benchmarks in this area,
including that trial periods should last
three to four months, and escalated
cases should be resolved in 30
days. If these are the benchmarks
for acceptable performance, many
servicers have missed the mark.
Also, Treasury has yet to establish
a benchmark for conversion rates
from trial modifications to permanent
modifications.

Comments

84
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Treasury should pre-approve specified labor categories and
rates of all contracted legal staff before they are allowed to
work on and charge time to OFS projects.

Treasury, in consultation with Federal banking regulators,
should develop a clear TARP exit path to ensure that
as many community banks as possible repay the TARP
investment and prepare to deal with the banks that cannot.
Treasury should develop criteria pertaining to restructurings,
exchanges, and sales of its TARP investments (including any
discount of the TARP investment, the treatment of unpaid
TARP dividend and interest payments, and warrants).

*

*

83

84

85

Treasury should protect borrower personally identifiable
information (“PII”) and other sensitive borrower information
compiled for the Hardest Hit Fund (“HHF”) by: (1) requiring
that within 90 days, all Housing Finance Agencies (and
their contractors) (“HFAs”) participating in HHF develop
and implement effective policies and procedures to ensure
protection against unauthorized access, use, and disposition
of PII and other sensitive borrower information; (2) Treasury
reviewing each HFA’s policies and procedures to determine
if they are effective, and taking such action as is required to
ensure effectiveness; (3) requiring that all parties granted
access to borrower information should be made aware
of restrictions on copying and disclosing this information;
(4) requiring annual certification by HFAs to Treasury that
they are in compliance with all applicable laws, policies
and procedures pertaining to borrower information; and (5)
requiring that HFAs promptly notify Treasury and SIGTARP
within 24 hours, when a breach of security has occurred
involving borrower information.

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

86

Treasury should require in any future solicitation for legal
services multiple rate categories within the various partner,
counsel, and associate labor categories. The additional
labor rate categories should be based on the number of
years the attorneys have practiced law.

82

Treasury should assess whether it should renegotiate the
terms of its Capital Purchase Program contracts for those
community banks that will not be able to exit TARP prior
to the dividend rate increase in order to help preserve the
value of taxpayers’ investments.

Treasury should promptly review all previously paid legal fee
bills from all law firms with which it has a closed or open
contract to identify unreasonable or unallowable charges
and seek reimbursement for those charges, as appropriate.

(CONTINUED)

81

Recommendation

SIGTARP RECOMMENDATIONS TABLE

X

X

In Process

X

X

X

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury has said it will adopt this
recommendation in part. Treasury did
not agree to review each HFA’s policies
and procedures to determine if they
are effective. Also, Treasury did not
require notification within 24 hours or
notification to SIGTARP. SIGTARP will
monitor Treasury’s efforts to implement
the recommendation.

Treasury rejected this recommendation
without ever addressing why.

Treasury responded that it continues
its efforts to wind down CPP through
repayments, restructuring, and sales.
Treasury has not addressed the criteria
for these divestment strategies or
consulted with regulators.

Treasury neither agreed nor disagreed
with the recommendation.

Treasury neither agreed nor disagreed
with the recommendation.

Treasury only reviewed the legal fee
bills for one of the five law firms that
SIGTARP had already described as
unreasonable. Treasury refuses to seek
any reimbursements for those charges.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

85

*

*

88

89

The Office of the Special Master should develop more
robust policies, procedures, or guidelines to help ensure
that its pay determination process and its decisions are
evenhanded. These measures will improve transparency
and help the Office of the Special Master consistently apply
the Interim Final Rule principles of “appropriate allocation,”
“performance-based compensation,” and “comparable
structures and payments.”

The Office of the Special Master should better document
its use of market data in its calculations. At a minimum, the
Office of the Special Master should prospectively document
which companies and employees are used as comparisons
in its analysis of the 50th percentile of the market, and
it should also maintain records and data so that the
relationship between its determinations and benchmarks are
clearly understood.

To ensure that the Office of the Special Master consistently
grants exceptions to the $500,000 cash salary cap, the
Office of the Special Master should substantiate each
exception requested and whether the requests demonstrate
or fail to demonstrate “good cause.”

(CONTINUED)

X

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

*

87

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

Not Implemented

TBD/NA

Continued on next page

Although Treasury created written
policies and procedures in June 2013,
OSM’s policy only contains Treasury’s
rule and language from the statute,
all of which was existing prior to
OSM’s creation. Therefore, OSM has
not created its own formal policies.
OSM’s written procedures are merely
a documentation of some of OSM’s
existing practices and guidelines, but
not others as contained in the pay
determination letters, and were not a
new development of robust policies,
procedures or guidelines. They do not
establish meaningful criteria Treasury
can follow for approving cash salaries
exceeding $500,000, pay exceeding
market medians, pay raises, or the use
of long term restricted stock.

In 2012, Treasury began to preserve
the independent market data on which
it relied to evaluate the market data
submitted by the companies.

While Treasury’s documentation of
granting these cash salaries has
improved in that it includes some
additional information beyond
the company’s assertions, that
information is primarily market
data that the company provides.
The recommendation was not to
document better, but instead to
“substantiate” which requires some
criteria for granting exceptions as
well as independent analysis beyond
the company’s assertions. Treasury’s
policies and procedures do not contain
any criteria for approving cash salaries
exceeding $500,000 or any discussion
of any analysis by Treasury.

Comments

86
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

To continue to allow for effective compliance and
enforcement in HAMP Tier 2 after the trial modification has
started, Treasury should require that, prior to conversion
of a trial modification to a permanent modification, the
borrower certify under penalty of perjury that none of the
occupancy circumstances stated in the RMA have changed.

To prevent a property that has received a HAMP Tier 2
modification from remaining vacant for an extended period
of time after a lease expires or a tenant vacates,
(a) Treasury should require that borrowers immediately notify
their servicer if the property has remained vacant for more
than three months.
(b) Treasury should require servicers to provide monthly
reports to Treasury of any properties that have remained
vacant for more than three months.(c) Treasury should bar
payment of TARP-funded incentives to any participant for
a loan modification on a property that has been reported
vacant for more than three months, until such time as the
property has been re-occupied by a tenant and the borrower
has provided third-party verification of occupancy.

91

92

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

In order to allow for effective compliance and enforcement
in HAMP Tier 2, Treasury should require that the borrower
prove that the property has been rented and is occupied
by a tenant at the time the borrower applies for a loan
modification, as opposed to requiring only a certification
that the borrower intends to rent the property. As part of
the Request for Mortgage Assistance (“RMA”) application
for HAMP Tier 2, the borrower should provide the servicer
with a signed lease and third-party verified evidence of
occupancy in the form of documents showing that a renter
lives at the property address, such as a utility bill, driver’s
license, or proof of renter’s insurance. In the case of
multiple-unit properties under one mortgage Treasury should
require that the borrower provide the servicer with evidence
that at least one unit is occupied by a tenant as part of the
RMA.

(CONTINUED)

90

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury told SIGTARP that
implementing this recommendation
would create significant additional
procedures and documentation
requirements. With no compliance
regime to determine that a renter is in
place, the program remains vulnerable
to TARP funds being paid to modify
mortgages that do not fit within the
intended expansion of the program.

Treasury rejected this
recommendation, stating that eligibility
is not retested prior to conversion.
This does not go far enough. Requiring
only a self-certification, without a
strong compliance and enforcement
regime to ensure that the intent
is carried out and the property is
actually rented, leaves the program
vulnerable to risks that TARP funds
will pay investors for modifications for
mortgages on vacation homes that are
not rented, and may delay, as opposed
to prevent, foreclosures and increase
HAMP redefault rates.

Treasury responded to this
recommendation by requiring that
borrowers certify that they intend to
rent the property for at least five years
and that they will make reasonable
efforts to rent. This does not go
far enough. Requiring only a selfcertification, under penalty of perjury,
without a strong compliance and
enforcement regime to ensure that the
intent is carried out and the property
is actually rented, leaves the program
vulnerable to risks that TARP funds
will pay investors for modifications for
mortgages on vacation homes that are
not rented, and may delay, as opposed
to prevent, foreclosures and increase
HAMP redefault rates.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

87

Given the expected increase in the volume of HAMP
applications due to the implementation of HAMP Tier 2,
Treasury should convene a summit of key stakeholders to
discuss program implementation and servicer ramp-up and
performance requirements so that the program roll-out is
efficient and effective.

To ensure servicer compliance with HAMP Tier 2 guidelines
and assess servicer performance,
(a) Treasury should include additional criteria in its servicer
compliance assessments that measure compliance with the
program guidelines and requirements of HAMP Tier 2.
(b) Treasury should develop and publish separate metrics
related to HAMP Tier 2 in the compliance results and
program results sections of the quarterly Making Home
Affordable (“MHA”) servicer assessments of the Top 10 MHA
servicers.

To allow for assessment of the progress and success
of HAMP Tier 2, Treasury should set meaningful and
measurable goals, including at a minimum the number of
borrowers Treasury estimates will be helped by HAMP Tier
2. Treasury should unambiguously and prominently disclose
its goals and report monthly on its progress in meeting
these goals.

Treasury should set meaningful and measurable
performance goals for the Hardest Hit Fund program
including, at a minimum, the number of homeowners
Treasury estimates will be helped by the program, and
measure the program’s progress against those goals.

94

95

96

97

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

In order to protect against the possibility that the extension
and expansion of HAMP will lead to an increase in mortgage
modification fraud,
(a) Treasury should require that servicers provide the
SIGTARP/CFPB/Treasury Joint Task Force Consumer Fraud
Alert to all HAMP-eligible borrowers as part of their monthly
mortgage statement until the expiration of the application
period for HAMP Tier 1 and 2.
(b) Treasury should undertake a sustained public service
campaign as soon as possible both to reach additional
borrowers who could potentially be helped by HAMP Tier 2
and to arm the public with complete, accurate information
about the program to avoid confusion and delay, and to
prevent fraud and abuse.

(CONTINUED)

93

Recommendation

SIGTARP RECOMMENDATIONS TABLE

X

In Process

X

X

X

X

Not Implemented

TBD/NA

Continued on next page

Treasury has not implemented this
recommendation. It is important that
Treasury sets meaningful goals and
metrics to identify program successes
and set-backs, in order to change the
program as necessary, and to provide
transparency and accountability.

Treasury has rejected this
recommendation. Treasury’s refusal
to provide meaningful and measurable
goals leaves it vulnerable to
accusations that it is trying to avoid
accountability.

Treasury said that it will include metrics
in the future. SIGTARP will continue to
monitor Treasury’s implementation of
this recommendation.

Treasury has not implemented this
recommendation. Treasury has not
held a summit of all key stakeholders
to make the program roll-out efficient
and effective.

Treasury has not implemented this
recommendation. It is important
that Treasury educate as many
homeowners as possible with accurate
information about HAMP in an effort to
prevent mortgage modification fraud.

Comments

88
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Treasury should set milestones at which the state housing
finance agencies in the Hardest Hit Fund must review the
progress of individual state programs and make program
adjustments from this review.

Treasury should publish on its website and in the Housing
Scorecard on a quarterly basis the total number of
homeowners assisted, funds drawn down by states, and
dollars expended for assistance to homeowners, assistance
committed to homeowners, and cash on hand, aggregated
by all state Hardest Hit Fund programs.

Treasury should develop an action plan for the Hardest
Hit Fund that includes steps to increase the numbers of
homeowners assisted and to gain industry support for
Treasury-approved HHF programs. Treasury should set
interim metrics for how many homeowners it intends to
assist in a Treasury-defined time period in each particular
program (such as principal reduction, second lien reduction,
or reinstatement). If Treasury cannot achieve the desired
level of homeowners assisted in any one program area in
the defined time period, Treasury should put the funds to
better use toward programs that are reaching homeowners.

99

100

101

Implemented

X

X

X

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should instruct state housing finance agencies
in the Hardest Hit Fund to set meaningful and measurable
overarching and interim performance goals with appropriate
metrics to measure progress for their individual state
programs.

(CONTINUED)

98

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury has rejected this
recommendation. It is important that
Treasury change the status quo and
fulfill its role as steward over TARP
programs, make determinations of
which programs are successful and
which programs are not working, and
ensure that HHF funds are reaching
homeowners. This may include
putting the funds toward programs
that are more successful at reaching
homeowners. It is unacceptable to
delegate all of this responsibility to the
states.

Treasury has only partially implemented
this recommendation. Treasury
recently started publishing some
aggregated data on its website.
However, Treasury does not publish all
of the data SIGTARP recommended nor
does Treasury publish any data at all
concerning the Hardest Hit Fund in the
Housing Scorecard.

Treasury issued letters to five housing
finance agencies requiring those
states to provide an action plan with
measurable interim and overall goals,
including benchmarks, to improve the
level of homeowner assistance under
the HHF program. Treasury should
fully adopt SIGTARP’s recommendation
with the remaining 14 housing finance
agencies in the HHF program. SIGTARP
will continue to monitor implementation
of this recommendation.

Treasury issued letters to five housing
finance agencies requiring those
states to provide an action plan with
measurable interim and overall goals,
including benchmarks, to improve the
level of homeowner assistance under
the HHF program. Treasury should
fully adopt SIGTARP’s recommendation
with the remaining 14 housing finance
agencies in the HHF program. SIGTARP
will continue to monitor implementation
of this recommendation.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

89

Treasury should ensure that servicers use accurate
information when evaluating net present value test results
for homeowners applying to HAMP and should ensure that
servicers maintain documentation of all net present value
test inputs. To the extent that a servicer does not follow
Treasury’s guidelines on input accuracy and documentation
maintenance, Treasury should permanently withhold
incentives from that servicer.

Treasury should require servicers to improve their
communication with homeowners regarding denial of a
HAMP modification so that homeowners can move forward
with other foreclosure alternatives in a timely and fully
informed manner. To the extent that a servicer does not
follow Treasury’s guidelines on these communications,
Treasury should permanently withhold incentives from that
servicer.

Treasury should ensure that more detail is captured by the
Making Home Affordable Compliance Committee meeting
minutes regarding the substance of discussions related to
compliance efforts on servicers in HAMP. Treasury should
make sure that minutes clearly outline the specific problems
encountered by servicers, remedial options discussed, and
any requisite actions taken to remedy the situation.

In order to protect taxpayers who funded TARP against any
future threat that might result from LIBOR manipulation,
Treasury and the Federal Reserve should immediately
change any ongoing TARP programs including, without
limitation, PPIP and TALF, to cease reliance on LIBOR.

103

104

105

106

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should stop allowing servicers to add a risk
premium to Freddie Mac’s discount rate in HAMP’s net
present value test.

(CONTINUED)

102

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

X

X

X

Not Implemented

TBD/NA

Continued on next page

Neither Treasury nor the Federal
Reserve has agreed to implement this
recommendation despite Treasury
telling SIGTARP that it “share[s
SIGTARP’s] concerns about the
integrity” of LIBOR, and the Federal
Reserve telling SIGTARP that it agreed
that “recent information regarding the
way the LIBOR has been calculated has
created some uncertainty about the
reliability of the rate.”

Treasury has not implemented this
recommendation. SIGTARP found a
lack of detail in Treasury’s meeting
minutes and because Treasury failed
to document its oversight, SIGTARP
was unable to verify Treasury’s role
in the oversight of servicers or its
compliance agent Freddie Mac.

Treasury has not implemented
this recommendation. Servicers’
failure to communicate denial in
a timely manner can have serious
consequences because a delay may
prevent homeowners from finding other
foreclosure alternatives sooner.

Treasury has not implemented this
recommendation. Servicer errors using
NPV inputs and the lack of properly
maintained records on NPV inputs have
diminished compliance and placed the
protection of homeowner’s rights to
challenge servicer error at risk.

Treasury has not implemented this
recommendation. The addition of a
risk premium reduces the number
of otherwise qualified homeowners
Treasury helps through HAMP. Treasury
should implement this recommendation
to increase assistance to struggling
homeowners.

Comments

90
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

In order to fulfill Treasury’s responsibility to wind down its
TARP investments in a way that promotes financial stability
and preserves the strength of our nation’s community
banks, Treasury should undertake an analysis in consultation
with Federal banking regulators that ensures that it is exiting
its Capital Purchase Program investments in a way that
satisfies the goals of CPP, which are to promote financial
stability, maintain confidence in the financial system and
enable lending. This financial stability analysis of a bank’s
exit from TARP should determine at a minimum: (1) that the
bank will remain healthy and viable in the event of an auction
of Treasury’s preferred shares; and (2) that the bank’s exit
from TARP does not have a negative impact on the banking
industry at a community, state, regional, and national level.
Treasury should document that analysis and consultation.

Treasury should better document its decision whether or not
to auction its preferred shares in a TARP bank to adequately
reflect the considerations made for each bank and detailed
rationale.

Each year, Treasury should reevaluate total compensation
for those employees at TARP exceptional assistance
companies remaining in the Top 25 from the prior year,
including determining whether to reduce total compensation.

109

110

111

X

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

In order to fulfill Treasury’s responsibility to wind down its
TARP Capital Purchase Program investments in a way that
protects taxpayer interests, before allowing a TARP bank
to purchase Treasury’s TARP shares at a discount to the
TARP investment (for example as the successful bidder
at auction), Treasury should undertake an analysis, in
consultation with Federal banking regulators, to determine
that allowing the bank to redeem its TARP shares at a
discount to the TARP investment outweighs the risk that the
bank will not repay the full TARP investment. Treasury should
document that analysis and consultation.

108

*

In order to protect taxpayers who invested TARP funds
into AIG to the fullest extent possible, Treasury and the
Federal Reserve should recommend to the Financial Stability
Oversight Council that AIG be designated as a systemically
important financial institution so that it receives the
strongest level of Federal regulation.

(CONTINUED)

107

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

X

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury’s new procedures state that
OSM may reduce pay, however OSM
did not address any guidelines or
criteria that it would consider in doing
so.

Treasury has not agreed to implement
this important recommendation, but
is reviewing its practices in light of
SIGTARP’s recommendations. SIGTARP
will monitor Treasury’s efforts to
implement this recommendation.

Treasury has not agreed to implement
this important recommendation.

Treasury has not agreed to implement
this important recommendation.

On July 8, 2013, the Financial Stability
Oversight Council unanimously voted
to designate AIG as systemically
important.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

91

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

As a result of the findings of Treasury’s research and
analysis into the causes of HAMP redefaults, and
characteristics of redefaults, Treasury should modify
aspects of HAMP and the other TARP housing programs in
ways to reduce the number of redefaults.

To be consistent with Treasury’s Interim Final Rule that the
portion of performance-based compensation compared
to total compensation should be greater for positions that
exercise higher levels of responsibility, Treasury should
return to using long-term restricted stock for employees,
particularly senior employees such as CEOs.

116

*

114

Treasury should independently analyze whether good cause
exists to award a Top 25 employee a pay raise or a cash
salary over $500,000. To ensure that the Office of the
Special Master has sufficient time to conduct this analysis,
Treasury should allow OSM to work on setting Top 25 pay
prior to OSM’s receiving the company pay proposals, which
starts the 60-day timeline.

Treasury should conduct in-depth research and analysis to
determine the causes of redefaults of HAMP permanent
mortgage modifications and the characteristics of loans
or the homeowner that may be more at risk for redefault.
Treasury should require servicers to submit any additional
information that Treasury needs to conduct this research
and analysis. Treasury should make the results of this
analysis public and issue findings based on this analysis,
so that others can examine, build on, and learn from this
research.

*

113

To ensure that Treasury effectively applies guidelines aimed
at curbing excessive pay and reducing risk taking, Treasury
should develop policies, procedures, and criteria for
approving pay in excess of Treasury guidelines.

(CONTINUED)

115

*

112

Recommendation

SIGTARP RECOMMENDATIONS TABLE

X

In Process

X

X

X

Not Implemented

X

TBD/NA

Continued on next page

Treasury has agreed to consider this
important recommendation, based on
the results of research it is conducting.
SIGTARP will monitor Treasury’s efforts
to implement the recommendation.

Treasury has agreed to implement this
important recommendation. Treasury
told SIGTARP that it is in the process
of conducting the recommended
research. SIGTARP will monitor
Treasury’s efforts to implement the
recommendation.

In 2013, Treasury allowed some
GM employees not to have longterm restricted stock and effectively
approved only 5% of all of Ally
employees pay in long-term restricted
stock and failed to consider positions
and levels of authority on an individual
basis, as called for by Treasury’s rule.
In 2014, Treasury eliminated long-term
restricted stock for Ally employees.

Treasury has not established criteria
for awarding an employee a pay
raise or a cash salary exceeding
$500,000. Such criteria is important
to independently analyzing the basis
for awarding pay raises or cash
salaries greater than $500,000 and
ensuring consistency in decisionmaking. Treasury’s documentation
of its justification does not evidence
independent analysis, but instead sets
forth the company’s assertions and
market data supplied by the company.

Treasury has not established clear
policies, procedures, and criteria for
approving pay in excess of Treasury’s
guidelines such as the 50th percentile,
cash salaries greater than $500,000,
or use of long term restricted stock.

Comments

92
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

In the letter Treasury already requires servicers to send to
homeowners who have redefaulted on a HAMP modification
about possible options to foreclosure, Treasury should
require the servicers to include other available alternative
assistance options under TARP such as the Hardest Hit
Fund and HAMP Tier 2, so that homeowners can move
forward with other alternatives, if appropriate, in a timely
and fully informed manner. To the extent that a servicer
does not follow Treasury’s rules in this area, Treasury should
permanently withhold incentives from that servicer.

Treasury and the Federal banking regulators should
improve coordination when collaborating on current and
future initiatives by (1) defining the roles of all participants
at the outset of collaborative efforts by creating precise
and directed governing documents (i.e., charters) that
clearly address the responsibilities of each entity; and (2)
jointly documenting processes and procedures, including
flowcharts, risk management tools, and reporting systems
to ensure that objectives are met. Each participant should
sign off to demonstrate their understanding of, and
agreement with, these procedures.

To increase small-business lending by former TARP banks
participating in SBLF, Treasury should work with the banks
to establish new, achievable plans to increase lending going
forward.

To preserve the amount of capital former TARP banks
participating in SBLF have to lend, the primary Federal
banking regulators (the Federal Reserve, FDIC, or OCC)
should not approve dividend distributions to common
shareholders of former TARP banks that have not effectively
increased small-business lending while in SBLF.

In order to prevent confusion, promote transparency, and
present taxpayers who funded TARP with clear and accurate
reporting, when Treasury discusses the amount of TARP
funds (or CPP funds) recovered or repaid, Treasury should
not count the $2.1 billion in TARP investments that Treasury
refinanced into the Small Business Lending Fund, which is
outside of TARP.

118

119

120

121

122

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should require servicers to develop and use
an “early warning system” to identify and reach out to
homeowners that may be at risk of redefaulting on a
HAMP mortgage modification, including providing or
recommending counseling and other assistance and
directing them to other TARP housing programs.

(CONTINUED)

117

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

X

X

X

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury has not agreed to implement
this important recommendation.

Treasury has not agreed to implement
this important recommendation.

Treasury has not agreed to implement
this important recommendation.

Treasury has not agreed to implement
this important recommendation.

Treasury has agreed to implement
this important recommendation and
is considering taking further action.
SIGTARP will monitor Treasury’s efforts
to implement the recommendation.

Treasury has agreed to implement
this important recommendation and
is considering taking further action.
SIGTARP will monitor Treasury’s efforts
to implement the recommendation.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

93

Treasury should establish an achievable benchmark for a
redefault rate on HAMP permanent mortgage modifications
that represents acceptable program performance and
publicly report against that benchmark.

Treasury should publicly assess and report quarterly on
the status of the ten largest HAMP servicers in meeting
Treasury’s benchmark for an acceptable homeowner
redefault rate on HAMP permanent mortgage modifications,
indicate why any servicer fell short of the benchmark,
require the servicer to make changes to reduce the
number of homeowners who redefault in HAMP, and use
enforcement remedies including withholding, permanently
reducing, or clawing back incentive payments for any
servicer that fails to comply in a timely manner.

To protect the investment taxpayers made through TARP in
community banks and to ensure that these banks continue
to lend in their communities which is a goal of TARP’s Capital
Purchase Program, Treasury should enforce its right to
appoint directors for CPP institutions that have failed to pay
six or more quarterly TARP dividend or interest payments.

124

125

126

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

To ensure that homeowners in HAMP get sustainable relief
from foreclosure, Treasury should research and analyze
whether and to what extent the conduct of HAMP mortgage
servicers may contribute to homeowners redefaulting on
HAMP permanent mortgage modifications. To provide
transparency and accountability, Treasury should publish its
conclusions and determinations.

(CONTINUED)

123

Recommendation

SIGTARP RECOMMENDATIONS TABLE

X

X

In Process

X

X

Not Implemented

TBD/NA

Continued on next page

Treasury has made some progress
implementing this important
recommendation.

Treasury has not agreed to implement
this important recommendation.

Treasury has made progress toward
implementing this recommendation.
In Treasury’s quarterly “MHA Servicer
Assessment,” published in its October
2013 “Making Home Affordable
Performance Report,” Treasury
included a new servicer performance
metric, assessing whether seven HAMP
servicers complied with Treasury’s
guidelines concerning homeowners’
HAMP modifications that servicers
disqualified. SIGTARP looks forward
to working with Treasury to fully
implement this recommendation.

Treasury has not agreed to implement
this important recommendation.

Comments

94
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

To protect the investment taxpayers made in TARP and to
ensure that institutions continue to lend in low and moderate
income communities which is the goal of TARP’s Community
Development Capital Initiative, Treasury should enforce its
right to appoint directors to CDCI institutions that have failed
to pay eight or more TARP quarterly dividend (or interest)
payments.

Treasury should increase the amount of the annual incentive
payment paid to each homeowner who remains in HAMP.
Treasury should require the mortgage servicer to apply
the annual incentive payment earned by the homeowner
to reduce the amount of money that the homeowner must
pay to the servicer for the next month’s mortgage payment
(or monthly payments if the incentive exceeds the monthly
mortgage payment), rather than to reduce the outstanding
principal balance of the mortgage.

To educate homeowners and help them avoid becoming
victims to mortgage modification fraud, Treasury should
prominently display all of the information containing in
the Consumer Fraud Alert: “Tips For Avoiding Mortgage
Modification Scams” created jointly by SIGTARP, Treasury,
and the Consumer Financial Protection Bureau on the home
page of websites related to HAMP, including Treasury’s TARP
website and the “Making Home Affordable” website along
with simple and direct information on SIGTARP’s mission and
how to contact SIGTARP’s hotline if they suspect mortgage
modification fraud.

128

129

130

X

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

In enforcing its right to appoint directors to the board
of CPP institutions that have failed to pay six or more
quarterly dividend or interest payments, Treasury should
prioritize appointing directors to the board of those CPP
institutions that meet one or more of the following criteria:
(1) rejected Treasury’s request to send officials to observe
board meetings; (2) have failed to pay a large number of
TARP dividend payments or that owe the largest amount
of delinquent TARP dividends; or (3) is currently subject to
an order from their Federal banking regulator, particularly
orders related to the health or condition of the bank or
its board of directors. In addition, Treasury should use
information learned from Treasury officials that have
observed the bank’s board meetings to assist in prioritizing
its determination of banks to which Treasury should appoint
directors.

(CONTINUED)

127

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

X

X

X

Not Implemented

TBD/NA

Comments

Continued on next page

Treasury has agreed to implement this
important recommendation.

Treasury has not agreed to implement
this important recommendation.

Treasury has not agreed to implement
this important recommendation.

Treasury has not agreed to implement
this important recommendation.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

95

Treasury should publicly report for each of the top 10
servicers how many homeowners who completed a HAMP
application for which Treasury paid NeighborWorks were
denied by the servicer for a HAMP trial modification.

Treasury should use the results of SIGTARP-recommended
monitoring and reporting on the MHA Outreach and
Borrower Intake Project to determine whether there are
areas of improvement.

Treasury should post the original surveys received from
CPP and CDCI institutions on how they used TARP funds for
each year to the Treasury website. The original surveys and
responses should not be subjected to any manipulations or
changes to calculate survey results.

Treasury should develop written repeatable operating
procedures for submitting and receiving survey responses
from CPP and CDCI recipients on how they used TARP
funds. The procedures should include the functional roles
and responsibilities and automated and manual process
steps involved, such as documenting and determining the
survey population, compiling and analyzing the responses,
verifying and validating the data, resolving discrepancies,
and posting the responses on the Treasury website.

Treasury should take aggressive action to enforce its
requests that all CPP institutions report annually on their use
of TARP funds, and its requirement that all CDCI institutions
report annually on their use of TARP funds. At a minimum,
Treasury should draft a letter to each CPP and CDCI
institution that fails to report each year, and follow up on
that letter with the institution. Treasury should exercise its
rights to compel reporting on use of TARP funds by CDCI
institutions.

Treasury should fix all errors and/or deficiencies, which
SIGTARP previously provided to Treasury, and submit
documentation to SIGTARP confirming the correction/
elimination of these errors.

132

133

134

135

136

137

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should determine how many homeowners who
completed a HAMP application for which Treasury paid
NeighborWorks under the MHA Outreach and Borrower
Intake Project are accepted into a HAMP trial modification
and whether that homeowner is granted a permanent HAMP
modification. Treasury should continue to monitor these
results on a monthly basis. Treasury should publicly report
all of these results on a quarterly basis.

(CONTINUED)

131

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

Not Implemented

X

X

X

X

X

X

X

TBD/NA

Continued on next page

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

Comments

96
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Treasury should publicly report on all CPP and CDCI
institutions that have not submitted a survey response on
their use of TARP funds for prior years and continue that
reporting in future years.

Treasury should ensure that mortgage servicers who
contract with Treasury have sufficient staffing and other
resources to review the number of homeowner HAMP
applications submitted each month, plus additional
applications to decrease any backlog of homeowners who
applied in prior months without a decision.

The Secretary of the Treasury should require OSM to
maintain documentation of the substance of all OSM
communications with TARP companies.

The Secretary of the Treasury should require all Treasury
employees to maintain documentation of all communications
with TARP companies regarding compensation.

The Secretary of the Treasury should require OSM to
maintain documentation of OSM’s communications
with Treasury officials regarding compensation at TARP
companies.

The Secretary of the Treasury should require OSM to use
long-term restricted stock as part of each TARP company’s
employee’s compensation package to ensure compensation
is tied to both the employee’s and the company’s
performance, and the full repayment of TARP funds.

The Secretary of the Treasury should direct OSM to
conduct an analysis, independent of company proposals
and assertions, for an employee of a TARP exceptional
assistance company to be paid a cash salary exceeding
$500,000.

The Secretary of the Treasury should direct OSM to
document its independent analyses regarding the decision
that a TARP exceptional assistance company employee be
paid a cash salary exceeding $500,000.

The Secretary of the Treasury should direct OSM to
conduct an analysis, independent of company proposals
and assertions, for an employee of a TARP exceptional
assistance company to receive an increase in annual
compensation.

139

140

141

142

143

144

145

146

147

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

Treasury should perform a thorough review of any and all
submissions by TARP recipients on their use of TARP funds
prior to posting the surveys on the Treasury website, and
follow up with the institution for any missing information or
information that is inconsistent or has an obvious error.

(CONTINUED)

138

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

Not Implemented

X

X

X

X

X

X

X

X

X

X

TBD/NA

Comments

Continued on next page

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

97

The Secretary of the Treasury should direct OSM to
conduct an analysis, independent of company proposals
and assertions, for an employee of a TARP exceptional
assistance company to be paid a cash salary that exceeds
the market median cash salary for similar positions in similar
companies.

The Secretary of the Treasury should direct OSM to
document its independent analyses regarding the decision
that a TARP exceptional assistance company employee be
paid a cash salary exceeding market medians.

The Secretary of the Treasury should direct OSM to include
in its written procedures whether it will target, for each Top
25 employee of a TARP exceptional assistance company,
median total compensation for similar positions in similar
companies.

149

150

151

Implemented

Partially
Implemented

Note: * Indicates that Treasury considers the recommendation closed and will take no further action.

The Secretary of the Treasury should direct OSM to
document its independent analyses regarding the decision
that a TARP exceptional assistance company employee will
receive an increase in annual compensation.

(CONTINUED)

148

Recommendation

SIGTARP RECOMMENDATIONS TABLE
In Process

Not Implemented

X

X

X

X

TBD/NA

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

See discussion in Section 2.

Comments

98
SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

SECT IO N 3

HOMEOWNERS CAN GET LOST IN THE SHUFFLE
AND SUFFER HARM WHEN THEIR SERVICER
TRANSFERS THEIR MORTGAGE BUT NOT THE
HAMP APPLICATION OR MODIFICATION

100

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

INTRODUCTION

Treasury has made three extensions of the deadline for homeowners to apply for
help with their mortgage through TARP’s signature foreclosure relief program
known as the Home Affordable Modification Program (“HAMP”).1 These
extensions appear to be based on Treasury’s desire to offer more homeowners
the opportunity to participate in HAMP. Each extension of HAMP presents
Treasury with an opportunity for meaningful change rather than keeping the
status quo barriers to homeowner entry into HAMP. However, extending HAMP’s
timeframe is not enough on its own to meaningfully increase homeowner HAMP
participation levels because there are several barriers to a homeowner getting help
from HAMP. SIGTARP has consistently reported on these barriers in order to
increase awareness and ultimately bring meaningful change. SIGTARP has alerted
Treasury and the public to challenges homeowners face in receiving affordable and
sustainable relief through HAMP (which is Treasury’s stated goal), and provided
recommendations for Treasury to remove those obstacles and better protect
homeowners.2 Treasury’s most recent extension, announced on June 26, 2014,
extending the HAMP application deadline to at least December 2016, presents
another opportunity for Treasury to remove barriers to homeowners getting the
help they need from HAMP.3
One barrier to homeowners receiving affordable and sustainable relief from
HAMP results from mortgage servicers or investors deciding to transfer mortgages
to other servicers. Many homeowners have received notice that their mortgage was
sold, their mortgage company was acquired by another company, or that they will
have a new mortgage servicer to receive their monthly payments. This shuffling
of mortgage servicing is common in the industry. Complications for homeowners
occur when their applications for HAMP, or their HAMP trial or permanent
modifications, get lost in that shuffle.4
Delays, omissions, or miscommunications between current servicers and new
servicers during the transfer can seriously delay, deny, or decrease relief provided
to HAMP-eligible homeowners. For struggling homeowners seeking or receiving
temporary or permanent assistance under HAMP, the harmful effects of their
HAMP documentation getting lost in the shuffle could be particularly drastic: their
applications for HAMP relief may be “lost,” their trial modifications may not be
honored, they may erroneously be deemed delinquent or in default, or they may
even have foreclosure proceedings commenced against them even though they
have been current on their HAMP-modified mortgage payments.
Homeowner calls to SIGTARP’s Hotline about difficulties experienced in
HAMP as a result of mortgages being transferred from one servicer to another have
persisted throughout the life of the program and have escalated in the last year.5
Treasury is aware of these complaints because it is SIGTARP’s standard practice
to share these complaints with Treasury soon after receiving them. Additionally,
in a criminal investigation, SIGTARP found problems with SunTrust Mortgage’s
administration of HAMP related to servicing transfers. The case was resolved in
a public non-prosecution agreement with the Department of Justice in 2014.6 In

101

102

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

2013, the Consumer Financial Protection Bureau (“CFPB”) also issued a bulletin
on heightened concerns about homeowner complaints they received on transfers
that resulted in lost trial modifications.7 In 2014, CFPB issued a second bulletin
based on similar findings made in their examinations of servicers.8
The escalated complaints to SIGTARP, SIGTARP’s findings in its SunTrust
investigation, CFPB’s heightened concerns from consumer complaints, and CFPB’s
examination findings confirm that this is an area where Treasury must do more to
protect homeowners. Treasury’s HAMP rules require that the HAMP applications,
modifications, and related information be transferred with the mortgages.9 Treasury
has never reported on any problems with servicers not following these rules despite
Treasury having conducted in-depth assessments of the top servicers’ compliance
with TARP rules.10 Treasury also requires servicers to report any transfers of these
mortgages to Treasury, but Treasury has never reported any servicer’s failure to
report that information.11 Treasury was unable to provide SIGTARP even basic
information regarding the number of HAMP modifications and HAMP-eligible
loans that have been transferred. In August 2014, SIGTARP requested data on all
HAMP servicing transfers that took place since the beginning of HAMP. Treasury
has not provided this information. Given the findings of SIGTARP and CFPB, in
addition to increased complaints by homeowners, Treasury’s lack of findings raises
the question of whether Treasury is doing enough to protect homeowners from
getting lost in the transfer shuffle.
Treasury is responsible for ensuring that the interests of homeowners are
not adversely affected by the transfer of HAMP-modified mortgages or HAMP
applications by servicers that Treasury pays using TARP dollars. Homeowners
have little ability to protect themselves in this area because the decision of
whether or not to transfer or acquire mortgage servicing assets rests solely with
the participating servicers and investors. Homeowners should be entitled to have
servicers, with whom Treasury contracted to administer HAMP, follow the HAMP
rules set by Treasury. Treasury has the ultimate responsibility to ensure that
homeowners are protected in HAMP, and to ensure that when a servicer or investor
elects to transfer mortgages, it will not negatively affect the ability of homeowners
to participate in HAMP, their credit rating, or whether they are ultimately able to
retain their home.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

HOMEOWNERS CONTINUE TO FACE BARRIERS TO
HAMP ASSISTANCE WHEN THEIR MORTGAGES
ARE TRANSFERRED TO ANOTHER SERVICER

Prior to TARP, a mortgage servicer’s primary role was to receive and process
homeowners’ mortgage payments. Treasury added to that role for those servicers
who voluntarily signed a contract to participate in HAMP. Treasury designed
HAMP to have servicers deliver TARP assistance to struggling homeowners, as
illustrated in Figure 3.1. In exchange, Treasury pays servicers incentive payments.12
As of September 2014, Treasury has paid HAMP mortgage servicers nearly $2.5
billion through TARP housing assistance programs.13
FIGURE 3.1

ROLE OF A MORTGAGE SERVICER IN HAMP AS DESIGNED BY TREASURY

1 2 34 5
Servicer identifies and
solicits HAMP-eligible
homeowners

Servicer works with
homeowner to complete
HAMP application and
turn in supporting
documents

Servicer reviews
homeowner’s HAMP
application, and decides
whether homeowner
will be offered a HAMP
trial modification

Servicer processes
homeowner payments
during trial and decides
whether homeowner
will be offered a
HAMP permanent
modification

If homeowner gets
three payments
behind, servicer
declares a default,
and then pursues
other mitigation or
foreclosure

Source: SIGTARP, analysis of “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,”
3/3/2014, www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/6/2014.

Given the time it takes for each of these steps, a transfer
of the mortgage
to
If homeowner gets
Servicer processes
Servicer reviews
Servicer works with
homeowner payments
three payments
homeowners
HAMPand confusion to a homeowner no
another
servicer
can
result
in
significant
delays
Servicer identifies and
homeowner to complete
during trial and decides
behind, servicer
application and decides
solicits HAMP-eligible
HAMP application and
declares a default,
whether homeowner
whether
homeowner
matter
where the homeowner
is in the
HAMP
process.
Treasury’s rules
on HAMP
homeowners
turn in supporting
will be offered a
and then pursues
will be offered a HAMP
documents
permanent
other mitigation or
have been clear from
the beginning: when
a servicer HAMP
transfers
a
mortgage
or
trial modification
modification
foreclosure
servicing rights to a mortgage that is in or eligible for HAMP, the obligations related
to HAMP for that mortgage are required to be transferred with the mortgage.14
Treasury’s rules specifically state that a servicer may not use a transfer to
circumvent its obligations under its contract with Treasury.15 At the very beginning
of HAMP, Treasury required in its agreement with each servicer that they notify
Servicer
If homeowner
gets
Treasury in writing ofServicer
any works
transfer
of mortgage
servicing
or processes
mortgages of
HAMPServicer reviews
with
homeowner payments
three payments
homeowners HAMP
homeowner
to complete
Servicer homeowners
identifies and
during
trialservicer
and decides confirming
behind, servicer
eligible
and
sign
an
agreement
with
the
new
that
application and decides
HAMP application and
solicits HAMP-eligible
whether homeowner
declares a default,
whether homeowner
turn in supporting
homeowners
will
be offered to
a HAMP.
and 16
then pursues
the new
servicer assumed
all the rights
and
obligations
related
will be
offered
a HAMP
documents
HAMP permanent
other mitigation or
trial modification
modification
foreclosure
Treasury is responsible for enforcing HAMP’s rules. However, despite Treasury’s
requirement that HAMP applications and HAMP modifications travel with any
transferred mortgages or servicing transfers, homeowners have faced barriers, from
the very beginning of the program, in receiving help from HAMP as a result of
mortgage servicing transfers.17 SIGTARP has reported on this problem from the
beginning of the program. In October 2010, SIGTARP reported in its Quarterly
Report to Congress that it had been contacted by homeowners who faced problems
with HAMP when their servicer changed. SIGTARP included the following two
examples in that report, which SIGTARP also shared with Treasury:18

1 2 3 4 5

103

104

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

“I applied to the Making Home Affordable Program with [my previous
servicer] and sent requested documents in by 8/31/09. They …told me
on the phone that they were modifying my loan and interest rate would
be reduced to less than 5%...[my previous servicer] had taken automatic
payments from my checking account since closing in early 2003…
mortgage payments were never delinquent until [my previous servicer]
failed to take that automatic deduction before selling my servicing
agreement. The next I heard was from [my new servicer] welcoming me to
their service and informing me that my payment was already delinquent
and had a penalty due. They denied all knowledge of my previous
agreement or negotiations with [my previous servicer] or of the extensive
paperwork which I had submitted. I had to resubmit all documentation
and have had nothing but delays and ‘runarounds’ since. I have replied
to numerous requests for additional documentation which was so often
‘misplaced’ or never received or to have automatically expired and to need
renewal.”
“Our original mortgage was with [Bank A]…Five months later [Bank
B] acquires [Bank A] tells us we have to start the process over…almost
a year later in December 2009 we finally receive the first modification
paperwork package…we are told by our mortgage adjust specialist…to
show every possible expense, the more debt we show the better. Even if
we show we cannot afford the modified payment that is OK because that
can help us get an even lower payment. We make our five trial payments
no problem, [June 2010] we got to make our sixth trial payment and are
told we are denied a loan modification because it has been determined we
cannot afford the payment. They demand our full mortgage payment.”
Although HAMP trial modifications are required to be transferred with
mortgages or servicing rights, sometimes that does not happen.19 Mortgage
servicers are typically designed so that the mortgage servicing is in one department
and loss mitigation, which would include HAMP, is in another department. Where
there is a lack of communication and coordination, the department holding the
mortgage or servicing rights might transfer that to another servicer but not tell or
coordinate effectively with the department handling HAMP. Given that a HAMP
trial modification pays less than the original mortgage payment, a new servicer
that does not know that the homeowner is in a HAMP trial modification only sees
that the homeowner has not paid in full, which can then cause the new servicer
to claim that the homeowner is delinquent or, worse, in default, which could even
lead the servicer to start foreclosure proceedings.
SIGTARP’s criminal investigation into SunTrust Mortgage, a TARP recipient,
for harming homeowners in its administration of the GSE-version of HAMP,
uncovered problems with SunTrust having transferred hundreds of homeowners’
mortgages to NationStar for servicing in 2010 while the homeowners were in
HAMP trial modifications.20 Although the servicing of mortgages transferred, the

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

HAMP trial modifications did not. The homeowners were required by their new
servicer to reapply for HAMP with hopes of starting a new trial plan. Homeowners
were harmed. They had been paying a lower interest rate under the original HAMP
trial modification. Sometimes the new servicer put them into a new HAMP trial
modification and sometimes into a non-HAMP trial modification proprietary to the
servicer. The new servicer charged them higher unmodified interest rates, which
were added to their unpaid principal balances.21 SIGTARP’s criminal investigation
was resolved by the Department of Justice executing a non-prosecution agreement
in July 2014 that required SunTrust Bank to pay $320 million, including relief
for victimized homeowners and payments to homeowners for the amount of
excess interest capitalized. SunTrust is required under the agreement with DOJ to
designate an employee responsible for identifying all transfers to another servicer
and ensuring that the new servicer receives information on loss mitigation status,
including HAMP, at the time of the transfer, and for confirming that all documents
associated with loss mitigation status are provided to the new servicer. SunTrust
is also required to retain copies of the documents transferred to the new servicer
and verify that communications with homeowners about transfers contain full and
accurate information.22
In late 2011, two and half years after the program began, Treasury issued more
detailed guidance to HAMP servicers, effective March 1, 2012.23 Treasury’s 2011
guidance requires both the current servicer and the new servicer to “cooperate with
each other to cause as little disruption as possible to the borrower.” Among other
things, Treasury’s new guidance made clear that servicers transferring mortgage
servicing are responsible for ensuring that all information, documentation, and data
regarding a transferred HAMP-eligible mortgage is provided to the new servicer in
a timely manner, and that the data is accurate and complete. Treasury’s guidance
put a deadline on servicers’ notification to Treasury of at least 30 days in advance
of the transfer,24 and of at least 15 days prior to the transfer for delivery of the
agreement between the old and new servicer, with the list of HAMP-eligible loans
to be delivered attached. Treasury’s 2011 guidance required servicers to “ensure
that all data on the transferred loans reflected in the HAMP Reporting Tool,
including the Official Monthly Report (OMR), is accurate, complete, and up-todate before the loans are transferred.” It further required that the new servicers
validate the “receipt and completeness” of the loan level HAMP data with Treasury
within 60 days of the effective date of transfer.

105

106

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

HOMEOWNER COMPLAINTS ABOUT HAMP
PROBLEMS CAUSED BY SERVICING TRANSFERS
HAVE ESCALATED

In recent years, mortgage servicers have transferred large numbers of mortgages
and mortgage servicing, including HAMP-modifications and HAMP-eligible
loans, to other servicers. Many of these transfers have moved servicing assets from
regulated banks to non-bank servicers such as Ocwen, NationStar, and Green Tree.
From 2013 to 2014, nearly 100 homeowners contacted SIGTARP asking for
SIGTARP’s help in getting HAMP relief and complaining of problems relating
to the transfer of their mortgage to another servicer, 84 of those calls coming in
2014. Because these homeowners are seeking help with their specific mortgage,
and in order to inform Treasury about homeowner barriers in HAMP, SIGTARP’s
standard practice is to share a copy of homeowner complaints with Treasury soon
after receiving them. The serious problems raised by homeowners include lost and
delayed HAMP applications, trial and permanent modifications not being honored,
and the miscalculation or misapplication of monthly payments. The consequences
of such problems and delays for struggling HAMP-eligible homeowners, many of
whom could not afford their mortgage payments, can be severe. During the time
homeowners’ HAMP determinations are delayed due to servicing transfers, their
financial hardships continue. Many will continue to accrue late fees and unpaid
interest that can hurt their chances of receiving a HAMP modification and that
generally result in less favorable terms for those fortunate enough to receive a
modification. For those already in HAMP, servicing transfers that are not honored,
or payments that are misapplied due to missing paperwork or miscoding of HAMP
data during the transfer, could result in their mortgages reverting to the original
terms that they previously could not afford. The large number of homeowner
complaints identified real harm that Treasury must rapidly and aggressively respond
to before the problem escalates even further.

Lost or Delayed Applications for HAMP Relief
One way homeowners can suffer harm when their mortgages are transferred to a
new servicer is that their applications for HAMP relief may be lost or delayed in
the process. For example, on December 31, 2013, one homeowner reported to
SIGTARP that her completed HAMP application was never transferred from her
original lender to the new servicer. After being advised to wait several months for
the documentation to be received by the new servicer, the homeowner reported
she was required to submit a new application. She also reported that the new
servicer made certain calculation errors in processing her HAMP application. The
homeowner further stated that action on her HAMP application was delayed for
at least six months after the transfer. For homeowners like this, a delay in receiving
assistance has real consequences including not just the delay in receiving a
mortgage modification, but also the likelihood they may fall further behind in their
mortgage payments, further complicating their ability to enter HAMP. In some

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

cases, the missed payments may be so large that, when added to the outstanding
balance, it becomes nearly impossible for the homeowner to reach the necessary
Debt to Income (“DTI”) ratio required for HAMP.25

Failure to Process or Honor HAMP Modifications
Another risk to HAMP homeowners is that the new servicer is never informed of
or otherwise fails to honor the homeowners’ HAMP trial period modifications,
making the homeowner immediately delinquent on the terms of the original
mortgage even when the homeowner made all payments required under the HAMP
modification. Struggling homeowners should not face the additional financial and
other burdens potentially required to assert their rights under HAMP. In one case,
for example, a homeowner reported to SIGTARP that the new servicer failed to
give him a permanent HAMP modification in accordance with HAMP guidelines,
even though he had successfully completed his HAMP trial period plan with his
previous servicer.
Homeowners who have already qualified for and are complying with the terms
of permanent HAMP modifications can also suffer harm if the new servicer does
not receive or otherwise fails to honor their modification. On February 27, 2013,
one homeowner reported to SIGTARP that his new servicer failed to honor his
permanent HAMP modification, advising him that even though the homeowner
possessed executed and notarized copies of the required documentation, it never
received finalized documents from his previous servicer and would not accept the
homeowner’s modified payments. The new servicer asserted he was therefore in
arrears (at that time by 15 months) under the terms of the original mortgage.
In a similar case involving a Second Lien Program modification, on May 19,
2014, a homeowner who had received both a HAMP modification on his primary
mortgage and a HAMP-2MP modification on his second mortgage reported to
SIGTARP that the firm that acquired his second mortgage claimed he was not
eligible for that program, even though he had made all payments on time.

Transferee Servicers May Misapply or Miscalculate Payments
After acquiring a mortgage, a transferee servicer also may recalculate income or
payments in ways that disadvantage HAMP homeowners. For example, on February
7, 2014, a homeowner reported to SIGTARP that a new servicer changed the terms
of his HAMP modification by accelerating the amortization of his escrow arrearage
payments over only 36 months, rather than the 60-month period originally
provided. The homeowner stated that this action increased his monthly payments
by almost $200 from what was agreed upon under the HAMP modification with
his prior servicer.
These and other reports raise continuing concerns that servicers are not
following Treasury’s rules in HAMP and homeowners are suffering as a result.
Despite HAMP existing for five years, these homeowner complaints and others
suggest that many HAMP servicers do not have the capacity, procedures, and
controls to ensure that the transfers they engage in are conducted appropriately

107

108

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

and without harm to the struggling homeowners. Homeowners have no say in who
services their mortgage. Homeowners are entitled to the protections laid out in
Treasury’s HAMP rules that the decision by a servicer to transfer their mortgage
will not negatively affect their ability to participate in HAMP, their credit ratings, or
whether they are ultimately able to retain their homes.

CFPB Heightened Concerns
In February 2013, the CFPB issued a public bulletin on heightened concerns of
risks to homeowners in connection with transfers of servicing. In the bulletin,
CFPB discussed consumer complaints that new servicers sometimes fail to honor
the terms of trial loan modifications provided by prior servicers because relevant
documents are not transferred or the new servicer does not take adequate steps to
identify the mortgages that are in trial modifications.26
On August 19, 2014, CFPB issued a new bulletin saying that its concerns
remained heightened due to the continuing high volume of servicing transfers.
During its examinations, CFPB examiners determined that servicers had failed to
properly identify loans that were in trial or permanent modifications with the prior
servicer at the time of transfer. CFPB also found servicers that had failed to honor
trial or permanent modifications unless they could independently confirm that
the prior servicer properly offered a modification or that the offered modification
met investor criteria. CFPB also reported findings in its examinations that the
transferee servicers did not obtain all of the information they needed from the
transferor servicer.27

TREASURY OVERSIGHT OF HAMP MORTGAGE
SERVICING TRANSFERS

Treasury conducts oversight of HAMP mortgage servicing transfers in two ways.
First, Treasury conducts in depth “kick-the-tires” assessments of the top HAMP
servicers’ compliance with HAMP rules and HAMP performance, which it publicly
reports on quarterly.28 Second, Treasury requires that HAMP servicers report all
transfers to Treasury, recently changing to an automated system in 2013.29

Treasury Has Not Reported Problems Related to Servicing
Transfers in its In Depth Assessment of Top HAMP Servicers
Treasury has the opportunity to go into all of the major HAMP servicers and kick
the tires to make sure the servicer is complying with HAMP rules and to assess
the servicer’s performance in HAMP.30 According to the MHA Program guidelines,
Treasury’s compliance reviews may cover, but are not limited to, servicers’ HAMP
borrower eligibility determinations, underwriting, data accuracy and reporting,
complaint management, internal controls, quality assurance, and document
retention.31 Treasury uses the outcome of the reviews to “require participating
servicers to take specific actions to improve their servicing processes, as needed.”32

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Treasury also has had the benefit of the homeowner complaints received by
SIGTARP that identify each servicer involved and the specific homeowner
information that Treasury can use to target these assessments.
SIGTARP has found problems with HAMP servicers transferring mortgages
to other servicers but not HAMP applications or HAMP trials.33 CFPB has
found problems with servicers transferring mortgages to other servicers but
not transferring trial modifications.34 It is unclear whether Treasury has found
problems with servicing transfers.
Treasury has never reported on any problems with servicing transfers or any
servicer’s failure to follow Treasury’s rules in this area.35 Early in HAMP, SIGTARP
recommended that Treasury set performance goals and metrics for servicers in
HAMP and publicly report on the top servicers’ performance.36 In June 2011,
Treasury began publishing quarterly results of its assessments for the largest
HAMP servicers, to “drive servicers to improve their performance” against a series
of compliance benchmarks.37 The most recent Quarterly Performance Report,
covering the second quarter of 2014, assessed the following metrics:38
• “Second Look” Assessments: The percentage of loans where Treasury (a)
did not concur, or (b) was unable to conclude, that the homeowner was
properly considered for, denied or deemed ineligible for a permanent HAMP
modification
• Income Calculation Errors: How often MHA-C disagrees with a servicer’s
calculation of a homeowner’s Monthly Gross Income (allowing for up to a 5%
differential from MHA-C’s calculations)
• Incentive Payment Data Errors: The accuracy of data reported by the servicer
that is used to calculate the program incentives due to servicers, investors and
homeowners
• Single Point of Contact: The percentage of loans where Treasury did not
concur that the servicer had assigned a Single Point of Contact to a homeowner
in a timely fashion and otherwise in accordance with MHA guidelines
• Non-Approval Notice and Disqualified Modification Noncompliance: The
percentage of loans where MHA-C did not concur with (a) the completion or
accuracy of non-approval notices sent to homeowners, and (b) the processing of
defaulted HAMP modifications, in accordance with MHA guidelines.
Treasury states that its assessments also evaluate “key indicators of how timely
and effectively servicers assist eligible homeowners under MHA guidelines and
report program data.” These indicators include the percentage of active trial
modifications aged six or more months, the average number of days to resolve
“escalated cases,” the percentage of permanent modifications the servicer reported
within the same month it was effective, and the percentage of missing status
reports on permanent modifications. Unlike the compliance benchmarks, however,
Treasury does not assign an overall rating for these performance indicators.39
Significantly, Treasury does not include benchmarks of servicer performance
directly relating to servicing transfers. Treasury has never published an assessment

109

110

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

of the impact of transfers (including to non-bank servicers) on the ultimate
outcomes obtained by the struggling homeowners TARP is intended to assist.
Over the last three years Ocwen, NationStar, and Green Tree have experienced
tremendous growth largely due to servicing transfers.40 Between June 30, 2011 and
June 30, 2014 the number of mortgages serviced by Ocwen has increased almost
five times over, the number of mortgages serviced by Nationstar has increased
almost four times over, and the number of mortgages serviced by Green Tree has
more than doubled.41 As a result, these non-bank servicers are among the largest
HAMP servicers.42 Treasury must ensure the fair treatment of homeowners
receiving or seeking HAMP assistance when their servicers or investors choose
to transfer the servicing of their mortgages. Treasury should include this as part
of their public servicer assessment. Table 3.1 shows Treasury’s published servicer
assessment ratings over the last three years. Over that period, the vast majority
of ratings have been “Moderate Improvement Needed.” During this same period,
there have been numerous legal and regulatory findings and settlements over the
conduct of mortgage servicers, including servicers participating in HAMP, and their
treatment of homeowners.
TABLE 3.1
SERVICER

Q3
2011

Q4
2011

Q1
2012

Q2
2012

Q3
2012

Q4
2012

Q1
2013

Q2
2013

Q3
2013

Q4
2013

Q1
2014

Q2
2014

Bank of America, N.A.

●

●

●

●

●

●

●

●

●

●

●

●

JPMorgan Chase Bank, N.A.

●

●

●

●

●

●

●

●

●

●

●

●

Ocwen Loan Servicing, LLC

●

●

●

●

●

●

●

●

●

●

●

●

Nationstar Mortgage LLC

●

●

●

●

●

●

●

●

●

●

●

●

Select Portfolio Servicing, Inc.

●

●

●

●

●

●

●

●

●

●

●

●

Wells Fargo Bank, N.A.

●

●

●

●

●

●

●

●

●

●

●

●

CitiMortgage, Inc.

●

●

●

●

●

●

●

●

●

●

●

●

Notes:
Table only includes the servicers currently included in the servicer assessments.
Legend:
● Servicer rated as “Minor Improvement Needed” during the quarter.
● Servicer rated as “Moderate Improvement Needed” during the quarter.
● Servicer rated as “Substantial Improvement Needed” during the quarter.
● Servicer not included in the quarter’s assessment.
Source: SIGTARP, analysis of “Making Home Affordable Program Performance Reports,” (including Quarterly Servicer Assessments),
www.treasury.gov/initiatives/financial-stability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed
10/6/2014.

Treasury has never permanently withheld TARP payments from servicers. A
few times Treasury has temporarily withheld payments from servicers, which it
just did for CitiMortgage, Inc., only to give the servicer all of the money later.43
The only time Treasury has addressed servicing transfers in its quarterly servicer
assessments was to use servicing transfers as a reason not to withhold incentives.
For example, Treasury’s MHA Servicer Assessment for the first quarter of 2011
stated “Treasury will not withhold servicer incentives owed to Ocwen Loan
Servicing, LLC for this quarter. Because Ocwen’s compliance results for the first
quarter of 2011 were substantially and negatively affected by its acquisition of a

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

large servicing portfolio during the compliance testing period, Treasury determined
that withholding servicer incentives was not warranted this quarter. Treasury
will withhold servicer incentives from Ocwen if future compliance results do not
indicate improvements.”44 Treasury never withheld incentive payments to Ocwen.45
The magnitude of the transfer to Ocwen should have put Treasury on notice that
it needed to ensure all HAMP applications and HAMP modifications transferred
with the mortgage.
Given the heightened concerns articulated by CFPB, and the increasing
number of homeowner complaints that SIGTARP received and provided to
Treasury, the transfer of a HAMP mortgage or HAMP-eligible mortgage is an area
where Treasury needs to make oversight a top priority in order to eliminate another
barrier to HAMP. Treasury’s immediate action is necessary to ensure that HAMP
servicers comply with HAMP rules and to protect homeowners.

Treasury Requires Servicer Reporting on Transfers of HAMP
Mortgages but Treasury’s Oversight of HAMP Servicing
Transfers is Insufficient to Protect HAMP Homeowners
In June 2013, after CFPB’s public bulletin of its heightened concerns and after
receiving from SIGTARP homeowners’ complaints that were made to SIGTARP,
Treasury announced that it would update its HAMP Reporting System to automate
the intake of data on transfers of HAMP-eligible loans to new servicers.46 Treasury’s
announcement provided that, effective August 2013, servicers would input loan
level data for the transfer of every HAMP-eligible mortgage into the HAMP
Reporting Tool, and that there would be an alert set up for each mortgage. Once
the servicer submitted the mortgage as part of a servicing transfer, the HAMP
Reporting Tool would give the mortgage a Servicing Transfer Deal Identifier that
the servicer must provide to the new servicer. Treasury’s program administrator
would then review the transfer and generate a concurrence report. Both servicers
would then have to concur in the new electronic system that the loan list is
accurate or submit a non-concurrence, which would then have to be reviewed.
After the transfer, Treasury’s system would generate a Reconciliation Report that is
sent to both servicers that contains the details of the transfers so that servicers can
reconcile their transfers. This new system became effective with the August 2013
reporting cycle.47
Presumably, Treasury automated the reporting of HAMP modified (or eligible)
mortgages to protect homeowners and to give Treasury a better tool for oversight
over transfers. Treasury’s new automated system could be used to generate data
that could be an important tool for Treasury to use in assessing whether HAMP
servicers are following the rules and in determining the impact servicing transfers
have on homeowners seeking or receiving HAMP assistance.
Treasury must take a strong stand in this area. Treasury has required reporting
on transfers from all HAMP servicers, and Treasury conducts in-depth assessments
of the top servicers.48 CFPB’s work in this area has been public.49 SIGTARP gave

111

112

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Treasury copies of homeowner complaints related to servicing transfers. Therefore,
Treasury is on notice that this is an area of high risk.
In order to evaluate the impact of servicing transfers on homeowners
participating in HAMP or seeking HAMP, SIGTARP requested that Treasury
provide a list of all HAMP modifications and HAMP-eligible mortgages that
servicers have transferred since the program began. Despite Treasury’s contract
with the servicers and a HAMP requirement that servicers transferring loans or
servicing provide written notice of all transfers on a mortgage level basis, Treasury
has not produced this information.
Reporting and assessment by Treasury of servicing transfers is essential to
effective oversight. Without this determination, Treasury cannot confidently assure
the public that HAMP homeowners have not been harmed when their mortgages
have been transferred to other servicers, particularly in light of the concerns raised
by CFPB and the HAMP-specific anecdotes of homeowner harm that SIGTARP
provided to Treasury.
Given the scale of the reported problems related to transfers to new servicers,
and the potentially serious harm to struggling homeowners who need relief from
HAMP, Treasury must be aggressive and swift in sending the message to servicers
that Treasury will not tolerate harm to homeowners in HAMP from servicing
transfers. HAMP is five years old, and servicers have had ample time to understand
the rules and to follow them. Treasury should no longer tolerate a failure to follow
HAMP rules. Treasury should report on violations publicly, and permanently
withhold incentive payments from servicers that do not comply with HAMP rules
on transfers.

SECT IO N 4

TARP OVERVIEW

114

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

This section summarizes how the U.S. Department of the Treasury (“Treasury”) has
managed the Troubled Asset Relief Program (“TARP”). This section also reviews
TARP’s overall finances and provides updates on established TARP component
programs.

TARP FUNDS UPDATE

Initial authorization for TARP funding came through the Emergency Economic
Stabilization Act of 2008 (“EESA”), which was signed into law on October 3,
2008.50 EESA appropriated $700 billion to “restore liquidity and stability to the
financial system of the United States.”51 On December 9, 2009, the Secretary
of the Treasury (“Treasury Secretary”) exercised the powers granted him under
Section 120(b) of EESA and extended TARP through October 3, 2010.52 In
accordance with Section 106(e) of EESA, Treasury may expend TARP funds after
October 3, 2010, as long as it does so pursuant to obligations entered into before
that date.53
The Dodd-Frank Wall Street Reform and Consumer Protection Act (“DoddFrank Act”), which became law (Public Law 111-203) on July 21, 2010, amended
the timing and amount of TARP funding.54 The upper limit of the Treasury
Secretary’s authority to purchase and guarantee assets under TARP was reduced to
$475 billion from the original $700 billion.55
Treasury’s investment authority under TARP expired on October 3, 2010. This
means that Treasury could not make new obligations after that date. However,
dollars that have already been obligated to existing programs may still be expended.
As of October 3, 2010, Treasury had obligated $474.8 billion to 13 announced
programs. Subsequent to the expiration of Treasury’s investment authority, Treasury
has deobligated funds, reducing obligations to $455.7 billion as of September
30, 2014.56 Of that amount, $425.5 billion had been spent.57 Taxpayers are owed
$37.3 billion as of September 30, 2014. According to Treasury, as of September 30,
2014, it had $34.4 billion in write-offs and realized losses, leaving $2.9 billion in
TARP funds outstanding.58 Treasury’s write-offs and realized losses are money that
taxpayers will never get back. These amounts do not include $13.8 billion in TARP
funds spent on housing support programs, which are designed as a Government
subsidy, with no repayments to taxpayers expected.59 In the quarter ended
September 30, 2014, funds that were obligated but unspent remained available
to be spent on only TARP’s housing support programs. According to Treasury, in
the quarter ended September 30, 2014, $1 billion of TARP funds were spent on
housing programs, leaving $24.7 billion obligated and available to be spent.60
Table 4.1 provides a breakdown of program obligations, changes in obligations,
expenditures, principal repaid, principal refinanced, amounts still owed to taxpayers
under TARP, and obligations available to be spent as of September 30, 2014. Table
4.1 lists 10 TARP sub-programs, instead of all 13, because it excludes the Capital

Obligations: Definite commitments
that create a legal liability for the
Government to pay funds.
Deobligations: An agency’s cancellation
or downward adjustment of previously
incurred obligations.

115

116

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Assistance Program (“CAP”), which was never funded, and summarizes three
programs under “Automotive Industry Support Programs.” Table 4.2 details writeoffs and realized losses in TARP as of September 30, 2014.
TABLE 4.1

OBLIGATIONS, EXPENDITURES, PRINCIPAL REPAID, PRINCIPAL REFINANCED, AMOUNTS STILL OWED TO TAXPAYERS, AND
OBLIGATIONS AVAILABLE TO BE SPENT ($ BILLIONS)

Program

Obligation
After DoddFrank

(As of 10/3/2010)

Current
Obligation

(As of 9/30/2014)

Expenditure

(As of 9/30/2014)

Principal
Repaid

(As of 9/30/2014)

Principal
Refinanced
into SBLF

(As of 9/30/2014)

Still Owed to
Taxpayers
under TARP
a

(As of 9/30/2014)

Available
to Be Spent

(As of 9/30/2014)

Housing Support
Programsb

$45.6

$38.5c

$13.8

NA

$0.0

Capital Purchase
Program

204.9

204.9

204.9

$197.2d

2.2

$5.5

0.0

0.6

0.6

0.2

0.1

0.0

0.5

0.0

Systemically Significant
Failing Institutions

69.8

67.8f

67.8

54.4

0.0

13.5

0.0

Targeted Investment
Program

40.0

40.0

40.0

40.0

0.0

0.0

0.0

5.0

5.0

0.0

0.0

0.0

0.0

0.0

81.8g

79.7h

79.7

61.9i

0.0

17.8

0.0

4.3

0.1j

0.1

0.1

0.0

0.0

0.0

Public-Private
Investment Program

22.4

18.8

18.6

18.6k

0.0

0.0

0.0l

Unlocking Credit for
Small Businesses

0.4

0.4

0.4

0.4

0.0

0.0

0.0

$474.8

$455.7

$372.2

$2.2

$37.3

$24.7

Community
Development Capital
Initiativee

Asset Guarantee
Program
Automotive Industry
Support Programs
Term Asset-Backed
Securities Loan Facility

Total

$425.5m

NA

$24.7

Notes: Numbers may not total due to rounding. NA=Not applicable.
a
Amount taxpayers still owed includes amounts disbursed and still outstanding, plus $34.4 billion in write-offs and realized losses. It does not include $13.8 billion in TARP dollars spent on housing programs.
These programs are designed as Government subsidies, with no repayments to taxpayers expected.
b
Housing support programs were designed as a Government subsidy, with no repayment to taxpayers expected.
c
On March 29, 2013, Treasury deobligated $7.1 billion of the $8.1 billion that was originally allocated to the FHA Short Refinance Program.
d
Includes $363.3 million in non-cash conversions from CPP to CDCI, which is not included in the total of $372.2 billion in TARP principal repaid because it is still owed to TARP from CDCI. Does not include $2.2
billion refinanced from CPP into the Small Business Lending Fund.
e
CDCI obligation amount of $570.1 million. There are no remaining dollars to be spent on CDCI. Of the total obligation, $363.3 million was related to CPP conversions for which no additional CDCI cash was
expended; this is not counted as an expenditure, but it is counted as money still owed to taxpayers. Another $100.7 million was expended for new CDCI expenditures for previous CPP participants. Of the total
obligation, only $106 million went to non-CPP institutions.
f
Treasury deobligated $2 billion of an equity facility for AIG that was never drawn down.
g
Includes $80.7 billion for Automotive Industry Financing Program, $0.6 billion for Auto Warranty Commitment Program, and $0.4 billion for Auto Supplier Support Program.
h
Treasury deobligated $2.1 billion of a Chrysler credit facility that was never drawn down.
i
$61.9 billion includes both payments toward principal and proceeds recovered from common stock sales.
j
On June 28, 2012, Treasury deobligated $2.9 billion in TALF funding, reducing the total obligation to $1.4 billion. On January 23, 2013, Treasury deobligated $1.3 billion, reducing the total obligation to $0.1
billion.
k
On April 10, 2012, Treasury changed its reporting methodology to reclassify as repayments of capital to the Government $958 million in receipts previously categorized as PPIP equity distributions. That $958
million is included in this repayment total.
l
PPIP funds are no longer available to be spent because the three-year investment period ended during the quarter ended December 31, 2012. Total obligation of $22.4 billion and expenditure of $18.6 billion for
PPIP includes $356.3 million of the initial obligation to The TCW Group, Inc. (“TCW”) that was funded. TCW subsequently repaid the funds that were invested in its PPIF. Current obligation of $18.8 billion results
because Oaktree, Marathon, RJL Western, BlackRock, AG GECC, Invesco and AllianceBernstein did not draw down all the committed equity and debt. All undrawn debt and equity, with the exception of AG GECC’s
equity investment, has been deobligated as of September 30, 2014.
m
The $5 billion reduction in exposure under AGP is not included in the expenditure total because this amount was not an actual cash outlay.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, Daily TARP Update, 10/1/2014; Treasury, response to SIGTARP data call, 10/6/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

117

TABLE 4.2

TREASURY’S STATEMENT OF REALIZED LOSSES AND WRITE-OFFS IN TARP, AS OF 9/30/2014
TARP Program

Institution

Total TARP
Investment

Realized Lossa,
Write-Offsb,c

($ MILLIONS)

Description

Autos
Chrysler

$1,328a

Sold 98,461 shares and equity stake in the
UAW Retiree trust for $560,000,000

Chrysler

1,600b

Accepted $1.9 billion as full repayment for
the debt of $3.5 billion

Chrysler Total

$10,465

$2,928

GM

3,203a

Treasury sold to GM at a loss

GM

7,130a

Treasury sold to public at a loss

GM

826a

Loss due to bankruptcy plan of
restructuring

GM Total

$49,500

$11,159

Ally Financial

Ally Financial
Total
Total Investment

1,902a

$17,174
$79,693

c

Sold 219,079 common shares in a
private offering, 95,000,000 common
shares, 7,245,670 common shares,
and 8,890,000 common shares in three
separate public offerings, all for a loss.

$1,902
Total Realized Loss, Write-Offs

$15,989

CDCI
Premier Bancorp,
Inc.
Total Investment

$7a
$570

Total Realized Loss, Write-Offs

Liquidation of failed bank

$7

CPP
188 CPP Banks

$1,666a,b

27 CPP Banks in
Bankruptcy

Anchor Bancorp
Wisconsin, Inc.
CIT Group Inc.
Total Investment

Bankruptcy in process,
loss written off by Treasury,

4b

Bankruptcy process completed,
loss written off by Treasury

104a

Bankruptcy process completed,
loss realized by Treasury

2,330b

Bankruptcy process completed,
loss written off by Treasury

$797

Pacific Coast
National Bancorp

$204,895

Total Realized Loss, Write-Offs

Sales and exchanges

b

$4,901

SSFI
AIGd

$13,485a

Total Investment
Total Realized Loss
Total TARP Investment

$28,583
$350,439

$67,835

Total Realized Loss, Write-Offs

Total Write-Offs

Sale of TARP common stock at a loss

$13,485

$5,799
Total Realized Loss, Write-Offs $34,382

Notes: Numbers may not total due to rounding.
a
Includes investments reported by Treasury as realized losses. Treasury changed its reporting methodology in calculating realized losses, effective June 30, 2012. Disposition expenses are no longer
included in calculating realized losses.
b
Includes investments reported by Treasury as write-offs. According to Treasury, in the time since some transactions were classified as write-offs, Treasury has changed its practices and now classifies sales
of preferred stock at a loss as realized losses.
c
Includes $1.5 billion investment in Chrysler Financial, $413 million ASSP investment, and $641 million AWCP investment.
d
Treasury has sold a total of 1.66 billion AIG common shares at a weighted average price of $31.18 per share, consisting of 1,092,169,866 TARP shares and 562,868,096 non-TARP shares based upon the
Treasury’s pro-rata holding of those shares. The non-TARP shares are those received from the trust created by the Federal Reserve Bank of New York for the benefit of the Treasury. Receipts for non-TARP
common stock totaled $17.55 billion and are not included in TARP collections. The realized loss reflects the price at which Treasury sold common shares in AIG and TARP’s cost basis of $43.53 per common
share.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, Section 105(a) Report, 10/10/2014; Treasury Press Release, “Treasury Announces Agreement to Exit Remaining Stake in Chrysler Group
LLC,” 6/2/2011, www.treasury.gov/press-center/press-releases/Pages/tg1199.aspx, accessed 10/1/2014; Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Daily TARP Update, 6/3/2013,
6/13/2013, 7/1/2014, and 10/1/2014.

118

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TARP PROGRAMS UPDATE

Common Stock: Equity ownership
entitling an individual to share in
corporate earnings and voting rights.
Preferred Stock: Equity ownership that
usually pays a fixed dividend before
distributions for common stock owners
but only after payments due to debt
holders. It typically confers no voting
rights. Preferred stock also has priority
over common stock in the distribution
of assets when a bankrupt company is
liquidated.
Senior Subordinated Debentures:
Debt instrument ranking below senior
debt but above equity with regard to
investors’ claims on company assets
or earnings.

Some TARP programs are scheduled to last as late as 2022. Other TARP programs
have no scheduled ending date; TARP money will remain invested until recipients
pay Treasury back or until Treasury sells its investments in the companies. Table
4.3 provides details of exit dates and remaining Treasury investments.
As of September 30, 2014, 145 institutions remain in TARP: 43 banks with
remaining CPP principal investments; 34 CPP banks for which Treasury now holds
only warrants to purchase stock; 68 banks and credit unions in CDCI; and Ally
Financial.61 Treasury does not consider the 34 CPP institutions in which it holds
only warrants to be in TARP, however Treasury applies all proceeds from the sale of
warrants in these banks to recovery amounts in TARP’s CPP program.62 Treasury
(and therefore the taxpayer) remains a shareholder in companies that have not
repaid the Government. Treasury’s equity ownership is largely in two forms —
common and preferred stock — although it also has received debt in the form of
senior subordinated debentures.
According to Treasury, as of September 30, 2014, 224 banks and credit unions
have exited CPP or CDCI with less than a full repayment, including institutions
whose shares have been sold for less than par value (30), or at a loss at auction
(164), and institutions that are in various stages of bankruptcy or receivership
(30).63 Eighteen banks have been sold at a profit at auction.64 Four CPP banks
merged with other CPP banks.65
Taxpayers also are entitled to dividend payments, interest, and warrants for
taking on the risk of TARP investments. According to Treasury, as of September 30,
2014, Treasury had collected $48.1 billion in interest, dividends, and other income,
including $9.5 billion in proceeds from the sale of warrants and stock received as a
result of exercised warrants.66

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.3

STATUS OF CONTINUING TARP PROGRAMS
Program

Investment status as of 9/30/2014

Home Affordable Modification Program

2022 to pay incentives on modifications

Hardest Hit Fund

2017 for states to use TARP funds

FHA Short Refinance Program

2020 for TARP-funded letter of credit

Capital Purchase Program

Remaining principal investments in 43 banks;
warrants for stock in an additional 34 banks

Community Development Capital Initiative

Remaining principal investments in 68 banks/
credit unions

Automotive Industry Financing Program

Remaining investment: 13.8% stake in Ally

Term Asset-Backed Securities Loan Facility

2014 maturity of last loan

Notes: Treasury’s Ally Financial stake as of 9/12/2014.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, Daily TARP Update, 10/1/2014; Treasury, response to SIGTARP data
call, 10/6/2014; and FRBNY, response to SIGTARP data call, 10/9/2014.

COST ESTIMATES

Several Government agencies are responsible under EESA for generating cost
estimates for TARP, including the Congressional Budget Office (“CBO”), the
Office of Management and Budget (“OMB”), and Treasury, whose estimated costs
are audited each year by the Government Accountability Office (“GAO”). Cost
estimates have decreased from CBO’s March 2009 cost estimate of a $356 billion
loss and OMB’s August 2009 cost estimate of a $341 billion loss.67
On March 4, 2014, OMB issued the Administration’s fiscal year 2015 budget,
which included a TARP lifetime cost estimate of $39 billion, based largely on
figures from November 30, 2013.68 This was a decrease from its estimate of $47.5
billion based on December 31, 2012, data.69 According to OMB, this decrease
came largely from a smaller projected loss on the auto program, as well as from a
technical adjustment to interest income that affects the overall Federal deficit, but
has no direct effect on TARP program costs.70 The estimate also assumes principal
repayments and revenue from dividends, warrants, interest, and fees for PPIP of
$2.4 billion and for CPP of $8.3 billion.
On April 17, 2014, CBO issued a TARP cost estimate based on its evaluation
of data as of March 12, 2014. CBO estimated the ultimate cost of TARP would be
$27 billion, up $6 billion from its estimate of $21 billion in May 2013.71 According
to CBO, the increase is due primarily to an increase in projected mortgage program
spending, offset by a decrease in the estimated costs associated with the automotive
program. CBO estimates that TARP’s largest loss will come from the mortgage
programs. CBO estimated that only $26 billion of obligated funds for housing will
be spent.

119

120

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

On December 11, 2013, Treasury issued its September 30, 2013, fiscal year
audited agency financial statements for TARP, which contained a cost estimate of
$40.3 billion.72 According to Treasury, the largest costs from TARP are expected
to come from housing programs and from assistance to AIG and the automotive
industry.73 This estimate assumes that all of the $38.5 billion in funds obligated for
housing support programs will be spent.
The most recent TARP program cost estimates from each agency are listed in
Table 4.4.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.4

COST (GAIN) OF TARP PROGRAMS

($ BILLIONS)

CBO Estimate

OMB Estimate

Treasury Estimate,
TARP Audited Agency
Financial Statement

4/17/2014
3/12/2014

3/4/2014
11/30/2013

12/11/2013
9/30/2013

Housing Support Programs

$26

$37.5

$37.7a

Capital Purchase Program

(17)

(8.3)

(16.1)

Systemically Significant
Failing Institutions

15

17.4

15.2

Targeted Investment Program
and Asset Guarantee Program

(8)

(7.5)

(8.0)

Automotive Industry Support
Programsb

14

20

14.7

Term Asset-Backed Securities
Loan Facility

(1)

(0.5)

(0.6)

Public-Private Investment
Program

(3)

(2.4)

(2.7)

*

*

*

$56.3

$40.3e

Program Name
Report issued:
Data as of:

Otherc
Total
Interest on Reestimatesf
Adjusted Total

$27

d

(17.2)
$39.0e

Notes: Numbers may not total due to rounding.
a
According to Treasury, “The estimated lifetime cost for Treasury Housing Programs under TARP represent the total commitment
except for the FHA Refinance Program, which is accounted for under credit reform. The estimated lifetime cost of the FHA Refinance
Program represents the total estimated subsidy cost associated with total obligated amount.”
b
Includes AIFP, ASSP, and AWCP.
c
Consists of CDCI and UCSB, both of which are estimated between a cost of $500 million and a gain of $500 million.
d
The estimate is before administrative costs and interest effects.
e
The estimate includes interest on reestimates but excludes administrative costs.
f
Cumulative interest on reestimates is an adjustment for interest effects on changes in TARP subsidy costs from original subsidy
estimates; such amounts are a component of the deficit impacts of TARP programs but are not a direct programmatic cost.
Sources: OMB Estimate – OMB, “Analytical Perspectives, Budget of the United States Government, Fiscal Year 2015,” 3/4/2014,
www.whitehouse.gov/sites/default/files/omb/budget/fy2015/assets/spec.pdf, accessed 10/1/2014; CBO Estimate - CBO, “Report
on the Troubled Asset Relief Program—April 2014,” www.cbo.gov/sites/default/files/cbofiles/attachments/45260-TARP.pdf,
accessed 10/1/2014; Treasury Estimate — Treasury, “Office of Financial Stability–Troubled Asset Relief Program Agency Financial
Report Fiscal Year 2013,” 12/11/2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/AFR_FY2013_TARP-1211-13_Final.pdf, accessed 10/1/2014.

121

122

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TARP PROGRAMS

TARP programs fall into four categories: housing support programs, financial
institution support programs, automotive industry support programs, and asset
support programs.

Housing Support Programs
The stated purpose of TARP’s housing support programs is to help homeowners
and financial institutions that hold troubled housing-related assets. Treasury
obligated only $45.6 billion, then in March 2013, reduced its obligation to $38.5
billion.74 As of September 30, 2014, $13.8 billion (36% of obligated funds) has
been expended.75 However, some of these expended funds have been used for
administrative expenses by the state Housing Finance Agencies participating in the
Hardest Hit Fund program or remain with them as cash on hand.
• Making Home Affordable (“MHA”) Program — According to Treasury, this
umbrella program for Treasury’s foreclosure mitigation efforts is intended to
“help bring relief to responsible homeowners struggling to make their mortgage
payments, while preventing neighborhoods and communities from suffering the
negative spillover effects of foreclosure, such as lower housing prices, increased
crime, and higher taxes.”76 MHA, for which Treasury has obligated $29.8
billion of TARP funds, consists of the Home Affordable Modification Program
(“HAMP”), which includes HAMP Tier 1 and HAMP Tier 2, which both modify
first-lien mortgages to reduce payments; the Federal Housing Administration
(“FHA”) HAMP loan modification option for FHA-insured mortgages
(“Treasury/FHA-HAMP”); the U.S. Department of Agriculture Office of Rural
Development (“RD”) HAMP (“RD-HAMP”); the Home Affordable Foreclosure
Alternatives (“HAFA”) program; the Second Lien Modification Program
(“2MP”); and the U.S. Department of Veterans Affairs (“VA”) HAMP (“VA
HAMP”), which TARP does not fund.77 HAMP in turn encompasses various
initiatives in addition to the modification of first-lien mortgages, including
Home Price Decline Protection (“HPDP”), the Principal Reduction Alternative
(“PRA”), and the Home Affordable Unemployment Program (“UP”).78
Additionally, the overall MHA obligation of $29.8 billion includes $2.7 billion to
support the Treasury/FHA Second-Lien Program (“FHA2LP”), which expired as
of December 31, 2013. FHA2LP was to complement the FHA Short Refinance
program (discussed later) and was intended to support the extinguishment
of second-lien loans, but no second liens had been partially written down or
extinguished under the program before it expired.79
As of September 30, 2014, MHA had expended $9.3 billion of TARP money
(31% of $29.8 billion).80 Of that amount, $7.7 billion was expended on HAMP,
which includes $1.4 billion expended on homeowners’ HAMP permanent
modifications that later redefaulted.81 In addition, $846.4 million was expended
on HAFA and $656.1 million on 2MP.82 As of September 30, 2014, there
were 474,565 active Tier 1 and 61,975 active Tier 2 permanent first-lien
modifications under the TARP-funded portion of HAMP, an increase of 931

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Tier 1 and 6,657 Tier 2 active permanent modifications over the past quarter.83
For more information, including participation numbers for each of the MHA
programs and subprograms, see the “Housing Support Programs” discussion in
this section.
• Housing Finance Agency (“HFA”) Hardest Hit Fund (“HHF”) — The stated
purpose of this program is to provide TARP funding for “innovative measures
to help families in the states that have been hit the hardest by the aftermath
of the housing bubble.”84 Treasury obligated $7.6 billion for this program.85 As
of September 30, 2014, $4.5 billion had been drawn down by the states from
HHF.86 However, as of June 30, 2014, the latest data available, only $3.1 billion
had been spent assisting 193,716 homeowners, with the remaining $432.5
million funds used for administrative expenses and $644.4 million as unspent
cash-on-hand.87,i For more information, see the “Housing Support Programs”
discussion in this section.88
• FHA Short Refinance Program — Treasury has provided a TARP-funded
letter of credit for up to $1 billion in loss protection on refinanced first liens.
As of September 30, 2014, Treasury has paid $47,840 on one claim for one
default under the program.89 As of September 30, 2014, there have been 4,963
refinancings under the FHA Short Refinance program, an increase of 339
refinancings during the past quarter.90 For more information, see the “Housing
Support Programs” discussion in this section.

Financial Institution Support Programs
Treasury primarily invested capital directly into financial institutions including
banks, bank holding companies, and, if deemed by Treasury critical to the financial
system, some systemically significant institutions.91
• Capital Purchase Program (“CPP”) — Under CPP, Treasury directly
purchased preferred stock or subordinated debentures in qualifying financial
institutions.92 CPP was intended to provide funds to “stabilize and strengthen
the U.S. financial system by increasing the capital base of an array of healthy,
viable institutions, enabling them [to] lend to consumers and business[es].”93
Treasury invested $204.9 billion in 707 institutions through CPP, which closed
to new funding on December 29, 2009.94 As of September 30, 2014, 77 of those
institutions remained in TARP; in 34 of them, Treasury holds only warrants to
purchase stock. Treasury does not consider these 34 institutions to be in TARP,
however Treasury applies all proceeds from the sale of warrants in these banks
to recovery amounts in TARP’s CPP program. As of September 30, 2014, 43
of the 77 institutions had outstanding CPP principal investments.95 Nearly a
quarter of the 707 banks, or 165, refinanced into other Government programs
— 28 of them into TARP’s CDCI and 137 into SBLF, a non-TARP program.96

i Figures

obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursements to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

Systemically Significant Institutions:
Term referring to any financial
institution whose failure would impose
significant losses on creditors and
counterparties, call into question the
financial strength of similar institutions,
disrupt financial markets, raise
borrowing costs for households and
businesses, and reduce household
wealth.

123

124

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Community Development Financial
Institutions (“CDFIs”): Financial
institutions eligible for Treasury funding
to serve urban and rural low-income
communities through the CDFI Fund.
CDFIs were created in 1994 by the
Riegle Community Development and
Regulatory Improvement Act.

Only 253 of the banks, or 36% of the original 707, fully repaid CPP otherwise.97
Of the other banks that have exited CPP, four CPP banks merged with other
CPP banks, Treasury sold its investments in 30 banks for less than par and its
investments in 182 banks at auction (164 of those investments sold at a loss),
and 30 institutions or their subsidiary banks failed, meaning Treasury lost its
entire investment in those banks.98 As of September 30, 2014, taxpayers were
still owed $5.5 billion related to CPP. According to Treasury, it had write-offs
and realized losses of $4.9 billion in the program, leaving $0.6 billion in TARP
funds outstanding.99 According to Treasury, $197.2 billion of the CPP principal
(or 96%) had been recovered as of September 30, 2014. The repayment amount
includes $363.3 million in preferred stock that was converted from CPP
investments into CDCI and therefore still represents outstanding obligations to
TARP. Additionally, $2.2 billion was refinanced in 2011 into SBLF, a non-TARP
Government program.100
Treasury continues to manage its portfolio of CPP investments, including,
for certain struggling institutions, converting its preferred equity ownership into
a more junior form of equity ownership, often at a discount to par value (which
may result in a loss) in an attempt to preserve some value that might be lost if
these institutions were to fail. As of September 30, 2014, Treasury has held 26
sets of auctions to sell all of its preferred stock investments in 182 banks, selling
all but 18 investments at a discounted price resulting in a loss to Treasury.101
Treasury lost a total of $1 billion in the auctions, including $781.3 million from
discounts on principal investments in the institutions and $241.3 million in
forfeited unpaid dividends and interest owed by the institutions.102 For more
information, see the “Capital Purchase Program” discussion in this section.
• Community Development Capital Initiative (“CDCI”) — Under CDCI,
Treasury used TARP money to buy preferred stock in or subordinated debt from
Community Development Financial Institutions (“CDFIs”). Treasury intended
for CDCI to “improve access to credit for small businesses in the country’s
hardest-hit communities.”103 Under CDCI, TARP made capital investments
in the preferred stock or subordinated debt of eligible banks, bank holding
companies, thrifts, and credit unions.104 Eighty-four institutions received $570.1
million in funding under CDCI.105 However, 28 of these institutions converted
their existing CPP investment into CDCI ($363.3 million of the $570.1
million) and 10 of those that converted received combined additional funding
of $100.7 million under CDCI.106 Only $106 million of CDCI money went to
institutions that were not already TARP recipients. As of September 30, 2014,
68 institutions remained in CDCI.107 As of September 30, 2014, two remaining
CDCI institutions had unpaid dividend or interest payments.108 For more
information, see the “Community Development Capital Initiative” discussion in
this report.
• Systemically Significant Failing Institutions (“SSFI”) Program — SSFI
enabled Treasury to invest in systemically significant institutions to prevent
them from failing.109 Only one firm received SSFI assistance: American
International Group, Inc. (“AIG”).

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

The Government’s rescue of AIG involved several different funding facilities
provided by the Federal Reserve Bank of New York (“FRBNY”) and Treasury,
with various changes to the transactions over time. Combined, Treasury and
FRBNY committed $182 billion to bail out AIG, of which $161 billion was
disbursed.110 That included $67.8 billion in TARP funds. Treasury’s investment
in AIG ended on March 1, 2013.
As reflected on Treasury’s books and records, taxpayers recouped $54.4
billion of the $67.8 billion in TARP funds and realized losses from an
accounting standpoint of $13.5 billion on Treasury’s sale of AIG stock.111 Due
to a January 2011 restructuring of the FRBNY and Treasury investments,
Treasury held common stock from both the TARP and FRBNY assistance, and,
according to Treasury, the Government overall has made a $4.1 billion gain on
the stock sales, and $959 million has been paid in dividends, interest, and other
income.112
On July 9, 2013, the Financial Stability Oversight Council (“FSOC”)
announced that it had designated AIG as a systemically important nonbank
financial company under Dodd-Frank, thereby subjecting AIG to consolidated
supervision by the Board of Governors of the Federal Reserve System (“Federal
Reserve”) and to enhanced prudential standards.113
For more information, see the “Systemically Significant Failing Institutions
Program” discussion in this section.
• Targeted Investment Program (“TIP”) — Through TIP, Treasury invested in
financial institutions it deemed critical to the financial system.114 There were
two expenditures under this program, totaling $40 billion — the purchases of
$20 billion each of senior preferred stock in Citigroup Inc. (“Citigroup”) and
Bank of America Corp. (“Bank of America”).115 Treasury also accepted common
stock warrants from each, as required by EESA. Both banks fully repaid
Treasury for its TIP investments.116 Treasury auctioned its Bank of America
warrants on March 3, 2010, and auctioned its Citigroup warrants on January
25, 2011.117 For more information on these transactions, see the “Targeted
Investment Program and Asset Guarantee Program” discussion in this section.
• Asset Guarantee Program (“AGP”) — AGP was designed to provide
insurance-like protection for a select pool of mortgage-related or similar assets
held by participants whose portfolios of distressed or illiquid assets threatened
market confidence.118 Treasury, the Federal Deposit Insurance Corporation
(“FDIC”), and the Federal Reserve offered certain loss protections in connection
with $301 billion in troubled Citigroup assets.119 In exchange for providing
the loss protection, Treasury received $4 billion of preferred stock that was
later converted to trust preferred securities (“TRUPS”), and FDIC received
$3 billion.120 On December 23, 2009, in connection with Citigroup’s TIP
repayment, Citigroup and the Government terminated the AGP agreement and
the Government suffered no loss. On December 28, 2012, FDIC transferred
$800 million of Citigroup TRUPS to Treasury, as a result of Citigroup’s
participation in FDIC’s Temporary Liquidity Guarantee Program having closed
without a loss.121 Treasury converted the TRUPS it received from FDIC into
Citigroup subordinated notes and subsequently sold them for $894 million.122

Senior Preferred Stock: Shares that
give the stockholder priority dividend
and liquidation claims over junior
preferred and common stockholders.
Illiquid Assets: Assets that cannot be
quickly converted to cash.
Trust Preferred Securities (“TRUPS”):
Securities that have both equity and
debt characteristics, created by
establishing a trust and issuing debt
to it.

125

126

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

For more information, see the “Targeted Investment Program and Asset
Guarantee Program” discussion in this section.

Automotive Industry Support Programs
TARP’s automotive industry support through the Automotive Industry Financing
Program (“AIFP”) aimed to “prevent a significant disruption of the American
automotive industry, which would pose a systemic risk to financial market
stability and have a negative effect on the economy of the United States.”123 As of
September 30, 2014, Ally Financial Inc. (“Ally Financial”), formerly GMAC Inc.,
remains the only auto-related company whose stock is owned by Treasury. As of
September 30, 2014, taxpayers are owed $3.7 billion for TARP’s investment in Ally
Financial. In return for its investment, as of September 30, 2014, Treasury held
66,175,340 shares or approximately 13.8% of Ally Financial’s common stock. This
followed its sale of 8.9 million shares on September 12, 2014, in which it recovered
approximately $218.7 million, and concluded its first pre-defined written trading
plan. On October 17, 2014, Treasury announced the conclusion of its second
trading plan with the sale of 11,249,044 shares, recovering approximately $245.5
million.124 Treasury now holds approximately 54.9 million shares of common stock,
or approximately 11.4 % of Ally Financial.125 For the government to break even on
its investment, Ally’s remaining shares would need to trade at approximately $64
per share—about triple the closing price per share of Ally Financial on October
17, 2014.126 This transaction followed the sale of 95 million shares as part of Ally’s
IPO on April 15, 2014 and a subsequent sale of 7.2 million shares on May 14,
2014, recovering $2.4 billion and $182 million, respectively. Prior to the IPO, on
January 23, 2014, Treasury sold 410,000 shares of Ally Financial common stock
for approximately $3 billion in a private placement, after which it owned 37% of
the company’s stock.127 Treasury sold its last shares in General Motors Company
(“GM”) on December 9, 2013. Separately, on March 20, 2014, Treasury wrote off
an $826 million administrative claim in the company’s 2009 bankruptcy, ending all
taxpayer involvement with GM.128
As of September 30, 2014, taxpayers have lost $11.2 billion on the principal
TARP investment in GM. Taxpayers had also lost $1.9 billion on the sale of Ally
Financial’s common stock, as well as $2.9 billion on the principal TARP investment
in Chrysler Holding LLC (“Chrysler”). Chrysler Financial Services Americas LLC
(“Chrysler Financial”) fully repaid its TARP investment.129
Through AIFP, Treasury made emergency loans to Chrysler, Chrysler Financial,
and GM. Additionally, Treasury bought senior preferred stock from Ally Financial
and assisted Chrysler and GM during their bankruptcy restructurings. As of
September 30, 2014, $79.7 billion had been disbursed through AIFP and its
subprograms, and Treasury had recovered $61.9 billion in principal repayments,
preferred stock redemption proceeds, and stock sale proceeds. As of September
30, 2014, Treasury had recovered approximately $38.9 billion related to its GM
investment, $13.4 billion related to its Ally Financial/GMAC investment, $8 billion
related to its Chrysler investment, and $1.5 billion related to its Chrysler Financial
investment.130 As of September 30, 2014, Treasury had also received approximately

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

$5.6 billion in dividends and interest under AIFP and its two subprograms, ASSP
and AWCP.131
In return for a total of $49.5 billion in loans to GM, Treasury received $6.7
billion in debt in GM (which was subsequently recovered), in addition to $2.1
billion in preferred stock and a 61% common equity stake.132 Through a series of
stock sales, Treasury has divested its preferred stock and all of its common stock
as of December 9, 2013. Because the common stock sales all took place below
Treasury’s break-even price, Treasury has booked a loss of $10.3 billion on the sales
as of September 30, 2014, for a total loss on GM of $11.2 billion.133
Treasury invested a total of $17.2 billion in Ally Financial, and $3.7 billion of
that remained outstanding as of September 30, 2014. On December 30, 2010,
Treasury’s investment was restructured to provide for a 74% common equity
stake, $2.7 billion in TRUPS (including amounts received in warrants that were
immediately converted into additional securities), and $5.9 billion in mandatorily
convertible preferred shares (“MCP”).134 Treasury sold the $2.7 billion in TRUPS
on March 2, 2011, resulting in a $2.5 billion principal repayment to Treasury.135
On November 20, 2013, Ally paid Treasury $5.2 billion to repurchase the $5.9
billion par value of MCP, plus a payment of $725 million to terminate the share
adjustment right (reducing Treasury’s ownership stake from 74% to 63%).136 The
November 20, 2013 repurchase represented a $5.6 billion recovery of principal,
bringing total Ally principal repayments to $8.2 billion.137 Treasury’s sale of
410,000 shares of Ally common stock on January 23, 2014, for approximately $3
billion, brought the amount recovered by Treasury to $10.7 billion.138 In addition,
Treasury’s share sales in the April 15, 2014, IPO are reported at $2.4 billion.139
Treasury provided approximately $12.5 billion in loan commitments to Chrysler,
of which $2.1 billion was never drawn down.140 On July 21, 2011, Treasury sold to
Fiat for $500 million Treasury’s remaining equity ownership interest in Chrysler.141
Treasury also sold to Fiat for $60 million Treasury’s rights to receive proceeds under
an agreement with the United Auto Workers (“UAW”) retiree trust. Treasury’s
books reflect a $2.9 billion loss to taxpayers on their principal investment in
Chrysler.142 In addition, Treasury provided a $1.5 billion loan to Chrysler Financial,
which was fully repaid with interest in July 2009.143
For more information, see the “Automotive Industry Support Programs”
discussion in this section.
AIFP also included two subprograms:
• Auto Supplier Support Program (“ASSP”) — On March 19, 2009, Treasury
committed $5 billion to ASSP to “help stabilize the automotive supply base and
restore credit flows,” with loans to GM ($290 million) and Chrysler ($123.1
million) fully repaid in April 2010.144
• Auto Warranty Commitment Program (“AWCP”) — AWCP guaranteed
Chrysler and GM vehicle warranties during the companies’ bankruptcy, with
Treasury obligating $640.8 million — $360.6 million for GM and $280.1
million for Chrysler, both fully repaid to Treasury.145

127

128

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Asset Support Programs
Asset-Backed Securities (“ABS”): Bonds
backed by a portfolio of consumer
or corporate loans (e.g., credit card,
auto, or small-business loans). Financial
companies typically issue ABS backed
by existing loans in order to fund new
loans for their customers.
Servicing Advances: If borrowers’
payments are not made promptly
and in full, mortgage servicers are
contractually obligated to advance the
required monthly payment amount in
full to the investor. Once a borrower
becomes current or the property is
sold or acquired through foreclosure,
the servicer is repaid all advanced
funds.
Commercial Mortgage-Backed
Securities (“CMBS”): Bonds backed by
one or more mortgages on commercial
real estate (e.g., office buildings, rental
apartments, hotels).
Legacy Securities: Real estate-related
securities originally issued before
2009 that remained on the balance
sheets of financial institutions because
of pricing difficulties that resulted from
market disruption.
Non-Agency Residential MortgageBacked Securities (“non-agency
RMBS”): Financial instrument backed
by a group of residential real estate
mortgages (i.e., home mortgages for
residences with up to four dwelling
units) not guaranteed or owned by
a Government-sponsored enterprise
(“GSE”) or a Government agency.

The stated purpose of these programs was to support the liquidity and market value
of assets owned by financial institutions to free capital so that these firms could
extend more credit to support the economy. These assets included various classes
of asset-backed securities (“ABS”) and several types of loans.
• Term Asset-Backed Securities Loan Facility (“TALF”) — TALF was
originally designed to increase credit availability for consumers and small
businesses through a $200 billion Federal Reserve loan program. TALF provided
investors with non-recourse loans secured by certain types of ABS, including
credit card receivables, auto loans, equipment loans, student loans, floor
plan loans, insurance-premium finance loans, loans guaranteed by the Small
Business Administration (“SBA”), residential mortgage servicing advances, and
commercial mortgage-backed securities (“CMBS”).146 TALF closed to new loans
in June 2010.147 TALF ultimately provided $71.1 billion in Federal Reserve
financing — $59 billion with non-mortgage related ABS as collateral and $12.1
billion with CMBS as collateral.148 Of that amount, $14.3 million remained
outstanding as of September 30, 2014.149 As of early 2013, the TALF program
collected fees totaling more than the amount of loans still outstanding.150 As of
September 30, 2014, there had been no surrender of collateral related to these
loans.151 For more information, see the “TALF” discussion in this section.
• Public-Private Investment Program (“PPIP”) — PPIP’s goal was to restart
credit markets by using a combination of private equity, matching Government
equity, and Government debt to purchase legacy securities, i.e., CMBS and
non-agency residential mortgage-backed securities (“non-agency RMBS”).152
Under the program, nine Public-Private Investment Funds (“PPIFs”) managed
by private asset managers invested in non-agency RMBS and CMBS. Treasury
originally obligated $22.4 billion in TARP funds to the program and reduced
the amount over time to $18.8 billion as of September 30, 2014. Together, all
nine PPIFs drew down $18.6 billion in debt and equity financing from Treasury
funding out of the total obligation, and fully repaid Treasury.153 As of September
30, 2014, the entire PPIP portfolio had been liquidated, and seven PPIP funds
were legally dissolved while the other one was winding down operations.154 For
more information, see the “Public-Private Investment Program” discussion in
this section.
• Unlocking Credit for Small Businesses (“UCSB”)/Small Business
Administration (“SBA”) Loan Support Initiative — In March 2009, Treasury
officials announced that Treasury would buy up to $15 billion in securities
backed by SBA loans under UCSB.155 Treasury obligated a total of $400 million
for UCSB and made purchases of $368.1 million in 31 securities under the
program. Treasury sold the last of its UCSB securities on January 24, 2012,
ending the program with a net investment gain of about $9 million.156 For more
information, see the “Unlocking Credit for Small Businesses/Small Business
Administration Loan Support” discussion in this section.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

HOUSING SUPPORT PROGRAMS

On February 18, 2009, the Administration announced a foreclosure prevention
plan that became the Making Home Affordable (“MHA”) program, an umbrella
program for the Administration’s homeowner assistance and foreclosure prevention
efforts.157 MHA initially consisted of the Home Affordable Modification Program
(“HAMP”), a Treasury program that uses TARP funds to provide incentives for
mortgage servicers to modify eligible first-lien mortgages, and two initiatives at
the Government-sponsored enterprises (“GSEs”) that use non-TARP funds.158
HAMP was originally intended “to help as many as three to four million financially
struggling homeowners avoid foreclosure by modifying loans to a level that is
affordable for borrowers now and sustainable over the long term.”159 On June 1,
2012, HAMP expanded the pool of homeowners potentially eligible to be assisted
through the launch of HAMP Tier 2; however, Treasury has not estimated the
number of homeowners that HAMP Tier 2 is intended to assist.160 On June 13,
2013, Treasury generally extended MHA programs for an additional two years,
from December 31, 2013, to December 31, 2015.161 On June 26, 2014 it further
extended MHA programs for another year, through December 31, 2016.162
Treasury over time expanded MHA to include sub-programs. Treasury also
allocated TARP funds to support two additional housing support efforts: TARP
funding for 19 state housing finance agencies, called the Housing Finance
Agency Hardest Hit Fund (“Hardest Hit Fund” or “HHF”) and a Federal Housing
Administration (“FHA”) refinancing program. The HHF program is scheduled
to expire on December 31, 2017. The FHA refinancing program, known as FHA
Short Refinance, is scheduled to expire on December 31, 2014.163
Not all housing support programs are funded, or completely funded, by TARP.
Of the originally anticipated $75 billion cost for MHA, $50 billion was to be
funded by TARP, with the remainder funded by the GSEs.164 Although Treasury
originally committed to use $50 billion in TARP funds for these programs,
it subsequently obligated only $45.6 billion, and in March 2013, reduced its
obligation to $38.5 billion, which includes $29.8 billion for MHA incentive
payments, $7.6 billion for the Hardest Hit Fund, and $1 billion for FHA Short
Refinance.165
Housing support programs include the following initiatives:
• Home Affordable Modification Program (“HAMP” or “HAMP Tier 1”)
— HAMP is intended to use incentive payments to encourage loan servicers
(“servicers”) and investors to modify eligible first-lien mortgages so that the
monthly payments of homeowners who are currently in default or generally at
imminent risk of default will be reduced to affordable and sustainable levels.166
Incentive payments for modifications to loans owned or guaranteed by the
GSEs are paid by the GSEs, not TARP.167 As of September 30, 2014, there were
899,673 active permanent HAMP Tier 1 modifications, 474,565 of which were
under TARP, with the remainder under the GSE portion of the program.168

Government-Sponsored Enterprises
(“GSEs”): Private corporations created
and chartered by the Government to
reduce borrowing costs and provide
liquidity in the market, the liabilities
of which are not officially considered
direct taxpayer obligations. On
September 7, 2008, the two largest
GSEs, the Federal National Mortgage
Association (“Fannie Mae”) and
the Federal Home Loan Mortgage
Corporation (“Freddie Mac”), were
placed into Federal conservatorship.
They are currently being financially
supported by the Government.
Loan Servicers: Companies that
perform administrative tasks on
monthly mortgage payments until the
loan is repaid. These tasks include
billing, tracking, and collecting monthly
payments; maintaining records of
payments and balances; allocating
and distributing payment collections
to investors in accordance with
each mortgage loan’s governing
documentation; following up
on delinquencies; and initiating
foreclosures.
Investors: Owners of mortgage loans
or bonds backed by mortgage loans
who receive interest and principal
payments from monthly mortgage
payments. Servicers manage the
cash flow from homeowners’ monthly
payments and distribute them to
investors according to Pooling and
Servicing Agreements (“PSAs”).

129

130

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

•

Short Sale: Sale of a home for less
than the unpaid mortgage balance. A
homeowner sells the home and the
investor accepts the proceeds as full
or partial satisfaction of the unpaid
mortgage balance, thus avoiding the
foreclosure process.
Deed-in-Lieu of Foreclosure: Instead
of going through foreclosure, the
homeowner voluntarily surrenders the
deed to the home to the investor, as
satisfaction of the unpaid mortgage
balance.

•

•

•

While HAMP generally refers to the first-lien mortgage modification program, it
also includes the following subprograms:
çç Principal Reduction Alternative (“PRA”) — PRA is intended to encourage
the use of principal reduction in modifications for eligible homeowners
whose homes are worth significantly less than the remaining outstanding
balances of their first-lien mortgage loans. It provides TARP-funded
incentives to offset a portion of the principal reduction provided by the
investor.169 As of August 31, 2014, there were 129,489 (Tier 1 and Tier 2)
active permanent modifications through PRA.170
çç Home Price Decline Protection (“HPDP”) — HPDP is intended to
encourage additional investor participation and HAMP modifications in
areas with recent price declines by providing TARP-funded incentives to
offset potential losses in home values.171 As of August 31, 2014, 218,933
(Tier 1 and Tier 2) loan modifications had been started under HPDP, and
145,406 remained active.172
çç Home Affordable Unemployment Program (“UP”) — UP is intended to
offer assistance to unemployed homeowners through temporary forbearance
of all or a portion of their payments.173 As of August 31, 2014, which
according to Treasury is the most recent data available, 4,342 homeowners
were actively participating in UP.174
Home Affordable Modification Program Tier 2 (“HAMP Tier 2”) — HAMP
Tier 2 is an expansion of HAMP to permit HAMP modifications on non-owneroccupied “rental” properties, and to allow homeowners with a wider range of
debt-to-income ratios to receive modifications.175 As of September 30, 2014,
71,183 HAMP Tier 2 modifications had become permanent, of which 61,975
remained active.176 Of Tier 2 permanent modifications started, 10,154 were
previously HAMP Tier 1 permanent modifications of which 8,081 remained
active.
Home Affordable Foreclosure Alternatives (“HAFA”) — HAFA is intended
to provide incentives to servicers, investors, and homeowners to pursue short
sales and deeds-in-lieu of foreclosure for homeowners in cases in which the
homeowner is unable or unwilling to enter or sustain a modification. Under
this program, the servicer releases the lien against the property and the investor
waives all rights to seek a deficiency judgment against a homeowner who uses a
short sale or deed-in-lieu when the property is worth less than the outstanding
amount of the mortgage.177 As of September 30, 2014, there were 176,373 short
sales or deeds-in-lieu under HAFA.178
Second-Lien Modification Program (“2MP”) — 2MP is intended to modify
second-lien mortgages when a corresponding first lien is modified under
HAMP by a participating servicer.179 As of September 30, 2014, 16 servicers
are participating in 2MP.180 These servicers represent approximately 55 – 60 %
of the second-lien servicing market.181 As of September 30, 2014, there were
84,053 active permanently modified second liens in 2MP.182
Agency-Insured Programs — These programs are similar in structure to
HAMP, but apply to eligible first-lien mortgages insured by FHA or guaranteed

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

by the Department of Agriculture’s Office of Rural Development (“RD”) and
the Department of Veterans Affairs (“VA”).183 Treasury provides TARP-funded
incentives to encourage modifications under the FHA and RD modification
programs, but not for the VA modification program. As of September 30, 2014,
there were 134 RD-HAMP active permanent modifications, 43,986 FHAHAMP active permanent modifications, and 381 VA-HAMP active permanent
modifications.184
• Treasury/FHA Second-Lien Program (“FHA2LP”) — In FHA2LP, Treasury
uses TARP funds to provide incentives to servicers and investors who agree to
principal reduction or extinguishment of second liens associated with an FHA
refinance.185 According to Treasury, as of December 31, 2013, the program had
expired and no second liens had been partially written down or extinguished
under the program.186
• Housing Finance Agency Hardest Hit Fund (“HHF”) — A TARP-funded
program, HHF is intended to fund foreclosure prevention programs run by state
housing finance agencies in states hit hardest by the decrease in home prices
and in states with high unemployment rates. Eighteen states and Washington,
DC, received approval for aid through the program.187 As of June 30, 2014,
the latest data available, 193,716 homeowners had received assistance under
HHF.188
• FHA Short Refinance Program — This program, which is partially supported
by TARP funds, is intended to provide homeowners who are current on their
mortgage an opportunity to refinance existing underwater mortgage loans that
are not currently insured by FHA into FHA-insured mortgages with lower
principal balances. Treasury has provided a TARP-funded letter of credit for
up to $1 billion in loss coverage on these newly originated FHA loans.189 As
of September 30, 2014, 4,963 loans had been refinanced under FHA Short
Refinance.190

Status of TARP Funds Obligated to Housing Support
Programs
Treasury initially obligated $45.6 billion to housing support programs, which was
reduced to $38.5 billion, of which $13.8 billion, or 36%, has been expended as
of September 30, 2014.191 Of that, $1 billion was expended in the quarter ended
September 30, 2014. However, some of the expended funds remain as cashon-hand or paid for administrative expenses at state housing finance agencies
(“HFAs”) participating in the Hardest Hit Fund program. Treasury has capped the
aggregate amount available to pay servicer, homeowner, and investor incentives
under MHA programs at $29.8 billion, of which $9.3 billion (31%), has been
spent as of September 30, 2014.192 Treasury allocated $7.6 billion to the Hardest
Hit Fund. As of September 30, 2014, of the $7.6 billion in TARP funds available
for HHF, states had drawn down $4.5 billion.193 As of June 30, 2014, the latest
date for which spending analysis is available, the states had drawn down $4.2
billion.194 As of June 30, 2014, states had spent $3.1 billion (41%) of the allocated

Underwater Mortgage: Mortgage loan
on which a homeowner owes more
than the home is worth, typically as
a result of a decline in the home’s
value. Underwater mortgages also are
referred to as having negative equity.

131

132

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

funds to assist 193,716 homeowners, spent $432.5 million (6%) for administrative
i ii
expenses, and held $644.4 million (8%) as unspent cash-on-hand.195, , Treasury
originally allocated $8.1 billion for FHA Short Refinance, but deobligated $7.1
billion in March 2013.196 Of the $1 billion currently allocated for FHA Short
Refinance, $59.7 million has been spent, which includes $50 million held in a prefunded reserve account to pay future claims, $9.7 million spent on administrative
expenses, and $47,840 spent on one refinanced mortgage that later redefaulted.197
Table 4.5 shows the breakdown in expenditures and estimated funding
allocations for these housing support programs. Figure 4.1 also shows these
expenditures, as a percentage of allocations.
TABLE 4.5

TARP ALLOCATIONS AND EXPENDITURES BY HOUSING SUPPORT PROGRAMS,
AS OF 9/30/2014 ($ BILLIONS)
ALLOCATIONS

EXPENDITURES

MHA
HAMPa
First Lien Modification

$19.1

$6.3

PRA Modification

2.0

1.0

HPDP

1.6

UP

—
HAMP Total

0.4
—

b

$22.7

$7.7

HAFA

4.2

0.8

2MP

0.1

0.7

Treasury FHA-HAMP

0.2

RD-HAMP

—c

—d

FHA2LP

—d

2.7
MHA Total

—
$29.8

$9.3

HHF (Drawdown by States)e

$7.6

$4.5

FHA Short Refinance

$1.0

$0.1

$38.5

$13.8

f

Total

Notes: Numbers may not total due to rounding. According to Treasury, these numbers are “approximate.”
a
Includes HAMP Tier 1 and HAMP Tier 2.
b
Treasury does not allocate TARP funds to UP.
c
Treasury has expended $0.1 billion for the Treasury FHA-HAMP program.
d
Treasury has allocated $0.02 billion to the RD-HAMP program. As of September 30, 2014, $268,926 has been expended for
RD-HAMP.
e
Not all of the funds drawn down by states have been used to assist homeowners. As of June 30, 2014, HFAs had drawn down
approximately $4.2 billion, and, according to the latest data available, only $3.1 billion (41%) of TARP funds allocated for HHF have
gone to help 193,716 homeowners.
f
This amount includes up to $25 million in fees Treasury will incur for the availability and usage of the $1 billion letter of credit.
Sources: Treasury, responses to SIGTARP data calls, 1/5/2012, and 10/6/2014; Treasury, Transactions Report-Housing Programs,
9/29/2014; Treasury, Daily TARP Update 10/1/2014.

i According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in

HHF programs that are anticipated to be disbursed over the duration of their participation; HFAs [states] vary as to when and how
they capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
ii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursements to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.1

TARP HOUSING SUPPORT FUNDS ALLOCATED AND SPENT,
AS OF 9/30/2014 ($ BILLIONS)
34% spent
($7.7 billion)

HAMP
$22.7 billion
59% spenta
($4.5 billion)

Hardest Hit Fund
$7.6 billion

20% spent
($0.8 billion)

HAFA
$4.2 billion
FHA2LP
$2.7 billion

Funds Allocated
Funds Spent

None spent
6% spent
($0.1 billion)

FHA Short Refinance
$1 billion

48% spent
($0.1 billion)

Treasury FHA–HAMP
$0.2 billion
0

$5
billion

$10
billion

$15
billion

$20
billion

$25
billion

Notes: Numbers may not total due to rounding. HAMP includes HAMP Tier 1, HAMP Tier 2, HPDP, and PRA.
TARP funds are not used to support the UP program, which provides forbearance of a portion of the
homeowner’s mortgage payment. RD-HAMP expenditures equal $268,926 as of September 30, 2014.
Treasury has allocated $0.1 billion for the 2MP program. As of September 30, 2014, $0.7 billion has been
expended for 2MP. As of December 31, 2013, the FHA2LP program had expired.
a
In this figure, Hardest Hit Funds “spent” represents the amount of funds states had drawn down as of
September 30, 2014. Treasury requires states to return any HHF funds drawn down but unspent after
December 31, 2017. According to Treasury, committed program funds are funds committed to
homeowners who have been approved to participate in HHF programs that are anticipated to be disbursed
over the duration of their participation; states vary as to when and how they capture and report
funds as committed. HHF funds committed for homeowner assistance are recorded variously as
homeowner assistance, cash-on-hand, or undrawn funds.
Sources: Treasury, responses to SIGTARP data calls, 1/5/2012 and 10/6/2014.

As of September 30, 2014, Treasury had active agreements with 81 servicers.198
That compares with 145 servicers that had agreed to participate in MHA as
of October 3, 2010.199 According to Treasury, of the $29.8 billion obligated to
participating servicers under their Servicer Participation Agreements (“SPAs”),
as of September 30, 2014, only $9.3 billion (31%) has been spent, broken down
as follows: $7.7 billion had been spent on completing permanent modifications
of first liens, including HAMP Tier 1, HAMP Tier 2, PRA, and HPDP (536,540
of which remain active); $656.1 million had been spent under 2MP; and $846.4
million had been spent on incentives for short sales or deeds-in-lieu of foreclosure
under HAFA.200 Of the combined amount of incentive payments, according to
Treasury, approximately $4.9 billion went to pay investor or lender incentives, $2.5
billion went to pay servicer incentives, and $1.8 billion went to pay homeowner
incentives.201 As of September 30, 2014, of the $7.6 billion in TARP funds available
for HHF, states had drawn down $4.5 billion.202 As of June 30, 2014, states had
drawn down $4.2 billion and, according to the latest data available, had spent
$3.1 billion (41%) of those funds to assist 193,716 homeowners, spent $432.5
million (6%) for administrative expenses, and held $644.4 million (8%) as unspent

133

134

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

iii

cash-on-hand.203, As of September 30, 2014, there remains $3.1 billion in HHF
in undrawn funds. The remaining $1 billion of TARP housing funds has been
obligated under FHA Short Refinance to purchase a letter of credit to provide up
to $1 billion in first loss coverage and to pay $25 million in fees for the letter of
credit.204 According to Treasury, it has paid only one claim for one default on the
4,963 loans refinanced under FHA Short Refinance. However, Treasury has prefunded a reserve account with $50 million to pay future claims and has spent $9.7
million on administrative expenses.205 Table 4.6 shows the breakdown of TARPfunded expenditures related to housing support programs (not including the GSEfunded portion of HAMP).

iii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.6
BREAKDOWN OF TARP EXPENDITURES, AS OF 9/30/2014 ($ MILLIONS)
MHA

TARP Expenditures

HAMP
HAMP First Lien Modification Incentives
Servicer Incentive Payment
Servicer Current Borrower Incentive Payment
Annual Servicer Incentive Payment
Investor Current Borrower Incentive Payment

$709.0
$16.8
$1,274.2
$70.3

Investor Monthly Reduction Cost Share

$2,725.5

Annual Borrower Incentive Payment

$1,337.1

Tier 2 Incentive Payments

$130.1

HAMP First Lien Modification Incentives Total

$6,263.1

PRA

$1,016.2

HPDP
UP

$371.3
$—a

HAMP Program Incentives Total

$7,650.6

HAFA Incentives
Servicer Incentive Payment

$249.7

Investor Reimbursement

$187.4

Borrower Relocation

$409.3

HAFA Incentives Total

$846.4

Second-Lien Modification Program Incentives
2MP Servicer Incentive Payment

$68.4

2MP Annual Servicer Incentive Payment

$40.9

2MP Annual Borrower Incentive Payment

$37.9

2MP Investor Cost Share

$208.2

2MP Investor Incentive

$300.8

Second-Lien Modification Program Incentives Total

$656.1

Treasury/FHA-HAMP Incentives
Annual Servicer Incentive Payment

$49.5

Annual Borrower Incentive Payment

$47.4

Treasury/FHA-HAMP Incentives Total
RD-HAMP
FHA2LP

$96.9
$—b
$—

MHA Incentives Total

$9,250.3

HHF Disbursements (Drawdowns by State HFAs)

$4,471.5

FHA Short Refinance (Loss-Coverage)
Total Expenditures

$59.7
$13,781.4

Notes: Numbers may not total due to rounding.
a
TARP funds are not used to support the UP program, which provides forbearance of a portion of the homeowner’s mortgage
payment.
b
RD-HAMP expenditures equal $268,926 as of September 30, 2014.
Source: Treasury, response to SIGTARP data call, 10/6/2014.

135

136

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

HOME AFFORDABLE UP: A HIGHLY UNDERUTILIZED
PROGRAM
HAMP has suffered in three stages: (1) not getting enough homeowners into
a HAMP trial mortgage modification; (2) not getting enough homeowners in a
HAMP trial modification converted to a permanent modification; and (3) high
redefault rates of homeowners falling out of a HAMP permanent modification.
Treasury’s Home Affordable Unemployment Program (“UP”) is not reaching its
full potential to help homeowners who become unemployed at any of those
three stages. More than 5 million homeowners have been rejected for a trial
modification under HAMP compared to just over 2 million who have entered
into a HAMP trial modification. Of the more than 2 million homeowners who
started a HAMP trial modification, approximately 800,000 did not convert
to a permanent modification. Additionally, SIGTARP has reported many times
on the high rates of redefault by homeowners who managed to get a HAMP
permanent modification, only to later fall out of HAMP. Treasury specifically
contemplated that unemployment could pose challenges to homeowners
applying for or already in HAMP, and they specifically designed a TARP
program to address that challenge.
Treasury created UP to help unemployed homeowners hold onto their
homes while they seek a HAMP mortgage modification. Under UP, mortgage
servicers can reduce or postpone unemployed homeowners’ mortgage
payments – called “forbearance.” To date, the average reduction in
homeowner monthly payments has been $742.206 When Treasury first rolled
out HAMP, it made the forbearance period 3-6 months. Given the length
of unemployment faced by homeowners, earlier in the program, SIGTARP
recommended that Treasury lengthen the UP forbearance period to one year,
which Treasury eventually did.207
Unfortunately, since its launch in July 2010, only 41,213 homeowners have
started an UP forbearance plan, while nearly 100,000 homeowners have
been rejected for UP relief.208 Only half of the homeowners in UP (21,912)
completed their UP forbearance plan successfully, while almost 15,000
homeowners fell out of UP.209 Only about 15% of homeowners who started an
UP plan went on to receive a HAMP modification.210 About 4,000 homeowners

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

are currently in the program.211 Although used in all 50 states and in some
U.S. territories, about half of all UP forbearance has gone to five states:
California, Florida, Illinois, Texas and Pennsylvania.212

A Potential Bridge to Other Assistance and Forbearance
Programs
UP is a potentially valuable, but underutilized, tool for Treasury to use to help
struggling homeowners bridge to a HAMP mortgage modification. UP can
also help homeowners who become unemployed while in HAMP and lose good
standing. However, only 2,576 of the homeowners who sought UP assistance
had previously been in a HAMP modification.213 One explanation for UP’s
underutilization may be that servicer participation in UP is voluntary: there is
no TARP funding for UP, and HAMP servicers are not paid for participating.
Given the continuing high rate of national unemployment and demand for
HAMP modifications, UP seems to be only skimming the surface of help
needed by struggling homeowners. UP presents an opportunity for Treasury
to push servicers to get more help to homeowners through UP, which could
translate to more homeowners getting into HAMP and staying in HAMP.

137

138

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

HAMP
According to Treasury, HAMP was intended “to help as many as three to four
million financially struggling homeowners avoid foreclosure by modifying loans to
a level that is affordable for borrowers now and sustainable over the long term.”214
Although HAMP contains several subprograms, the term “HAMP” is most often
used to refer to the HAMP First-Lien Modification Program, described below.

HAMP First-Lien Modification Program
The HAMP First-Lien Modification Program, which went into effect on April
6, 2009, modifies the terms of first-lien mortgages to provide homeowners with
lower monthly payments. A HAMP modification consists of two phases: a trial
modification that was designed to last three months, followed by a permanent
modification. Treasury pays incentives for active TARP (non-GSE) HAMP
permanent modifications for five years.215 In designing HAMP, the Administration
envisioned a “shared partnership” between the Government and investors to bring
distressed homeowners’ first lien monthly payments down to an “affordable and
sustainable” level.216 The program description immediately below refers only to the
original HAMP program, which was renamed “HAMP Tier 1,” after the launch of
HAMP Tier 2.

Trial Modification: Under HAMP, a
period of at least three months in
which a borrower is given a chance
to establish that he or she can make
lower monthly mortgage payments and
qualify for a permanent modification.

For additional information about what
happens to HAMP permanent modifications after five years, please see
the discussion, “Payment Increases on
HAMP-Modified Mortgages to Begin
in 2014,” in this section.

HAMP Modification Statistics
As of September 30, 2014, a total of 899,673 mortgages were in active HAMP
Tier 1 (“HAMP”) permanent modifications under both TARP (non-GSE) and GSE
HAMP. Some 24,783 were in active trial modifications. As of September 30, 2014,
for homeowners receiving permanent modifications, 96% received an interest rate
reduction, 64.7% received a term extension, 34.9% received principal forbearance,
and 16.4% received principal forgiveness.217 Table 4.7 shows HAMP modification
activity, broken out by TARP and GSE loans. For more detail on redefaulted
modifications over the life of HAMP, see Table 4.10 and Figure 4.3. For more
detail on HAMP modification activity, broken out by TARP and GSE loans, see
Table F.1 in Appendix F.

TABLE 4.7

CUMULATIVE HAMP TIER 1 MODIFICATION ACTIVITY BY TARP/GSE, AS OF 9/30/2014

TARP

Trials
Started

Trials
Cancelled

Trials
Active

Trials
Converted to
Permanent

Permanents
Redefaulted

Permanents
Paid Off

Permanents
Active

1,081,488

352,972

16,398

712,118

227,837

9,716

474,565

GSE

1,071,206

429,417

8,385

633,404

182,815

25,481

425,108

Total

2,152,694

782,389

24,783

1,345,522

410,652

35,197

899,673

Source: Treasury, “HAMP 1MP: Program Volumes - Program Type & Payor by Tier - September 2014,” accessed 10/21/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

During the most recent quarter 17,753 homeowners started new trials and
19,536 homeowners were able to convert their trials to permanent modifications.
As 18,151 homeowners re-defaulted in HAMP and another 4,943 paid off their
modified loan, the number of active HAMP permanent modifications decreased by
3,558.218
As shown in Figure 4.2, which shows TARP and GSE HAMP permanent
modifications started, by quarter, the number of new HAMP modifications
continues to decline quarter over quarter.
FIGURE 4.2

HAMP TIER 1 PERMANENT MODIFICATIONS STARTED, BY QUARTER, 2009-2014
180,000
160,000
140,000
120,000
100,000
19,536 HAMP permanent
modifications were started in
the quarter ended 9/30/2014.

80,000
60,000
40,000
20,000
0
Q1

Q2

Q3

2009

Q4

Q1

Q2

Q3

2010

Q4

Q1

Q2

Q3

2011

Q4

Q1

Q2

Q3

2012

Q4

Q1

Q2

Q3

2013

Q4

Q1

Q2

Q3

2014

Note: Includes TARP and GSE permanent modifications.
Sources: Treasury, “Making Home Affordable Program Performance Report,” 1/19/2010, 4/20/2010, 7/19/2010,
10/25/2010, 1/31/2011, 5/6/2011, 8/5/2011, 11/3/2011, 2/6/2012, 5/4/2012, 8/3/2012, 11/9/2012, 2/8/2013,
5/10/2013, 8/9/2013, and 11/8/2013; Treasury, responses to SIGTARP data calls, 2/28/2013, 1/23/2014,
1/24/2014, and 7/24/2014; Treasury, “HAMP 1MP: Program Volumes - Program Type & Payor by Tier - September
2014,” accessed 10/21/2014; Fannie Mae, responses to SIGTARP data calls, 1/23/2014, 4/24/2014, and 7/24/2014.

During this quarter there were 2,235 fewer loans modified under HAMP than
the previous quarter and 147,684 fewer than the second quarter of 2010, the
quarter when the most HAMP permanent modifications were started.219

Payment Increases on HAMP–Modified Mortgages to Begin in 2014
Most homeowners who received HAMP permanent mortgage modifications saw
the interest rates on their loans cut in order to reduce their monthly payments and
make their mortgages more affordable and sustainable over the long term.220 Those
that received modifications in 2009 will see their interest rates rise and monthly
mortgage payments go up this year, and continue to increase for up to another
three years. Some homeowners may eventually see their monthly payment increase
by as much as $1,724 per month.221
Homeowners that received HAMP permanent mortgage modifications had
their monthly mortgage payments reduced to 31% of their gross monthly income
through a series of steps including extending the term of the mortgage, reducing

139

140

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

the principal owed, or cutting the interest rate to as low as 2%.222 The terms of
HAMP permanent modifications remain fixed for five years.223 However, after five
years, a homeowner’s mortgage interest rate can increase if the modified interest
rate had been reduced below where the national average rate was for a 30-year
conforming fixed-rate mortgage on the date of the modification.224 The average
interest rate over the last five years has generally been between 3.5% and 5.4%,
and most modifications cut rates well below that benchmark.225 After five years, the
interest rate on the modified loan can step up incrementally by up to 1% per year
until it reaches that benchmark.226
Table 4.8 shows before-modification, after-modification, and after all
modification increases, median interest rates, interest rate increases, payments, and
payment increases for homeowners who face interest rate and payment increases
on HAMP mortgage modifications, by year. For more detail, see Table F.2 in
Appendix F.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.8

HAMP TIER 1 PERMANENT MODIFICATIONS WITH SCHEDULED PAYMENT INCREASES BY YEAR, AS OF
8/31/2014

Year
Modified
2009

2010

2011

2012

2013

2014

All Years

Total Active
Permanent
Modifications

Permanent
Modifications
with
Scheduled
Payment
Increases

32,892

299,007

229,546

153,272

126,999

59,204

900,920

30,746

278,304

204,322

124,244

104,847

50,704

793,167

Interest Ratea

Monthly Paymenta

Modification Status

Median

Median
Increase

Median

Median
Increase

Before Modification

6.50%

—

$1,437

$—

After Modification

2.00%

—

$765

—

After All Increases

4.94%

2.78%

$1,028

$245

Before Modification

6.50%

—

$1,451

—

After Modification

2.00%

—

$786

—

After All Increases

4.98%

2.58%

$1,041

$239

Before Modification

6.38%

—

$1,438

—

After Modification

2.00%

—

$806

—

After All Increases

4.60%

2.36%

$1,041

$219

Before Modification

6.25%

—

$1,425

—

After Modification

2.00%

—

$746

—

After All Increases

3.66%

1.59%

$898

$140

Before Modification

6.10%

—

$1,356

—

After Modification

2.00%

—

$715

—

After All Increases

3.81%

1.57%

$879

$149

Before Modification

6.13%

—

$1,285

—

After Modification

2.00%

—

$709

—

After All Increases

4.32%

2.29%

$899

$178

Before Modification

6.38%

—

$1,419

—

After Modification

2.00%

—

$769

—

After All Increases

4.48%

2.22%

$985

$197

Notes:
a
Analysis of HAMP permanent modifications with scheduled interest rate and payment increases excludes 68,313 HAMP permanent modifications with incomplete records.
Source: SIGTARP analysis of Treasury HAMP data.

141

142

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

As shown in Table 4.8, 793,167 of the 900,920 (88%) homeowners who had
active HAMP Tier 1 permanent modifications as of August 31, 2014 are scheduled
for these eventual interest rate and payment increases.227 That means just
107,753 homeowners, or 12%, will not experience payment increases.228 Among
homeowners scheduled to have mortgage interest rate and payment increases, the
median interest rate for these loans was 6.38% before modification; the median
monthly payment was $1,419.229 HAMP permanent modifications reduced the
median interest rate for these homeowners’ loans to 2% and their median monthly
payment to $769.230 The scheduled payment increases will cause their median
interest rate to rise to 4.48% and their median payment to increase to $985.231
Their median rate increase will be 2.22% and their median payment increase will
be $197.232 Some homeowners could eventually see their mortgage interest rates
increase to as much as 5.4%; for some, payments eventually could increase by
$1,724 per month; and after all payment increases, the highest mortgage payment
any homeowner would pay per month would be $8,274.233 (SIGTARP’s rate and
payment analysis excludes 68,313 HAMP permanent modifications that are
scheduled to adjust but for which records are incomplete.)
Homeowners in All States Will Be Affected by Payment Increases

Table 4.9 shows, as of August 31, 2014, all active HAMP permanent modifications
with scheduled monthly mortgage payment increases, by state.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.9

HAMP TIER 1 PERMANENT MODIFICATIONS WITH SCHEDULED PAYMENT INCREASES,
AS OF 8/31/2014

State
Alabama
Alaska
Arizona

Total Active
Permanent
Modifications

Total Active Permanent
Modifications With
Scheduled Payment
Increases

Percentage
of Active Permanent
Modifications With
Scheduled Payment
Increase

Median
Payment
Increase
After All
Increasesa

Maximum
Payment
Increase After
All Increasesa

4,723

3,569

76%

$95

$928

401

324

81%

177

809

32,834

29,053

88%

185

1,208

Arkansas

1,837

1,485

81%

97

789

California

235,252

215,124

91%

300

1,724

Colorado

12,392

10,772

87%

171

1,094

Connecticut

11,776

10,384

88%

191

1,237

2,633

2,236

85%

168

834

Florida

113,565

99,682

88%

162

1,168

Georgia

31,491

26,341

84%

133

1,061

Delaware

Guam

7

7

100%

53

173

Hawaii

3,645

3,353

92%

358

1,230

Idaho

3,302

2,800

85%

158

894

Illinois

46,168

40,979

89%

173

1,072

Indiana

8,005

6,311

79%

93

1,022

Iowa

1,960

1,606

82%

91

626

Kansas

2,024

1,655

82%

103

1,042

Kentucky

3,178

2,577

81%

91

865

Louisiana

4,796

3,777

79%

101

922

Maine

2,450

2,156

88%

142

709

Maryland

28,402

24,950

88%

242

1,174

Massachusetts

21,352

19,357

91%

232

1,064

Michigan

25,316

21,614

85%

120

1,273

Minnesota

13,293

11,735

88%

171

1,117

Mississippi

2,887

2,155

75%

87

730

Missouri

8,334

6,694

80%

104

878

Montana

1,015

858

85%

170

1,074

Nebraska

1,121

907

81%

88

632

19,096

17,087

89%

212

1,042

3,833

3,369

88%

180

806

New Jersey

29,687

26,956

91%

235

1,100

New Mexico

3,083

2,559

83%

140

913

48,682

45,130

93%

291

1,507

Nevada
New Hampshire

New York

Continued on next page

143

144

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

HAMP TIER 1 PERMANENT MODIFICATIONS WITH SCHEDULED PAYMENT INCREASES,
AS OF 8/31/2014 (CONTINUED)

State
North Carolina

Total Active
Permanent
Modifications

Total Active Permanent
Modifications With
Scheduled Payment
Increases

Percentage
of Active Permanent
Modifications With
Scheduled Payment
Increase

Median
Payment
Increase
After All
Increasesa

Maximum
Payment
Increase After
All Increasesa

15,628

12,945

83%

$114

$1,060

136

110

81%

111

560

18,116

15,079

83%

97

886

1,966

1,531

78%

83

784

North Dakota
Ohio
Oklahoma
Oregon

10,093

9,031

89%

192

1,052

Pennsylvania

18,645

15,540

83%

129

890

Puerto Rico

3,225

3,013

93%

93

982

Rhode Island

4,304

3,876

90%

191

905

South Carolina

7,999

6,522

82%

116

1,105

South Dakota

281

233

83%

122

836

8,558

6,718

78%

95

1,075

Texas

23,791

18,891

79%

96

1,169

Utah

7,548

6,559

87%

198

1,023

794

691

87%

149

853

7

7

100%

183

549

Virginia

20,833

18,172

87%

227

1,118

Washington

19,370

17,363

90%

220

1,155

District of Columbia

1,532

1,365

89%

258

1,096

West Virginia

1,143

936

82%

121

626

Wisconsin

8,020

6,716

84%

123

968

Tennessee

Vermont
Virgin Islands

Wyoming
Total
a

391

307

79%

160

829

900,920

793,167

88%

$197

$1,724

Analysis of HAMP permanent modifications with scheduled interest rate and payment increases excludes 68,313 HAMP permanent modifications with incomplete records.

Source: SIGTARP analysis of Treasury HAMP data.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

As shown in Table 4.9 above, homeowners in four states account for more
than half of the HAMP permanent modifications scheduled for interest rate and
payment increases: California, Florida, New York, and Illinois.234 Homeowners
in 11 jurisdictions face mortgage payment increases that are more than the $197
national median: California, Hawaii, Maryland, Massachusetts, Nevada, New
Jersey, New York, Virginia, Utah, Washington, and Washington, DC.235 While 88%
of homeowners nationally with HAMP-modified mortgages face scheduled interest
rate and payment increases, that percentage is even higher in 17 jurisdictions:
Arizona, California, Connecticut, Guam, Hawaii, Illinois, Massachusetts,
Minnesota, Nevada, New Jersey, New York, Oregon, Puerto Rico, Rhode Island, the
Virgin Islands, Washington, and Washington, DC.236

Homeowners Who Have Redefaulted on HAMP Permanent
iv
Modifications or Are at Risk of Redefaulting
As of September 30, 2014, HAMP has helped more than 899,673 homeowners
avoid foreclosure through permanent mortgage modifications, but another 410,652
homeowners (or 31%) fell three months behind in payments and, thus, redefaulted
out of the program – often into a less advantageous private sector modification
or even worse, into foreclosure.237 This percentage (cumulative redefault rate)
includes all homeowners who received HAMP permanent modifications since
the start of the program. As of September 30, 2014, taxpayers lost $1.4 billion in
TARP funds paid to servicers and investors as incentives for 227,837 homeowners
who received TARP (non-GSE) HAMP permanent modifications and later
redefaulted.238 Also, 87,657 (10% of active HAMP permanent modifications) had
missed one to two monthly mortgage payments and, thus, are at risk of redefaulting
out of the program.239
The longer a homeowner remains in HAMP, the more likely he or she is to
redefault out of the program, with homeowners redefaulting on the oldest HAMP
v
permanent modifications at a rate of 52.4%. The likelihood of homeowners
redefaulting on their HAMP modifications increase as their modifications age.
Nearly half of all homeowners who received a HAMP permanent modification
received it in 2009 and 2010.240 Homeowners who received HAMP permanent
modifications in 2009 redefaulted at rates ranging from 46.2% to 52.4%,
homeowners who received HAMP permanent modifications in 2010 redefaulted at
rates ranging from 37.7% to 44.9%.241
Homeowners who redefaulted fell out of the HAMP program, and their HAMP
permanent modification was not sustainable. Once again, they risked losing
their homes and some may have lost their homes. Treasury reported that of the
homeowners with redefaulted loans reported by twenty servicers that participated
in a survey, as of August 31, 2014, the latest data provided by Treasury, 23% of
homeowners moved into the foreclosure process, 11% of homeowners lost their
home via a short sale or deed-in-lieu of foreclosure, and 26% of homeowners
iv In this section, “HAMP” refers to the original HAMP First-Lien Modification Program, which Treasury later named HAMP Tier 1.
v Treasury’s calculation of redefault rates may exclude some modifications due to missing or invalid data.

Cumulative Redefault Rate: The
total number of HAMP permanent
modifications that have redefaulted
(as of a specific date) divided by the
total number of HAMP permanent
modifications started (as of the same
specific date).

For more on homeowners who have
redefaulted on HAMP permanent
mortgages or are at risk of defaulting,
see SIGTARP’s July 2013 Quarterly
Report, pages 161-184.

145

146

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

who redefaulted received an alternative modification, usually a private sector
modification.242
Table 4.10 shows the number homeowners that received HAMP modifications
and the number and percentage of homeowners who have redefaulted by year for
GSE and non-GSE loans.
TABLE 4.10

HAMP TIER 1 PERMANENT MODIFICATION REDEFAULT ACTIVITY, AS OF
9/30/2014
Year
Modified

TARP

GSE

Total

Permanents Started
Annual

Permanents Redefaulted

Cumulative

Annual

Cumulative

Redefault Rate
Cumulative

2009

23,633

23,633

129

129

1%

2010

243,262

266,895

29,015

29,144

11%

2011

185,254

452,149

59,080

88,224

20%

2012

114,745

566,894

58,860

147,084

26%

2013

98,423

665,317

49,413

196,497

30%

2014

46,801

712,118

31,340

227,837

32%

Total

712,118

—

227,837

—

2009

43,305

43,305

339

339

1%

2010

269,450

312,755

27,730

28,069

9%

2011

168,423

481,178

51,287

79,356

16%

2012

87,280

568,458

49,229

128,585

23%

2013

43,497

611,955

33,990

162,575

27%

2014

21,449

633,404

20,240

182,815

29%

Total

633,404

—

182,815

—

2009

66,938

66,938

468

468

1%

2010

512,712

579,650

56,745

57,213

10%

2011

353,677

933,327

110,367

167,580

18%

2012

202,025

1,135,352

108,089

275,669

24%

2013

141,920

1,277,272

83,403

359,072

28%

2014

68,250

1,345,522

51,580

410,652

31%

Total

1,345,522

—

410,652

—

Notes: Data is as of December 31, 2009; December 31, 2010; December 31, 2011; December 31, 2012; December 31, 2013
and September 30, 2014.
Sources : Treasury responses to SIGTARP data calls, 1/21/2011, 1/20/2012, 1/22/2013, 2/28/2013, 7/19/2013, 10/21/2013,
10/23/2013, 1/23/2014, and 1/24/2014; Fannie Mae, responses to SIGTARP data calls 10/21/2013 and 1/23/2014; Treasury,
“HAMP 1MP Program Volumes – Program Type and Payor by Tier – September 2014,” accessed 10/21/2014; SIGTARP Quarterly
Report to Congress, 1/30/2010; SIGTARP Quarterly Report to Congress, 1/26/2011; SIGTARP Quarterly Report to Congress,
1/26/2012; SIGTARP Quarterly Report to Congress, 1/30/2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

As shown in Table 4.10, 31% of all homeowners that received HAMP
modifications subsequently redefaulted, this is up from 30% in the previous
quarter. During this quarter 18,151 homeowners redefaulted on their HAMP
modification, bringing the total to 410,652.243
Figure 4.3 provides detail on the status (active and redefaulted) over time of
homeowners’ HAMP permanent modifications by the year they originated.
FIGURE 4.3

ACTIVE AND REDEFAULTED HAMP MODIFICATIONS BY YEAR OF MODIFICATION,
AS OF 9/30/2014
600,000

500,000

400,000

300,000
200,000

100,000

0
2009

2010

2011

2012

2013

2014

Modifications Redefaulted
Modifications Active
Source: Fannie Mae, response to SIGTARP data call, 10/22/2014.

As illustrated in Figure 4.3, over time the rate at which homeowners redefault
on their HAMP modifications increase. More than 40% of the homeowners that
obtained permanent modifications in 2009 and 2010 have since redefaulted,
compared to only 9% of the homeowners that received HAMP modifications in
2013 and 2014.244

147

148

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Servicer Redefault Rates

As of September 30, 2014, of 1,231,165 homeowners’ HAMP permanent
modifications currently serviced by 10 of the largest servicers, 356,676, or 29%,
subsequently redefaulted. Table 4.11 provides data on homeowners’ HAMP
permanent modifications by servicers participating in HAMP and currently
servicing the modifications listed.
TABLE 4.11

HOMEOWNERS’ HAMP PERMANENT MODIFICATIONS AND REDEFAULTS
CURRENTLY WITHIN SERVICERS’ PORTFOLIOS, BY SERVICER, AS OF
9/30/2014

Permanent
Modifications

Permanent
Modifications
Redefaulted

Percentage
of Permanent
Modifications
Redefaulted

Ocwen Loan Servicing, LLCa

284,450

92,019

32%

Wells Fargo Bank, N.A.b

199,784

51,742

26%

JPMorgan Chase Bank, N.A.

187,741

44,784

24%

Nationstar Mortgage LLC

142,927

38,883

27%

Bank of America, N.A.d

105,478

33,890

32%

Select Portfolio Servicing, Inc.

82,207

33,525

41%

Seterus Incorporated

63,051

20,368

32%

Green Tree Servicing LLC

84,825

19,023

22%

CitiMortgage Inc

58,301

15,830

27%

c

U.S. Bank National Association

22,401

6,612

30%

Other

185,540

62,725

34%

Total

1,416,705

419,401

30%

Notes: HAMP include HAMP Tier 1 and Tier 2 modifications, including those that received assistance under the Home Price Decline
Protection (“HPDP”) and Principal Reduction Alternative (“PRA”) programs. Includes both TARP and GSE modifications. Includes
modifications listed by the current servicer of the loan.
a
Ocwen Loan Servicing, LLC includes the former Litton Loan Servicing, LLC, GMAC Mortgage, LLC, and Homeward Residential.
b
Wells Fargo Bank, N.A. includes Wachovia Bank, NA and Wachovia Mortgage, FSB.
c
JPMorgan Chase Bank, N.A. includes EMC Mortgage Corporation.
d
Bank of America includes the former BAC Home Loans Servicing LP, Home Loan Services, and Wilshire Credit Corporation.
Source: Treasury, “HAMP 1MP: Program Volumes - Combined Tier 1/Tier 2: Top 25 HAMP Servicers – September 2014,” accessed
10/21/2014.

As shown in Table 4.11, four servicers account for more than half of these
homeowners’ HAMP permanent modifications that redefaulted: Ocwen Loan
Servicing, LLC, with 92,019 homeowners’ permanent modifications redefaulted;
Wells Fargo Bank, N.A., with 51,742 homeowners’ permanent modifications
redefaulted, JPMorgan Chase Bank, NA, with 44,784 homeowners’ permanent
modifications redefaulted and Nationstar Mortgage LLC with 38,883 homeowners’
permanent modifications redefaulted.245 Of these 10 servicers participating in
HAMP, the three servicers with the highest percentage of homeowners’ HAMP
permanent modifications made that redefaulted were Select Portfolio Servicing,
Inc. with 40.8% of homeowners’ permanent modifications redefaulted; Ocwen
Loan Servicing, LLC, with 32.3% of homeowners’ permanent modifications

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

redefaulted; and Seterus Incorporated, with 32.3% of homeowners’ permanent
modifications redefaulted, as compared with the average for the 10 of 29%.246
Redefaults: Impact on Taxpayers Funding TARP

Taxpayers have lost about $1.4 billion in TARP funds paid to servicers and investors
as incentives for 227,837 homeowners’ non-GSE, HAMP (Tier 1) permanent
mortgage modifications that redefaulted.247 As of September 30, 2014, Treasury
has distributed $7.4 billion in TARP funds for 712,118 homeowners’ non-GSE,
HAMP (Tier 1) permanent modifications.248 According to Treasury, $4.1 billion
of that was designated for investor incentives, $2.0 billion for servicer incentives,
and $1.3 billion for homeowner incentives.249 (Homeowner incentives are paid to
servicers that, in turn, apply the payment to a homeowner’s mortgage). According
to Treasury, 19% of those funds were paid for incentives on homeowners’ HAMP
permanent modifications that later redefaulted.250
Table 4.12 shows payments for homeowners’ HAMP permanent modifications
(active, redefaulted, and paid off mortgages) that are currently within servicers’
portfolios.

149

150

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.12

TARP INCENTIVE PAYMENTS ON HOMEOWNERS’ HAMP PERMANENT MODIFICATIONS CURRENTLY WITHIN
SERVICERS’ PORTFOLIOS, AS OF 9/30/2014
TARP Incentive
Payments for
Permanents
Active

TARP Incentive
Payments for
Permanents
Redefaulted

TARP
Incentive
Payments for
Permanents
Paid Off

Total TARP
Incentive
Payments for
Permanents All

Percentage of Total
TARP Incentive
Payments for
Permanents
Redefaulted

$1,753,536,188

$450,157,760

$20,822,469

$2,224,516,417

20%

395,498,509

190,447,274

4,402,233

590,348,016

32%

Wells Fargo Bank, N.A.d

1,002,499,128

178,903,934

16,863,284

1,198,266,346

15%

JPMorgan Chase Bank,
NAb

1,033,106,756

138,640,606

12,277,090

1,184,024,452

12%

Bank of America, N.A.c

558,990,342

99,587,348

9,140,849

667,718,539

15%

Nationstar Mortgage LLCe

438,924,922

94,786,446

5,025,247

538,736,615

18%

CitiMortgage Inc

Servicer Name
Ocwen Loan Servicing,
LLCa
Select Portfolio Servicing,
Inc.

208,363,187

41,303,637

5,421,511

255,088,335

16%

Specialized Loan Servicing
LLC

54,922,524

30,512,720

855,705

86,290,949

35%

Bayview Loan Servicing
LLC

96,585,864

23,736,854

2,108,106

122,430,824

19%

Carrington Mortgage
Services, LLC.

49,915,350

19,762,912

889,968

70,568,230

28%

363,401,666

122,367,333

14,595,676

500,364,676

24%

$5,955,744,438

$1,390,206,822

$92,402,139

$7,438,353,399

19%

Other
Grand Total

Notes: Total incentive payments by the current status of the permanent modification (active, redefaulted, or paid off) is broken out in the table by the current servicer of the loan.
The incentive payment totals may not tie to the actual amount paid to the servicer as servicing transfers are not taken into account when the current servicer on the loan is used.
Totals shown here exclude payments and/or drafts performed for modifications that are not currently Permanent Modifications. Totals shown here include payments under the
HAMP Tier 1, Home Price Decline Protection (“HPDP”) and Principal Reduction Alternative (“PRA”) programs tied to these loans.
a
Ocwen Loan Servicing, LLC includes the former Litton Loan Servicing, LLC, GMAC Mortgage, LLC, and Homeward Residential.
b
JPMorgan Chase Bank, NA includes EMC Mortgage Corporation.
c
Bank of America N.A. includes the former Countrywide Home Loans Servicing, BAC Home Loans Servicing LP, Home Loan Services, and Wilshire Credit Corporation.
d
Wells Fargo Bank, N.A. includes Wachovia Bank, NA and Wachovia Mortgage, FSB.
e
Nationstar Mortgage LLC includes MorEquity, Inc and the former Aurora Loan Services LLC.
Source: Treasury, response to SIGTARP data call, 10/10/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

As shown in Table 4.12, more than half of TARP funds that Treasury spent for
HAMP permanent modifications that redefaulted were for mortgages currently
serviced by three servicers, Ocwen Loan Servicing, LLC, Wells Fargo Bank, N.A.,
vi
and Select Portfolio Servicing, Inc. (listed in Table 4.12).251, Almost all (91%) of
TARP funds Treasury spent for HAMP permanent modifications that redefaulted
were for mortgages currently serviced by 10 servicers (listed in Table 4.12).252
Redefaults: Impact on States

Homeowners are redefaulting throughout the nation. In most states at least 30%
of homeowners in the HAMP program have redefaulted on their modifications.253
Tables 4.13 – 4.19 and Figure 4.4 show regional and state breakdowns of the
number of homeowners with HAMP permanent modifications, the number
of homeowners with active permanent modifications, the number who have
redefaulted on modifications, and the redefault rates.

vi Total incentive payments by the current status of the permanent modification (active, redefaulted, or paid off) is broken out in the table
by the current servicer of the loan. The incentive payment totals may not tie to the actual amount paid to the servicer as servicing
transfers are not taken into account when the current servicer on the loan is used.

151

152

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.13

REDEFAULTED HOMEOWNERS’ HAMP PERMANENT MODIFICATIONS, BY
REGION, CUMULATIVE AS OF 9/30/2014
Permanent
Modifications

Active
Modifications

Redefaulted
Modifications

Redefault Rate

366,506

268,378

89,569

24%

72,883

47,167

22,762

31%

Southwest/South Central

109,089

68,064

37,080

34%

Midwest

209,590

132,038

71,663

34%

Mid-Atlantic/Northeast

300,614

196,028

97,541

32%

West
Mountain West/Plains

Southeast
Total

286,840

187,998

92,037

32%

1,345,522

899,673

410,652

31%

Notes: Includes GSE and non-GSE modifications. Of HAMP permanent modifications, 35,197 loans have been paid off.
Source: Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed 10/23/2014.

FIGURE 4.4

REDEFAULTED HAMP PERMANENT MODIFICATIONS, BY REGION, CUMULATIVE
AS OF 9/30/2014
AK

MOUNTAIN WEST/
PLAINS
22,762

WA

MT

OR
ID

WEST
89,569
CA

NV

ND

WY

MN

WI

SD

CO

IL

KS

MO

HI
AZ
GU

OK

NM

AR

NY
OH

IN

PA
WV VA

KY

ME

MID-ATLANTIC/
NORTHEAST
97,541

NH
MA
CT RI
NJ
DE
MD
DC

NC

TN
MS AL

TX

VT

MI

IA

NE
UT

MIDWEST
71,663

SC
GA

SOUTHEAST
92,037

LA
FL

PR

SOUTHWEST/
SOUTH CENTRAL
37,080

WEST
MOUNTAIN WEST/PLAINS
SOUTHWEST/SOUTH CENTRAL

MIDWEST
MID-ATLANTIC/NORTHEAST
SOUTHEAST

VI

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

West
TABLE 4.14

REDEFAULTED HAMP PERMANENT MODIFICATIONS, BY STATE, CUMULATIVE AS OF 9/30/2014

WA
AK

OR

GU

Permanent
Modifications

Redefaulted
Modifications

Redefault Rate

AK

642

401

192

30%

CA

317,370

234,867

75,469

24%

GU

CA

Active
Modifications

10

7

2

20%

HI

5,090

3,661

1,259

25%

OR

14,792

10,077

4,195

28%

WA

28,602

19,365

8,452

30%

366,506

268,378

89,569

24%

Total

Notes: Includes GSE and non-GSE modifications, excludes permanent modifications paid off.

HI

Source: Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed
10/23/2014.

WEST

Percentage of Redefaults
on HAMP Permanent
Modifications

>27%
25-27%
<25%

Mountain West/Plains
TABLE 4.15

REDEFAULTED HAMP PERMANENT MODIFICATIONS, BY STATE, CUMULATIVE AS OF 9/30/2014
MT
ID
NV

ND

WY

SD
NE

UT

CO

MOUNTAIN WEST/
PLAINS

Percentage of Redefaults on
HAMP Permanent Modifications

KS
>27%
25-27%
<25%

Permanent
Modifications

Active
Modifications

Redefaulted
Modifications

Redefault Rate

CO

18,005

12,349

4,642

26%

ID

4,954

3,287

1,471

30%

KS

3,383

2,016

1,207

36%

MT

1,505

1,011

400

27%

ND

220

134

63

29%

NE

1,959

1,117

723

37%

NV

30,376

19,074

10,668

35%

SD

491

279

163

33%

UT

11,338

7,506

3,227

28%

WY
Total

652

394

198

30%

72,883

47,167

22,762

31%

Notes: Includes GSE and non-GSE modifications, excludes permanent modifications paid off.
Source: Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed
10/23/2014.

153

154

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Southwest/South Central
TABLE 4.16

REDEFAULTED HAMP PERMANENT MODIFICATIONS, BY STATE, CUMULATIVE AS OF 9/30/2014
Permanent
Modifications
AZ

OK

NM

AR
LA

TX

SOUTHWEST/
SOUTH CENTRAL

>27%
25-27%
<25%

Percentage of Redefaults
on HAMP Permanent
Modifications

Active
Modifications

Redefaulted
Modifications

Redefault Rate

AR

3,133

1,850

1,136

36%

AZ

51,548

32,670

17,209

33%

LA

8,309

4,797

3,251

39%

NM

4,662

3,075

1,434

31%

OK

3,411

1,961

1,279

37%

TX

38,026

23,711

12,771

34%

109,089

68,064

37,080

34%

Total

Notes: Includes GSE and non-GSE modifications, excludes permanent modifications paid off.
Source: Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed
10/23/2014.

Midwest
TABLE 4.17

REDEFAULTED HAMP PERMANENT MODIFICATIONS, BY STATE, CUMULATIVE AS OF 9/30/2014
Permanent
Modifications
MN

WI

MI

IA
IL

IN

MO

MIDWEST

Percentage of Redefaults
on HAMP Permanent
Modifications

OH
KY
>27%
25-27%
<25%

Active
Modifications

Redefaulted
Modifications

Redefault Rate

IA

3,453

1,945

1,316

38%

IL

71,528

46,093

24,221

34%

IN

13,233

7,989

4,781

36%

KY

5,351

3,171

1,964

37%

MI

38,717

25,250

12,136

31%

MN

20,879

13,233

6,930

33%

MO

14,146

8,284

5,363

38%

OH

28,908

18,085

10,014

35%

WI

13,375

7,988

4,938

37%

209,590

132,038

71,663

34%

Total

Notes: Includes GSE and non-GSE modifications, excludes permanent modifications paid off.
Source: Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed
10/23/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Mid-Atlantic/Northeast
TABLE 4.18

REDEFAULTED HAMP PERMANENT MODIFICATIONS, BY STATE, CUMULATIVE AS OF 9/30/2014

ME

VT

NH
MA

NY

CT
NJ
DE
MD
DC

PA
WV VA
WV

MID-ATLANTIC/
NORTHEAST
Percentage of
Redefaults on HAMP
Permanent Modifications

RI

>27%
25-27%
<25%

Permanent
Modifications

Active
Modifications

Redefaulted
Modifications

Redefault Rate

CT

18,467

11,777

6,334

34%

DC

2,345

1,532

722

31%

DE

4,378

2,633

1,650

38%

MA

32,686

21,278

10,478

32%

MD

43,818

28,380

14,467

33%

ME

4,082

2,458

1,477

36%

NH

6,218

3,820

2,171

35%

NJ

47,474

29,747

16,823

35%

NY

69,611

48,780

19,610

28%

PA

30,748

18,628

11,283

37%

RI

6,763

4,302

2,315

34%

VA

30,908

20,762

9,159

30%

VT

1,243

792

391

31%

WV
Total

1,873

1,139

661

35%

300,614

196,028

97,541

32%

Notes: Includes GSE and non-GSE modifications, excludes permanent modifications paid off.
Source: Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed
10/23/2014.

Southeast
TABLE 4.19

REDEFAULTED HAMP PERMANENT MODIFICATIONS, BY STATE, CUMULATIVE AS OF 9/30/2014
Permanent
Modifications
NC

TN
MS

AL

SC
GA

PR
FL

SOUTHEAST

Percentage of
Redefaults on HAMP
Permanent Modifications

VI

>27%
25-27%
<25%

Active
Modifications

Redefaulted
Modifications

Redefault Rate

AL

8,206

4,705

3,213

39%

FL

166,598

113,629

49,724

30%

GA

49,255

31,438

16,649

34%

MS

5,191

2,870

2,164

42%

NC

25,553

15,603

9,053

35%

PR

4,240

3,261

896

21%

SC

13,005

7,967

4,610

35%

TN

14,785

8,518

5,728

39%

7

7

—

0%

286,840

187,998

92,037

32%

VI
Total

Notes: Includes GSE and non-GSE modifications, excludes permanent modifications paid off.
Source: Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed
10/23/2014.

155

156

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

As shown in the preceding tables, only 24% of homeowners in the West Coast
have redefaulted in HAMP, this relatively low redefault rate is driven primarily
by California, where only 24% of homeowners have redefaulted (only Guam,
Puerto Rico, and the Virgin Islands have lower rates of redefault). Conversely,
homeowners in the Midwest and Deep South have fared the worst in HAMP. At
least 31% of participating homeowners in each Midwestern state have redefaulted
on their HAMP modification. In the Deep South, 42% of Mississippi homeowners
participating in HAMP have redefaulted, the highest redefault rate in the nation,
while 39% of homeowners in Louisiana, Alabama, and Tennessee have redefaulted.
California has the highest number of homeowners who redefaulted on HAMP
permanent modifications with 75,469, followed by Florida, Illinois, and New York
with 49,724, 24,221, and 19,610, respectively. Homeowners in each of these states
have redefaulted at rates lower than their regional average, but these states have
significantly more homeowners in HAMP modifications than any others.

Starting a HAMP Tier 1 Modification
Homeowners may request participation in HAMP.254 Homeowners who have
missed two or more payments must be solicited for participation by their
servicers.255 Before offering the homeowner a trial modification, also known as a
trial period plan (“TPP”), the servicer must verify the accuracy of the homeowner’s
income and other eligibility criteria. In order to verify the homeowner’s eligibility
for a modification under the program, homeowners must submit the following
documents as part of an “initial package.”256

For more information on the RMA
form and what constitutes hardship,
see SIGTARP’s April 2011 Quarterly
Report, page 62.
For more information on the
Verification Policy, see SIGTARP’s
April 2011 Quarterly Report, page 63.

• an MHA “request for mortgage assistance” (“RMA”) form, which provides the
servicer with the homeowner’s financial information, including the cause of the
homeowner’s hardship;
• signed and completed requests for Federal tax return transcripts or the most
recent Federal income tax return, including all schedules and forms;
• income verification documentation, such as recent pay stubs or evidence of
other sources of income; and
• Dodd-Frank certification (either as part of the RMA form or as a standalone
document) that the homeowner has not been convicted in the past 10 years of
any of the following in connection with a mortgage or real estate transaction:
felony larceny, theft, fraud, or forgery; money laundering, or tax evasion.
In order for a loan to be eligible for a HAMP modification, the homeowner’s
initial package, consisting of the four documents described above, must be
submitted by the homeowner on or before December 31, 2015. Additionally, in
order to be eligible for incentive payments, the permanent modification must be
effective on or before September 2016.257
Participating servicers verify monthly gross income for the homeowner and the
homeowner’s household, as well as other eligibility criteria.258 Then, in the case of
HAMP Tier 1, the servicer follows the “waterfall” of modification steps prescribed
by HAMP guidelines to calculate the reduction in the homeowner’s monthly

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

mortgage payment needed to achieve a 31% debt-to-income (“DTI”) ratio, that is, a
payment equal to 31% of his or her monthly gross income.259
In the first step of that waterfall, the servicer capitalizes any unpaid interest and
fees (i.e., adds them to the outstanding principal balance). Second, the servicer
reduces the interest rate in incremental steps to as low as 2%. If the 31% DTI ratio
threshold still has not been reached, in the third step the servicer extends the term
of the mortgage to a maximum of 40 years from the modification date. If these
steps are still insufficient to reach the 31% threshold, the servicer may forbear
principal (defer its due date), subject to certain limits.260 The forbearance amount
is not interest bearing and results in a lump-sum payment due upon the earliest
of the sale date of the property, the payoff date of the interest-bearing mortgage
balance, or the maturity date of the mortgage.261
Servicers are not required to forgive principal under HAMP. However, servicers
may forgive principal in order to lower the homeowner’s monthly payment to
achieve the HAMP Tier 1 DTI ratio goal of 31% on a stand-alone basis, at any
point in the HAMP waterfall described above, or as part of PRA.262
After completing these modification calculations, all loans that meet HAMP
eligibility criteria and are either deemed generally to be in imminent default or
delinquent by two or more payments must be evaluated using a standardized net
present value (“NPV”) test that compares the NPV result for a modification to
the NPV result for no modification.263 The NPV test compares the expected cash
flow from a modified loan with the expected cash flow from the same loan with
no modifications to determine which option will be more valuable to the mortgage
investor. A positive NPV test result indicates that a modified loan is more valuable
to the investor than the existing loan. In that case, under HAMP rules, the servicer
must offer the homeowner a mortgage modification. If the test generates a negative
result, modification is optional.264 Servicers cannot refuse to evaluate a homeowner
for a modification simply because the outstanding loan currently has a low loan-tovalue (“LTV”) ratio, meaning the homeowner owes less than the value of the home.
The lower the LTV ratio is, the higher the probability that a foreclosure will be
more profitable to an investor than a modification.
Since September 1, 2011, most of the largest mortgage servicers participating
in MHA have been required to assign a single point of contact to homeowners
potentially eligible for evaluation under HAMP, HAFA, or UP.265 The single point
of contact has the primary responsibility for communicating with the homeowner
about options to avoid foreclosure, his/her status in the process, coordination
of receipt of documents, and coordination with other servicer personnel to
promote compliance with MHA timelines and requirements throughout the entire
delinquency, imminent default resolution process, or foreclosure.266

How HAMP Tier 1 First-Lien Modifications Work
Treasury intended that HAMP trial modifications would last three months.
Historically, many trial modifications have lasted longer. According to Treasury, as
of September 30, 2014, of a combined total of 24,783 active trials under both GSE
and TARP (non-GSE) HAMP, 4,263 (17%) had lasted more than six months.267

Net Present Value (“NPV”) Test:
Compares the money generated by
modifying the terms of the mortgage
with the amount an investor can
reasonably expect to recover in a
foreclosure sale.
Loan-to-Value (“LTV”) Ratio: Lending
risk assessment ratio that mortgage
lenders examine before approving a
mortgage; calculated by dividing the
outstanding amount of the loan by
the value of the collateral backing the
loan. Loans with high LTV ratios are
generally seen as higher risk because
the homeowner has less of an equity
stake in the property.

For more about the HAMP NPV test,
see the June 18, 2012, SIGTARP
audit report “The NPV Test’s Impact
on HAMP.”

157

158

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Homeowners in trial modifications may qualify for conversion to a permanent
modification as long as they make the required modified payments on time and
provide proper documentation, including a signed modification agreement.268
The terms of permanent modifications under HAMP Tier 1 remain fixed for five
years.269 After five years, the loan’s interest rate can increase if the modified interest
rate had been reduced below the 30-year conforming fixed interest rate on the date
of the initial modification. The interest rate can rise incrementally by up to 1%
per year until it reaches that rate.270 Otherwise, the modified interest rate remains
permanent.
If the homeowner misses a payment during the trial or is denied a permanent
modification for any other reason, the homeowner is, in effect, left with the original
terms of the mortgage. The homeowner is responsible for the difference between
the original mortgage payment amount and the reduced trial payments that were
made during the trial. In addition, the homeowner may be liable for late fees that
were generated during the trial. In other words, a homeowner can be assessed late
fees for failing to make the original pre-modification scheduled payments during
the trial period, even though under the trial modification the homeowner is not
required to make these payments. Late fees are waived only for homeowners who
receive a permanent modification.271
What Happens When a HAMP Modification Is Denied: Servicer Obligations and
Homeowner Rights

For more information on HAMP
servicer obligations and homeowner
rights, see SIGTARP’s April 2011
Quarterly Report, pages 67-76.

Treasury has issued guidance governing both the obligations of servicers and the
rights of homeowners in connection with the denial of loan modification requests.
Homeowners must receive a Non-Approval Notice if they are rejected for a HAMP
modification. A homeowner who is not approved for HAMP Tier 1 is automatically
considered for HAMP Tier 2. If the servicer offers the homeowner a HAMP Tier 2
trial, no Non-Approval Notice would be issued on the HAMP Tier 1. The NonApproval Notice is sent only if the HAMP Tier 2 is not offered. Homeowners can
request reconsideration or re-evaluation if they believe one or more NPV analysis
inputs is incorrect or if they experience a change in circumstance. Servicers
are obligated to have written procedures and personnel in place to respond to
homeowner inquiries and disputes that constitute “escalated cases” in a timely
manner.272
Treasury’s web-based NPV calculator at www.CheckMyNPV.com can be used
by homeowners prior to applying for a HAMP modification or after a denial of
a HAMP modification. Homeowners can enter the NPV input values listed in
the HAMP Non-Approval Notice received from their servicer, or substitute with
estimated NPV input values, to compare the estimated outcome provided by
CheckMyNPV.com against that on the Non-Approval Notice.
Modification Incentives

For new HAMP trials on or after October 1, 2011, Treasury changed the onetime flat $1,000 incentive payment to a sliding scale based on the length of time
the loan was delinquent as of the effective date of the TPP. For loans less than

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

or equal to 120 days delinquent, servicers receive $1,600.273 For loans 121210 days delinquent, servicers receive $1,200. For loans more than 210 days
delinquent, servicers receive only $400. Starting on March 1, 2014, each of these
incentive payments for servicers increased by $400.274 For homeowners whose
monthly mortgage payment was reduced through HAMP by 6% or more, servicers
also receive incentive payments of up to $1,000 annually for three years if the
homeowner remains in good standing (defined as less than three full monthly
payments delinquent).275
For HAMP Tier 1, homeowners whose monthly mortgage payment is reduced
through HAMP by 6% or more and who make monthly payments on time earn
an annual principal reduction of up to $1,000.276 The principal reduction accrues
monthly and is payable for each of the first five years as long as the homeowner
remains in good standing.277 Under both HAMP Tier 1 and HAMP Tier 2, the
investor is entitled to five years of incentives that make up part of the difference
between the homeowner’s new monthly payment and the old one.
As of September 30, 2014, of the $29.8 billion in TARP funds allocated to the
81 servicers participating in MHA, 91% was allocated to 10 servicers.278 Table 4.20
shows incentive payments made to these servicers.

159

160

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.20

TARP INCENTIVE PAYMENTS BY 10 SERVICERS, AS OF 9/30/2014

SPA Cap Limit

Incentive
Payments
to Borrowers

Incentive
Payments
to Investors

Incentive
Payments
to Servicers

Total Incentive
Payments

$6,449,003,040

$361,632,249

$1,184,283,799

$525,163,403

$2,071,079,451

JPMorgan Chase
Bank, NAb

3,308,473,562

349,333,828

970,007,469

451,609,864

1,770,951,160

Bank of America,
N.A.c

7,006,911,111

347,302,247

732,027,727

421,962,736

1,501,292,710

Wells Fargo Bank,
N.A.d

5,057,709,156

299,165,366

791,029,251

403,052,731

1,493,247,348

880,029,481

81,305,250

272,839,921

120,662,342

474,807,513

Select Portfolio
Servicing, Inc.

1,382,303,176

105,559,658

217,829,881

134,755,514

458,145,053

Nationstar
Mortgage LLCe

1,290,730,226

81,595,315

222,110,725

119,386,185

423,092,225

OneWest Bank

Ocwen Loan
Servicing, LLCa

CitiMortgage Inc

1,491,371,108

62,987,761

215,382,905

87,380,184

365,750,850

Saxon Mortgage
Services Inc

100,807,086

19,655,075

41,738,413

39,413,598

100,807,086

U.S. Bank National
Association

180,713,453

16,585,714

36,992,858

26,046,129

79,624,702

$27,148,051,398

$1,725,122,463

$4,684,242,949

$2,329,432,687

$8,738,798,098

Total

Notes: Numbers may not total due to rounding. On July 1, 2012, Saxon Mortgage Services, Inc. ceased servicing operations by selling its mortgage servicing rights and
transferring the subservicing relationships to third-party servicers. The remaining SPA Cap Limit stated above represents the amount previously paid to Saxon Mortgage
Services, Inc. prior to ceasing servicing operations.
a
Ocwen Loan Servicing, LLC includes the former Litton Loan Servicing, LLC, GMAC Mortgage, LLC, and Homeward Residential.
b
JPMorgan Chase Bank, NA includes EMC Mortgage Corporation.
c
Bank of America N.A. includes the former Countrywide Home Loans Servicing, BAC Home Loans Servicing LP, Home Loan Services, and Wilshire Credit Corporation.
d
Wells Fargo Bank, N.A. includes Wachovia Bank, NA and Wachovia Mortgage, FSB.
e
Nationstar Mortgage LLC includes MorEquity, Inc and the former Aurora Loan Services LLC.
Source: Treasury, Transactions Report-Housing Programs, 9/29/2014.

As shown in Table 4.20, Ocwen Loan Servicing, LLC, received $2,071,079,451
in total incentive payments, the most of any servicer. The four largest HAMP
servicers (Ocwen Loan Servicing, LLC; JPMorgan Chase Bank, NA; Bank of
America, N.A.; and Wells Fargo Bank, N.A.) received 78% of all incentives paid
out. Only 17% of the incentives paid to Ocwen Loan Servicing, LLC went to
homeowners, least among the four largest servicers. Conversely, 23% of incentives
paid to Bank of America, N.A. went to homeowners, the highest among the four
largest servicers. Of the $8.7 billion in total incentives paid to all servicers, 20%
went to homeowners, 54% went to investors, and the remaining 27% went to the
servicers.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

HAMP Tier 2
Effective June 1, 2012, HAMP Tier 2 expanded HAMP.279 As in HAMP Tier 1,
HAMP Tier 2 permits HAMP modifications on mortgages of owner-occupied
properties, but unlike HAMP Tier 1, HAMP Tier 2 also permits HAMP
modifications on mortgages of non-owner-occupied “rental” properties that are
tenant-occupied or vacant.280 Under the original HAMP (now HAMP Tier 1),
mortgage modifications for “rental” properties had been expressly excluded; HAMP
Tier 2 also allows homeowners with a wider range of debt-to-income situations to
receive modifications.281 Treasury’s stated policy objectives for HAMP Tier 2 are
that it “will provide critical relief to both renters and those who rent their homes,
while further stabilizing communities from the blight of vacant and foreclosed
properties.”282 A homeowner may have up to five loans with HAMP Tier 2
modifications, as well as a single HAMP Tier 1 modification on the mortgage for
his or her primary residence.283 If a homeowner loses “good standing” on a HAMP
Tier 1 modification and it has either been at least one year since the effective date
of that modification or there has been a “change in circumstance,” he or she is
eligible for a HAMP Tier 2 remodification.284 Approximately 8,081 of homeowners
in active HAMP Tier 2 permanent modifications were previously in HAMP Tier 1
permanent modifications.285
According to Treasury, as of September 30, 2014, a total of 61 of the 81
servicers with active MHA servicer agreements had fully implemented HAMP Tier
2.286 The remaining 20 of those servicers will not implement HAMP Tier 2 because
they are in the process of terminating their servicer participation agreement, they
have gone out of business, their servicer participation agreement was signed to
participate only in FHA-HAMP, RD-HAMP, or FHA-2LP, or they are winding
down their non-GSE servicing operations.287 All 10 of the largest servicers have
reported that they had implemented HAMP Tier 2.288 According to Treasury, as of
September 30, 2014, it had paid $212.2 million in incentives in connection with
71,183 HAMP Tier 2 permanent modifications, 61,975 of which remain active.289
HAMP Tier 2 mortgage modification activity and property occupancy status is
shown in Table 4.21.

For SIGTARP’s recommendations for
the improvement of HAMP Tier 2,
see SIGTARP’s April 2012 Quarterly
Report, pages 185-189.

161

162

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.21

HAMP TIER 2 FIRST LIEN MODIFICATION ACTIVITY AND OCCUPANCY STATUS,
AS OF 9/30/2014

Property Type
Borrower
Occupied
Tenant Occupied
Vacant
Total

Trials
Started

Trials
Cancelled

Trials
Active

Trials
Converted
Permanent

Permanents
Disqualified

Permanents
Paid-Off

Permanents
Active

88,313

5,817

15,728

66,768

8,240

426

58,102

5,035

325

774

3,936

452

31

3,453

638

51

108

479

57

2

420

93,986

6,193

16,610

71,183

8,749

459

61,975

Source: “Treasury, “HAMP 1MP Program Volumes – Tier 2 Property Type – September 2014,” accessed 10/21/2014.

As shown in Table 4.21, of the 93,986 HAMP Tier 2 trial mortgage
modifications started, 88,313 (94%), were for owner-occupied properties;
5,035 (6%), were for tenant-occupied properties, and 638 (1%) were for vacant
properties.290 Of owner-occupied properties that received a HAMP Tier 2 trial
modification, 15,728 trial modifications (18%) were active and 66,768 (76%) were
converted to permanent modifications, of which 58,102 (87%) were active.291 Of
owner-occupied properties that received a HAMP Tier 2 trial modification, 5,817
(7%) were cancelled, and of those that received a permanent modification, 8,240
(12%) redefaulted.292 Around 84% of tenant-occupied properties that received
either a trial or permanent HAMP Tier 2 mortgage modification have remained
active, as of September 30, 2014.293 Of vacant properties that received a HAMP
Tier 2 trial modification, 108 (17%) were in active trial modifications, 420
(66%) were in active permanent modifications, and 108 (17%) had their trial or
permanent modification cancelled.294
HAMP Tier 2 Eligibility

HAMP Tier 2 expands the eligibility criteria related to a homeowner’s debt-toincome ratio and also allows modifications on loans secured by “rental” properties.
Owner-occupied loans that are ineligible for a HAMP Tier 1 modification due to
excessive forbearance or negative NPV also may be eligible for Tier 2. Vacant rental
properties are permitted in the program, as are those occupied by legal dependents,
parents, or grandparents, even if no rent is charged. The program is not, however,
according to Treasury, intended for vacation homes, second homes, or properties
that are rented only seasonally. Additionally, loans on rental properties must be at
least two payments delinquent – those in imminent default are not eligible.295
However, Treasury does not require that the property be rented. Treasury
requires only that a homeowner certify intent to rent the property to a tenant on a
year-round basis for at least five years, or make “reasonable efforts” to do so; and
does not intend to use the property as a second residence for at least five years.296
According to Treasury, servicers are not typically required to obtain third-party
verifications of the homeowner’s rental property certification when evaluating a
homeowner for HAMP.297

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

To be considered for HAMP Tier 2, homeowners must satisfy several basic
HAMP requirements: the loan origination date must be on or before January
1, 2009; the homeowner must have a documented hardship; the property must
conform to the MHA definition of a “single-family residence” (1-4 dwelling units,
including condominiums, co-ops, and manufactured housing); the property must
not be condemned; and the loan must fall within HAMP’s unpaid principal balance
limitations.298 If a homeowner satisfies these requirements, and in addition, the
loan has never been previously modified under HAMP (except for the exceptions
discussed above), the servicer is required to solicit the homeowner for HAMP Tier
2. In certain other cases, the homeowner may still be eligible for HAMP Tier 2, but
the servicer is not required to solicit the homeowner.299
How HAMP Tier 2 Modifications Work

As with HAMP Tier 1, HAMP Tier 2 evaluates homeowners using an NPV test
that considers the value of the loan to the investor before and after a modification.
Owner-occupant homeowners are evaluated for both HAMP Tier 1 and Tier 2 in
a single process. If a homeowner is eligible for both modifications, he or she will
receive a HAMP Tier 1 modification.300
As discussed above, HAMP Tier 1 modifications are structured using a waterfall
of incremental steps that may stop as soon as the 31% post-modification DTI ratio
target is reached. In HAMP Tier 2, the proposed permanent modification must
meet two affordability requirements: (1) a post-modification DTI ratio of not less
than 25% or greater than 42% and (2) the modified principal and interest payment
under HAMP Tier 2 must not be greater than the premodification principal and
interest payment in effect at the time of HAMP Tier 2 consideration. The postmodification DTI ratio range increased in February 2013 to not less than 10% or
greater than 55%. If the homeowner was previously in a HAMP Tier 1 modification
(either trial or permanent), then the new payment must be at least 10% below the
previously modified payment. Because HAMP Tier 2 does not target a specific
DTI ratio, the HAMP Tier 2 waterfall is not a series of incremental steps, but a
consistent set of actions that are applied to the loan. After these actions are applied,
if the result of the NPV test is positive and the modification also achieves the DTI
and payment reduction goals, the servicer must offer the homeowner a HAMP Tier
2 modification. If the result of the HAMP Tier 2 NPV test is negative, modification
is optional.301
As in the HAMP Tier 1 waterfall, the first step in structuring a HAMP Tier 2
modification is to capitalize any unpaid interest and fees. The second step changes
the interest rate to the “Tier 2 rate,” which is the 30-year conforming fixed interest
rate on the date of the initial modification. The third step extends the term of the
loan by up to 40 years from the modification effective date. Finally, if the loan’s
pre-modification mark-to-market LTV ratio is greater than 115%, the servicer
forbears principal in an amount equal to the lesser of (1) an amount that would
create a post-modification LTV ratio of 115%, or (2) an amount equal to 30% of
the post-modification principal balance. Unlike HAMP Tier 1, there is no excessive
forbearance limit in HAMP Tier 2. The HAMP Tier 2 guidelines also include

163

164

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

several exceptions to this waterfall to allow for investor restrictions on certain types
of modifications.302
The HAMP Tier 2 NPV model also evaluates the loan using an “alternative
modification waterfall” in addition to the one described here. This waterfall uses
principal reduction instead of forbearance. However, as in HAMP Tier 1, principal
reduction is optional. Servicers may also reduce principal on HAMP Tier 2
modifications using PRA.303
HAMP Tier 2 incentives are the same as those for HAMP Tier 1, with some
exceptions, notably that HAMP Tier 2 modifications do not pay annual homeowner
or servicer incentives.304

MHA Outreach and Borrower Intake Project
On February 14, 2013, Treasury entered into an agreement with the Neighborhood
Reinvestment Corporation, also called NeighborWorks America (“NeighborWorks”),
to launch a nationwide MHA initiative with housing counselors “in an effort to
increase the number of homeowners that successfully request assistance under
MHA.”305 NeighborWorks is a Congressionally chartered corporation that through
a national network of non-profit organizations administers housing programs,
including housing counseling.306 The initiative, called the MHA Outreach and
Borrower Intake Project, will pay $450 to housing counseling agencies for each
homeowner they worked with to submit complete applications for HAMP to
servicers.307 Treasury allocated $18.3 million in TARP funds for the project.308 As
of September 30, 2014, housing counselors have initiated HAMP application work
for 12,491 homeowners, of whom 3,801 have had their completed applications
submitted to an MHA servicer and accepted by that MHA servicer, whether or
not the homeowner eventually receives a mortgage modification.309 According
to Treasury, housing counseling agencies are due $1,710,450 for those accepted
applications.310 NeighborWorks has, as of September 30, 2014, requested $6.5
million in total funds, mostly for outreach, oversight, and administration, as well as
for the counseling agency payments. Of the $6.5 million in total funds committed
to this program only 23 percent of the committed funds are used for agency
counseling payments. The remaining 77 percent are designated for administration,
marketing and outreach.311

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.22

FIGURE 4.5

MHA OUTREACH AND BORROWER INTAKE
PROJECT, AS OF 9/30/2014
Agency Counseling Fees

$1,503,000

MHA OUTREACH AND
BORROWER INTAKE PROJECT,
AS OF 9/30/2014

Administrative Expenses
Intermediary Oversight Fees

$258,104

Administration (NWA)

1,330,844

Quality Control & Compliance

209,545

Technology Build

470,069

Counselor Training

251,048

Outreach Expenses
Agency Outreach Fees
Supplemental Outreach Fees

$1,618,469
493,513

Virtual Outreach Events
Traditional Outreach Events
Total Expenses

59,168
269,283
$6,463,043

Source: Treasury, Response to SIGTARP Data Call, 10/6/2014.

23%
77%

Administration, Marketing, and
Outreach Fees
Agency Counseling Fees
Note: Administrative Expenses includes
intermediary oversight fees, agency outreach
fees, supplemental outreach fees, administration
(nwa), quality control & compliance, technology
build, and counselor training.
Source: Treasury, response to SIGTARP data call,
10/6/2014.

Additional TARP-Funded MHA Housing Support Programs
From April 2009 until September 2010, Treasury announced a number of
additional MHA support programs for homeowners with non-GSE mortgages.
TARP funds have been allocated to most but not all of these additional programs.
Three of these programs fall under the umbrella of the HAMP program: the Home
Price Decline Protection (“HPDP”) program, the Home Affordable Unemployment
Program (“UP”), and the Principal Reduction Alternative (“PRA”). The remaining
additional MHA programs include collaborations with other Federal agencies,
programs that aim to extinguish homeowners’ second mortgages (second liens), and
programs that offer alternatives to foreclosure. Table 4.23 provides more detail on
these programs.

For more information on these
additional housing programs, see
SIGTARP’s October 2013 Quarterly
Report, pages 93-99.

165

166

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.23

ADDITIONAL MAKING HOME AFFORDABLE (“MHA”) HOUSING SUPPORT PROGRAMS, AS OF 9/30/2014

Program
Principal
Reduction
Alternative
(“PRA”)b

Home Price
Decline
Protection
(“HPDP”)b

Home
Affordable
Unemployment
Program (“UP”)b

Home
Affordable
Foreclosure
Alternatives
(“HAFA”)

Second Lien
Modification
Program
(“2MP”)

Treasury/
Federal Housing
AdministrationHome
Affordable
Modification
Program
(“Treasury/FHAHAMP”)

Date
Announced

Date
Started

Purpose

Homeowners Assistedm
Estimated Number
of Homeowners to be Permanents Permanents
Assisted
Started
Active

Estimated
TARP
Allocation
(In Billions)a

TARP
Expenditures
(In Billions)

6/3/2010

To provide incentives
to investors to
modify homeowners’
10/1/2010
mortgages under HAMP
by reducing the principal
amount owed.

—

161,440c

129,489c

$2.00

$1.0

7/31/2009

To provide additional
TARP-funded incentives
to investors to modify
mortgages through
9/1/2009
HAMP by partially
offsetting possible
losses from home price
declines.

—

218,933c

145,406c

1.55

0.37

7/1/2010e

To temporarily -- fully
or partially -- suspend
mortgage payments
for unemployed
homeowners.

—

41,213

4,342f

—g

—g

4/5/2010h

To provide TARPfunded incentives to
servicers, investors,
and homeowners to
complete short sales
and deeds-in-lieu to
avoid foreclosure and
relocate homeowners
unable to sustain a
modified mortgage.

—

176,373

—

4.15

0.85

To provide incentives
to servicers, investors,
and borrowers to
modify second
mortgages (second
liens) -- with a partial
8/13/2009 or full extinguishment
of the loan balance
-- for homeowners with
a corresponding first
mortgage (first lien)
that was modified under
HAMP.

“A Second Lien Program
to Reach up to 1 to 1.5
Million Homeowners,”
according to Treasury,
“Making Home
Affordable, Program
Update, Fact Sheet,”
4/28/2009.

141,428

84,053

0.13

0.66

To provide TARP-funded,
HAMP-like incentives
to servicers and
8/15/2009
homeowners to modify
mortgages insured by
the FHA.

“Tens of thousands
of FHA borrowers will
now be able to modify
their mortgages in the
same manner as so
many others who are
taking advantage of
the Administration’s
Making Home Affordable
program,” according to
HUD Secretary Shaun
Donovan, HUD Press
Release, “HUD Secretary
Donovan Announces
New FHA-Making
Home Affordable Loan
Modification Guidelines,”
7/30/2009.

55,131

43,986

0.23

0.10

3/26/2010d

11/30/2009

4/28/2009

7/30/2009i

Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

167

ADDITIONAL TARP-FUNDED MAKING HOME AFFORDABLE (“MHA”) HOUSING SUPPORT PROGRAMS,
AS OF 9/30/2014 (CONTINUED)

Program
Department
of Agriculture
Rural
DevelopmentHome
Affordable
Modification
Program (“RDHAMP”)
Treasury/
Federal Housing
Administration
Second Lien
Program
(“Treasury/FHA2LP”) l
Department
of Veterans
Affairs-Home
Affordable
Modification
Program (“VA
HAMP”)

Date
Announced

Date
Started

Purpose

Homeowners Assistedm
Estimated Number
of Homeowners to be Permanents Permanents
Assisted
Started
Active

Estimated
TARP
Allocation
(In Billions)a

TARP
Expenditures
(In Billions)

9/17/2010i

To provide TARP-funded,
HAMP-like incentives to
servicers and borrowers
9/24/2010
for modifications of
mortgages insured by
RD.

—

172

134

0.02

—j

3/26/2010i

To provide TARP-funded
incentives to servicers
and investors to partially
or fully extinguish
8/6/2010
second mortgages
(second liens) for
mortgages modified and
insured by the FHA.

—

0

0

2.69

0.00

To provide non-TARPfunded, HAMP-like
incentives to servicers
2/1/2010 and borrowers for
modifications of
mortgages insured by
the VA.

—

514

381

—k

—k

1/8/2010i

Notes:
a
Estimated TARP allocations are as of January 5, 2012.
b
Program is a subprogram of the Home Affordable Modification Program (“HAMP”).
c
Includes HAMP Tier 1 and Tier 2 modifications.
d
In a 3/26/2010 press release, Treasury announced the concept of what was later named the “UP” program in Treasury’s May 11, 2010 Supplemental Directive.
e
Treasury announced that servicers could implement UP before July 1, 2010.
f
As of 8/31/2014, 4,544 homeowners who received UP assistance subsequently received HAMP modifications.
g
Treasury does not allocate TARP funds to UP.
h
Treasury announced that some servicers could implement HAFA before April 5, 2010.
i
In its April 6, 2009 Supplemental Directive, Treasury announced that “Mortgage loans insured, guaranteed or held by a Federal Government agency (e.g., FHA, HUD, VA and Rural Development) may be eligible for the
HAMP, subject to guidance issued by the relevant agency. Further details regarding inclusion of these loans in the HAMP will be provided in a subsequent Supplemental Directive.”
j
As of September 30, 2014, $268,926 has been expended for RD-HAMP.
k
Treasury does not provide incentive compensation related to VA-HAMP.
l
As of December 31, 2013, the FHA2LP program had expired.
m
Number of homeowners assisted via PRA, HPDP, and UP presented as of 8/31/2014, the most recent data provided by Treasury.
Sources: Treasury, responses to SIGTARP data calls, 1/5/2012, 1/8/2014, 1/24/2014, 4/9/2014, 4/25/2014, 7/8/2014, 7/24/2014, 10/6/2014, and 10/10/2014; Treasury, “Home Affordable Unemployment
Program NON GSE Forbearance Plans Worksheet – August 2014,” accessed 10/21/2014; Treasury, “HAFA Program Inventory – Program Type – September 2014,“ accessed 10/23/2014; Treasury, “2MP
Program Inventory – Program Type by Payor – September 2014,“ accessed 10/23/2014; Treasury, “FHA & RD HAMP Trial Starts – Program Summary – September 2014,” accessed 10/23/2014; VA, responses
to SIGTARP data calls, 1/8/2014, 4/3/2014, 7/7/2014 and 10/23/2014; Treasury, Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.34, 93/163/20132014; Treasury,
press releases, 4/28/2013, 7/31/2009, 11/30/2009, and 3/26/2010; Treasury, “Supplemental Directive 09-01: Introduction of the Home Affordable Modification Program,” 4/6/2009; Treasury, “Supplemental
Directive 09-04: Home Affordable Modification Program -- Home Price Decline Protection Incentives,” 7/31/2009; Treasury, “Supplemental Directive 09-09: Introduction of Home Affordable Foreclosure Alternatives
-- Short Sale and Deed in Lieu of Foreclosure,” 11/30/2009; Treasury, “Supplemental Directive 09-09 Revised: Introduction of Home Affordable Foreclosure Alternatives -- Short Sale and Deed in Lieu of Foreclosure
Update,” 3/26/2010; Treasury, “Supplemental Directive 09-05 Revised: Update to the Second Lien Modification Program (2MP),” 3/26/2010; Treasury, “Fact Sheet: FHA Program Adjustments to Support Refinancings
for Underwater Homeowners,” 3/26/2010; Treasury, “HAMP Improvements Fact Sheet: Making Home Affordable Program Enhancements to Offer More Help for Homeowners,” 3/26/2010; Treasury, “Supplemental
Directive 10-04: Home Affordable Unemployment Program,” 5/11/2010; Treasury, “Supplemental Directive 10-05: Home Affordable Modification Program - Modification of Loans with Principal Reduction Alternative,”
6/3/2010; Treasury, Supplemental Directive 10-10: Home Affordable Modification Program – Modifications of Loans Guaranteed by the Rural Housing Service,” 9/17/2010; HUD, press release, 7/30/2009; VA,
Circular 26-10-2, 1/8/2010; and VA, Circular 26-10-6, 5/24/2010.

168

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Housing Finance Agency Hardest Hit Fund (“HHF”)
More than four years ago, in February 2010, in an attempt to help families in
places hurt the most by the housing crisis, the Administration launched the TARPfunded Housing Finance Agency Innovation Fund for the Hardest Hit Housing
Markets (“Hardest Hit Fund” or “HHF”).312 The Administration announced that
TARP funds would be used for “innovative measures to help families in the states
that have been hit the hardest by the aftermath of the housing bubble.”313 This
TARP-funded housing support program was to be developed and administered by
vii
state housing finance agencies (“HFAs”) with Treasury’s approval and oversight.314,
Treasury allocated $7.6 billion in TARP funds for the HHF program and,
through four rounds of funding in 2010, obligated these TARP funds to 18 states
and the District of Columbia (“states”) – those states that Treasury deemed to have
significant home price declines and high unemployment rates.315 Treasury approved
each of the 19 states’ initial program proposals and approves any proposed changes
to programs.316 These proposals include estimates of the number of homeowners to
be helped through each program (some states have more than one program).317
The first round of HHF allocated $1.5 billion of the amount initially allocated
for MHA initiatives. According to Treasury, these funds were designated for five
states where the average home price had decreased more than 20% from its peak.
The five states were Arizona, California, Florida, Michigan, and Nevada.318 Plans to
use these funds were approved by Treasury on June 23, 2010.319
On March 29, 2010, Treasury expanded HHF to include five additional states
and increased the program’s potential funding by $600 million, bringing total
funding to $2.1 billion. The additional $600 million was designated for North
Carolina, Ohio, Oregon, Rhode Island, and South Carolina. Treasury indicated that
these states were selected because of their high concentrations of people living in
economically distressed areas, defined as counties in which the unemployment rate
exceeded 12%, on average, in 2009.320 Plans to use these funds were approved by
Treasury on August 3, 2010.321
On August 11, 2010, Treasury pledged a third round of HHF funding of $2
billion to states with unemployment rates at or above the national average.322
The states designated to receive funding were Alabama, California, Florida,
Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey,
North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and
Washington, DC.323 Treasury approved third round proposals on September 23,
2010.324 On September 29, 2010, a fourth round of HHF funding of an additional
$3.5 billion was made available to existing HHF participants.325
Treasury allocated the $7.6 billion in TARP funds to 18 states and the District
of Columbia and has over time approved HHF programs in several categories:326

vii Participating HFAs in HHF are from: Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi,

Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee, and Washington, DC. As of September
30, 2014, there were 73 active HHF programs run by the 19 state HFAs. According to Treasury, seven states: Illinois, New Jersey,
Rhode Island, Washington, DC, Ohio, Tennessee and Oregon are no longer accepting applications for assistance from homeowners
because they determined that their allocated HHF funds would be spent on homeowners who already have been approved for HHF
assistance.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

•
•
•
•
•

Unemployment assistance, including past-due payment assistance
Mortgage modification, including principal reduction assistance
Second-lien reduction assistance
Transition assistance, including short sale and deed-in-lieu of foreclosure
Demolition

According to Treasury, states can reallocate funds between programs and modify
existing programs as needed, with Treasury approval, until December 31, 2017.327
According to Treasury, between June 30, 2014 and September 30, 2014, six states
have reallocated funds, modified or eliminated existing programs, or established
new HHF programs with Treasury approval, increasing the total number of HHF
programs in 18 states and Washington, DC, as of September 30, 2014, to 73,
up from 70 programs as of June 30, 2014.328 According to Treasury, the six states
that made changes to their programs between June 30, 2014 and September 30,
2014 include Indiana, South Carolina, Washington, DC, Florida, Alabama and
California. The District of Columbia added a Tax Lien Extinguishment component
to its HomeSaver program. Florida extended the period during which loans sold
in a HUD Distressed Asset Program may be eligible for assistance under its
Modification-Enabling Pilot Program. Indiana clarified military-related eligible
hardships under its Unemployment Bridge, Recast Modification and Transition
Assistance Programs, among other changes. California added a Reverse Mortgage
Assistance Program, with an allocation of $25 million.329
As of September 30, 2014, two additional states added blight elimination
programs: Alabama and South Carolina. South Carolina introduced a new
Neighborhood Initiative Program, providing up to $35,000 per property for the
removal, greening, and maintenance of vacant, abandoned and blighted properties,
allocating $35 million for the overall blight elimination program.330

States’ TARP Allocations and Spending for HHF
Of the $7.6 billion in TARP funds available for HHF, states collectively had drawn
down $4.5 billion (59%) as of September 30, 2014.331 As of June 30, 2014, the
latest date for which spending analysis is available, states had drawn down $4.2
billion (55%).332 However, not all of that has been spent on direct assistance to
homeowners. States have spent $3.1 billion (41% of the $7.6 billion) to assist
193,716 individual homeowners. States have spent the rest of the funds on
administrative expenses or hold the money as cash-on-hand. States have spent
$432.5 million (6%) on administrative expenses; and held $644.4 million (8%) as
viii
unspent cash-on-hand, as of June 30, 2014, the latest data available.333, There
remains $3.4 billion (45%) in undrawn funds available for HHF, as of June 30,
2014.334
As of June 30, 2014, the latest data available, in aggregate, after more than
three and a half years, states had spent 41% ($3.1 billion) of the $7.6 billion in
viii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursements to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

For more information on HHF,
see: SIGTARP’s April 12, 2012,
audit report, “Factors Affecting
Implementation of the Hardest Hit
Fund Program,” SIGTARP’s October
2013 Quarterly Report, pages 189255, SIGTARP’s January 2014
Quarterly Report, pages 97-154, and
SIGTARP’s April 2014 Quarterly
Report, pages 97-156.

169

170

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TARP funds that Treasury allocated for the HHF program to provide assistance
ix
to 223,327 program participants (which translates to 193,716 individual
homeowners), or 41% of the number of homeowners the states anticipated helping
x
with HHF in 2011.335,
As of June 30, 2014, 80.9% of the HHF assistance received by homeowners
was for unemployment assistance, including past-due payment assistance.336 As
SIGTARP found in its April 2012 audit, these were the only types of assistance
for which the Government-sponsored enterprises (“GSE”s) previously directed
servicers to participate. The remaining assistance can be broken down to 18.5% for
mortgage modification, including principal reduction assistance, 0.4% for secondlien reduction assistance, and 0.2% for transition assistance.337 As of June 30, 2014,
Michigan, Ohio, and Indiana are the only states to report activity under their blight
elimination programs, with the removing and greening of 329 properties. Michigan
has spent $3,283,453 in removing and greening 315 properties, while Ohio spent
$130,100 removing and greening 14 properties.338
Figure 4.6 shows state uses of TARP funds obligated for HHF by percent, as of
June 30, 2014, the most recent figures available.

ix D
 ata was incomplete at date of publication, as Nevada’s data for Program Participation, which are not included in this number, were

not yet available.
x According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.6

STATE USES OF $7.6 BILLION OF TARP FUNDS AVAILABLE
FOR HHF, BY PERCENT, AS OF 6/30/2014
Alabama
$162.5 million
allocated
Arizona
$267.8 million
allocated
California
$1,975.3 million
allocated
Florida
$1,057.8 million
allocated
Georgia
$339.3 million
allocated
Illinois
$445.6 million
allocated
Indiana
$221.7 million
allocated
Kentucky
$148.9 million
allocated
Michigan
$498.6 million
allocated
Mississippi
$101.9 million
allocated
Nevada
$194.0 million
allocated
New Jersey
$300.5 million
allocated
North Carolina
$482.8 million
allocated
Ohio
$570.4 million
allocated
Oregon
$220.0 million
allocated
Rhode Island
$79.4 million
allocated
South Carolina
$295.4 million
allocated
Tennessee
$217.3 million
allocated
Washington D.C.
$20.7 million
allocated
TOTAL
$7.6 billion
0

20

40

Homeowner Assistance

Cash-on-Hand

Administrative Expenses

Undrawn Funds

60

80

Notes: According to Treasury, committed program funds are funds committed to homeowners who have been approved to
participate in HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when
and how they capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously
as homeowner assistance, cash-on-hand, or undrawn funds. Figures obtained from each state’s Quarterly Financial Report,
which reconciles each type of cash disbursements to funds drawn from Treasury. As such, all expenses are based on actual
cash disbursements. Additionally, cash-on-hand may include lien recoveries and borrower remittances. State spending figures
as of June 30, 2014, are the most recent available; Treasury has separately published September 30, 2014, figures for
amounts drawn down; as of September 30, 2014, states have drawn down $4.5 billion.
Sources: Treasury, Transactions Report-Housing Programs, 6/26/2014; Treasury, responses to SIGTARP data calls,
7/5/2013, 10/3/2013, 10/7/2013, 10/17/2013, 1/17/2014, 1/22/2014, 1/23/2014, 4/9/2014, 7/8/2014, and
10/6/2014.

100

171

172

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

State Estimates of Homeowner Participation in HHF
According to Treasury, as of June 30, 2014, states had spent $3.1 billion to help
193,716 homeowners; in the quarter ended June 30, 2014, states had spent
$362.5 million to help 14,919 homeowners.339 Each state estimates the number
of homeowners to be helped in its programs. In the beginning of 2011, states
collectively estimated that they would help 546,562 homeowners with HHF.340
Since then, with Treasury’s approval, states have changed their programs (including
reducing the estimated number of homeowners to be helped), cancelled programs,
and started new programs.341 As of June 30, 2014, the states estimated helping
301,702 homeowners with HHF, which is 244,860 fewer homeowners than the
states estimated helping with HHF in 2011, a reduction of 45%.
Importantly, the states collectively estimate that HHF will help 301,702
homeowners but fail to take into account that when states report program
participation numbers, homeowners may be counted more than once when they
receive assistance from multiple HHF programs offered in their state (as of June
30, 2014, 14 states have more than one program). For example, a homeowner may
have lost his job, missed three months of mortgage payments, and then sought
help from his state. This homeowner might be qualified to receive assistance from
two HHF programs offered by his state, one that could help him make up missed
mortgage payments, and a second that could help him pay his future mortgage
payments while he seeks new employment. Treasury requires states to estimate the
number of people who will participate in each of their programs, and then report
the number who actually participate in each program.342 It also requires them to
report the total number of individual homeowners assisted, which is lower than the
reported program participation numbers when homeowners have participated in
more than one program offered by their state.343
xi
As of June 30, 2014, the states reported that 223,327 homeowners
344
participated in HHF programs. However, because homeowners may participate
in more than one program, the reported program participation numbers are higher
than the total number of individual homeowners assisted. According to Treasury,
193,716 individual homeowners participated in HHF programs.345
Table 4.24 provides each state’s estimate of the number of homeowners it
projects it will help and the actual number of homeowners helped as of June 30,
xii
2014.

xi D
 ata was incomplete at date of publication, as Nevada’s data for Program Participation, which are not included in this number, were

not yet available.
xii Program participation and homeowners assisted data does not take into account the status of the mortgage (i.e., active, delinquent,
in foreclosure, foreclosed, or sold) of homeowners who received TARP-funded HHF assistance.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.24

HHF ESTIMATED AND ACTUAL NUMBER OF BORROWERS ASSISTED AND
ASSISTANCE PROVIDED BY STATE AS OF 6/30/2014

Recipient
Alabama
Arizona

Estimated Number
of Participating
Households to
be Assisted by
12/31/2017*

Actual Borrowers
Receiving Assistance
as of 6/30/2014**

Assistance Provided
as of 6/30/2014**

5,800

3,445

$27,466,526

7,606

3,090

71,009,582

66,570

40,797

723,778,214

Florida

39,000

17,982

356,578,005

Georgia

15,100

5,148

81,481,383

Illinois

13,500

13,371

285,414,282

Indiana

10,150

3,594

42,141,198

Kentucky

5,960

5,727

65,244,040

Michigan

California

11,477

21,194

164,797,747

Mississippi

3,500

2,480

33,468,949

Nevada

7,565

5,325

83,593,953

New Jersey

6,500

5,673

172,209,645

North Carolina

21,310

16,767

257,478,422

Ohio

41,201

20,316

307,866,338

Oregon

15,150

10,505

152,959,336

3,413

3,075

59,520,610

19,400

7,956

109,596,788

7,700

6,575

107,995,580

800

696

12,734,866

301,702

193,716

$3,115,335,466

Rhode Island
South Carolina
Tennessee
Washington, DC
Total

Notes: Estimated includes highest estimate of a range. Program expenses obtained from each state’s Quarterly Financial Report,
which reconciles each type of cash disbursement to funds drawn from Treasury. As such, all expenses are based on actual cash
disbursements.
*Source: Estimates are from the latest HFA Participation Agreements as of 6/30/2014. Later amendments are not included for
consistency with Quarterly Performance reporting.
States report the Estimated Number of Participating Households individually for each HHF program they operate. This column shows
the totals of the individual program estimates for each state. Therefore, according to Treasury, these totals do not necessarily
translate into the number of unique households that the states expect to assist because some households may participate in more
than one HHF program.
**Sources: Treasury, response to SIGTARP data call, 10/6/2014; Second Quarter 2014 HFA Performance Data quarterly reports
and Second Quarter 2014 HFA Aggregate Quarterly Report.

173

174

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

State by State Updates
Of the 19 states participating in HHF, over time all states have reduced their
estimates of how many homeowners will participate in HHF, most of them
significantly since their peak estimates. Collectively, since the peak in early 2011,
the 19 states have reduced their estimates of how many people they would help
by 45%. Seven states have reduced their estimates by more than 50%: Alabama
(57% reduction), Florida (63% reduction), Illinois (53% reduction), Kentucky (60%
reduction), Michigan (77% reduction), Nevada (68% reduction), and Rhode Island
(74% reduction).
Collectively, as of June 30, 2014, the states have spent $3.1 billion on direct
assistance to homeowners, or 41% of the $7.6 billion in TARP funds obligated to
xiii
HHF.346, Of the 19 HHF states, Rhode Island has spent the highest percentage,
75%, of its obligated funds on homeowner assistance. Alabama has spent the lowest
percentage, 17%. In addition to Alabama, three other states have spent less than
27% of their obligated funds on assistance to homeowners: Indiana, Arizona, and
Georgia. For each of the states, the following pages review estimates of program
participation and reported numbers of homeowners who have been assisted, as well
as expenditures compared with obligated funds.
According to Treasury, seven states are no longer accepting applications for
assistance from homeowners because they determined that their allocated HHF
funds would be spent on homeowners who already have been approved for HHF
assistance.347 They include Tennessee, Rhode Island, Illinois, New Jersey, Oregon,
Ohio and Washington, DC. Rhode Island stopped accepting applications after
January 31, 2013.348 Illinois stopped accepting applications after September
30, 2013.349 New Jersey stopped accepting applications after November 30,
2013.350 Washington, DC stopped accepting applications after November 22,
2013. Ohio stopped accepting new applications after April 30, 2014 and Oregon
Homeownership Stabilization Initiative stopped accepting new applications after
June 30, 2014. Tennessee stopped accepting applications as of September 30,
2014.351 Table 4.25 below provides a snapshot of states’ HHF activity by program
type.

xiii A
 ccording to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.25

HHF PROGRAMS BY STATE, AS OF 6/30/2014
State
ALABAMA

Unemploymenta

Transitionb

Modificationc

X

X

X

Second Lien
Reductiond

Past-Due
Paymente

Blight
Eliminationf

Total
Programs
3

ARIZONA

X

X

X

X

CALIFORNIA

X

X

X

X

4
X

5

FLORIDA

X

XX

XX

5

GEORGIA

X

X

X

3

ILLINOIS

X

XX

X

X

X

INDIANA

X

KENTUCKY

X

MICHIGAN

X

MISSISSIPPI

X

NEVADA

XX

NEW JERSEY

X

NORTH CAROLINA

XX

OHIO

X

OREGON

X

X

4
4
1

XX

X

X

5
1

X

XXX

X

7
1

X
X

X

4

XXXX

X

XX

X

X

8
4

RHODE ISLAND

X

X

XX

X

5

SOUTH CAROLINA

X

X

X

X

4

TENNESSEE

X

1

WASHINGTON, DC

X

1

Total Programs
Legend:
X:
XX:
XXX:
XXXX:

21

8

24

4

9

4

One program
Two programs
Three programs
Four programs

Notes:
a
Monthly subsidy that reduces the unemployment homeowner’s mortgage payment, in some cases paying it in full.
b
One-time benefit to help eligible homeowners relocate to new housing following a short sale or deed-in-lieu of foreclosure program.
c
One-time benefit that reduces the principal and/or improves the terms of the mortgage to reduce the homeowner’s payment to an affordable level.
d
One-time payment to incent servicers to extinguish 2nd mortgages or provide more affordable payments.
e
One-time benefit that pays off past due balances.
f
Programs that demolish vacant or condemned properties in order stabilize home values and improve neighborhoods.
Source: Treasury, response to SIGTARP data call, 7/8/2014.

70

175

176

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Alabama’s HHF Programs

Even though Treasury obligated $162,521,345 of HHF funds to Alabama, Alabama
is not getting a significant amount of these funds out the door to help homeowners
with HHF.352 As of June 30, 2014, the state had drawn down $40 million (25%)
xiv
of those funds.353, As of June 30, 2014, the most recent data available, Alabama
had spent $27.5 million (17% of its obligated funds) to help 3,445 individual
xv
homeowners with its HHF programs.354, The remaining $6.8 million (4%) was
spent on administrative expenses, and $6.1 million (4%) is held as cash-onxvi
hand.355, As of June 30, 2014, the state had three active HHF programs, one to
provide unemployment assistance to homeowners, a second to modify homeowners’
mortgages, and a third to provide HHF transition assistance. At the end of 2010,
Alabama estimated that it would help as many as 13,500 homeowners with HHF
but, as of June 30, 2014, reduced that peak estimate by 57%, to 5,800. Figure
4.7 shows, in aggregate, the number of homeowners estimated to participate in
Alabama’s programs (estimated program participation), the reported number of
homeowners who participated in one or more programs (program participation),
and the total number of individual homeowners assisted, as of June 30, 2014.
Figure 4.8 shows the number of homeowners estimated to participate in each of
Alabama’s programs (estimated program participation) and the reported number
of homeowners who participated in each of Alabama’s programs (program
participation), as of June 30, 2014.

xiv Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Alabama had

drawn down $40 million.
xv A
 ccording to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
xvi Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.7

ALABAMA ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
15,000
Peak estimate: 13,500
6/30/2014 estimate: 5,800
6/30/2014 program participation: 3,445
Homeowners assisted: 3,445

12,000

9,000

6,000

3,000

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Alabama Housing Finance Authority, Proposal, 8/31/2010; Treasury
and Alabama Housing Finance Authority, Commitment to Purchase Financial Instrument and HFA
Participation Agreement, 9/23/2010; Alabama Housing Finance Authority, first through seventh
Amendment[s] to Agreement[s], 9/29/2010, 12/16/2010, 1/26/2011, 3/31/2011, 5/25/2011,
6/28/2012, and 3/8/2013; Alabama Housing Finance Authority, Treasury Reports, Quarterly
Performance Reports Q1 2011 - Q2 2014, no date.

177

178

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.8

ALABAMA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
HARDEST HIT FOR ALABAMA'S UNEMPLOYED
HOMEOWNERS (UNEMPLOYMENT)
15,000
12,000

Peak estimate: 13,500
6/30/14 estimate: 3,100
6/30/14 program participation: 3,442

9,000

SHORT SALE ASSISTANCE PROGRAM
(TRANSITION)
2,000

Peak estimate: 1,500
6/30/14 estimate: 1,500
6/30/14 program participation: 0

1,500
1,000

6,000

500

3,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

LOAN MODIFICATION ASSISTANCE PROGRAM
(MODIFICATION)
2,000
1,500

Peak estimate: 1,200
6/30/14 estimate: 1,200
6/30/14 program participation: 3

1,000
500
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. Alabama Housing Finance Authority, Proposal, 8/31/2010; Treasury and Alabama Housing
Finance Authority, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010; Alabama Housing Finance Authority, first through seventh Amendment[s] to Agreement[s],
9/29/2010, 12/16/2010, 1/26/2011, 3/31/2011, 5/25/2011, 6/28/2012, and 3/8/2013; Alabama Housing Finance Authority, Treasury Reports, Quarterly Performance Reports Q1 2011 - Q2
2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Arizona’s HHF Programs

Even though Treasury obligated $267,766,006 of HHF funds to Arizona, Arizona
is not getting a significant amount of these funds out the door to help homeowners
with HHF.356 As of June 30, 2014, the state had drawn down $127 million (47%)
xvii
of those funds.357, As of June 30, 2014, the most recent data available, Arizona
had spent $71 million (27% of its obligated funds) to help 3,090 individual
xviii
homeowners with its HHF programs.358, The remaining $13.8 million (5%)
was spent on administrative expenses, and $13.5 million (5%) is held as cash-onxix
hand.359, As of June 30, 2014, the state had four active HHF programs: one to
modify homeowners’ mortgages with principal reduction assistance, a second to
provide HHF second-lien reduction assistance to homeowners, a third to provide
unemployment assistance to homeowners, and a fourth to provide transition
assistance to homeowners. At the end of 2010, Arizona estimated that it would help
as many as 11,959 homeowners with HHF but, as of June 30, 2014, had reduced
that peak estimate by 36%, to 7,606.
Figure 4.9 shows, in aggregate, the number of homeowners estimated to
participate in Arizona’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of
June 30, 2014. Because homeowners may participate in more than one program,
the reported program participation numbers are higher than the total number of
individual homeowners assisted. Figure 4.10 shows the number of homeowners
estimated to participate in each of Arizona’s programs (estimated program
participation) and the reported number of homeowners who participated in each of
Arizona’s programs (program participation), as of June 30, 2014.

xvii Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Arizona had
drawn down $155.8 million.
xviii A
 ccording to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in

HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xix Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

179

180

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.9

ARIZONA ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
12,000

10,000

8,000

6,000

4,000

Peak estimate: 11,959
6/30/2014 estimate: 7,606
6/30/2014 program participation: 3,318
Homeowners assisted: 3,090

2,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Arizona (Home) Foreclosure Prevention Funding Corporation,
Proposal, no date; Treasury and Arizona (Home) Foreclosure Prevention Funding Corporation,
Commitment to Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; Arizona
(Home) Foreclosure Prevention Funding Corporation, first through thirteenth Amendment[s] to
Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 1/26/2011, 3/31/2011, 5/25/2011,
8/31/2011, 3/29/2012, 7/17/2012, 8/24/2012, 6/6/2013, 10/30/2013, and 2/27/2014;
Arizona (Home) Foreclosure Prevention Funding Corporation, Hardest Hit Fund Reporting (quarterly
performance reports), Quarterly Performance Reports Q3 2010 - Q2 2014, no date; Treasury,
responses to SIGTARP data calls, 10/3/2013 and 10/7/2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.10

ARIZONA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
PRINCIPAL REDUCTION ASSISTANCE
(MODIFICATION)
10,000

SECOND MORTGAGE ASSISTANCE COMPONENT
(SECOND-LIEN REDUCTION)

Peak estimate: 7,227
6/30/14 estimate: 1,849
6/30/14 program participation: 750

8,000

1,500

6,000

1,000

4,000

500

2,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

5,000

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

UNEMPLOYMENT/UNDEREMPLOYMENT MORTGAGE
ASSISTANCE COMPONENT (UNEMPLOYMENT)
6,000

Peak estimate: 1,875
6/30/14 estimate: 1,279
6/30/14 program participation: 182

2,000

Peak estimate: 4,140
6/30/14 estimate: 4,140
6/30/14 program participation: 2,291

4,000
3,000

Program Participation

SHORT SALE ASSISTANCE COMPONENT
(TRANSITION)
Peak estimate: 1,200
6/30/14 estimate: 338
6/30/14 program participation: 95

2,000
1,500
1,000

2,000

500

1,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. Arizona (Home) Foreclosure Prevention Funding Corporation, Proposal, no date; Treasury and
Arizona (Home) Foreclosure Prevention Funding Corporation, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; Arizona (Home) Foreclosure Prevention Funding
Corporation, first through thirteenth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 1/26/2011, 3/31/2011, 5/25/2011, 8/31/2011, 3/29/2012, 7/17/2012, 8/24/2012,
6/6/2013, 10/30/2013, and 2/27/2014; Arizona (Home) Foreclosure Prevention Funding Corporation, Hardest Hit Fund Reporting (quarterly performance reports), Quarterly Performance Reports Q3
2010 - Q2 2014, no date; Treasury, responses to SIGTARP data calls, 10/3/2013 and 10/7/2013.

181

182

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

California’s HHF Programs

Even though Treasury obligated $1,975,334,096 of HHF funds to California,
California is not getting a significant amount of these funds out the door to help
homeowners with HHF.360 As of June 30, 2014, the state had drawn down $967.5
xx
million (49%) of those funds.361, As of June 30, 2014, the most recent data
available, California had spent $723.8 million (37% of its obligated funds) to help
xxi
40,797 individual homeowners with its HHF programs.362, The remaining $80.9
million (4%) was spent on administrative expenses, and $175.9 million (9%) is held
xxii
as cash-on-hand.363, As of June 30, 2014, the state had five active HHF programs:
one to provide unemployment assistance to homeowners, a second to modify
homeowners’ mortgages with principal reduction assistance, a third to provide
HHF transition assistance to homeowners, a fourth to provide past-due payment
assistance to homeowners, and a fifth to provide HHF second-lien, principal
reduction assistance to homeowners.
At the end of 2010, California estimated that it would help as many as 101,337
homeowners with HHF but, as of June 30, 2014, had reduced that peak estimate
by 34%, to 66,570.
Figure 4.11 shows, in aggregate, the number of homeowners estimated to
participate in California’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of
June 30, 2014. Because homeowners may participate in more than one program,
the reported program participation numbers are higher than the total number of
individual homeowners assisted. Figure 4.12 shows the number of homeowners
estimated to participate in each of California’s programs (estimated program
participation) and the reported number of homeowners who participated in each of
California’s programs (program participation), as of June 30, 2014.

xx T
 reasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, California had

drawn down $967.5 million.
xxi According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
xxii F igures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.11

CALIFORNIA ESTIMATED PROGRAM PARTICIPATION,
PROGRAM PARTICIPATION, AND INDIVIDUAL HOMEOWNERS
ASSISTED, IN ALL HHF PROGRAMS, AS OF 6/30/2014
120,000

100,000

80,000

60,000
Peak estimate: 101,337
6/30/2014 estimate: 66,570
6/30/2014 program participation: 43,974
Homeowners assisted: 40,797

40,000

20,000

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. CalHFA Mortgage Assistance Corporation, Proposal, no date; Treasury
and CalHFA Mortgage Assistance Corporation, Commitment to Purchase Financial Instrument and HFA
Participation Agreement, 6/23/2010; CalHFA Mortgage Assistance Corporation, first through thirteenth
Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 3/31/2011, 8/3/2011,
10/28/2011, 5/3/2012, 7/17/2012, 12/14/2012, 6/6/2013, 9/20/2013, 2/27/2014, and
4/11/2014; CalHFA Mortgage Assistance Corporation, “Keep Your Home California, Reports &
Statistics, Quarterly Reports,” Quarterly Performance Reports Q4 2010 - Q2 2014, no date.

183

184

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.12

CALIFORNIA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
UNEMPLOYMENT MORTGAGE ASSISTANCE PROGRAM
(UNEMPLOYMENT)
100,000
80,000

Peak estimate: 60,531
6/30/14 estimate: 42,000
6/30/14 program participation: 32,970

MORTGAGE REINSTATEMENT ASSISTANCE PROGRAM
(PAST-DUE PAYMENT)

20,000

60,000

15,000

40,000

10,000

20,000

5,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

40,000

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

PRINCIPAL REDUCTION PROGRAM (MODIFICATION)
50,000

Peak estimate: 25,135
6/30/14 estimate: 14,000
6/30/14 program participation: 3,952

8,000
6,000
4,000

10,000

2,000
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

COMMUNITY SECOND MORTGAGE PRINCIPAL
REDUCTION PROGRAM (SECOND-LIEN REDUCTION)

200

375

150

Peak estimate: 166
6/30/14 estimate: 0
6/30/14 program participation: 0

100

Peak estimate: 370
6/30/14 estimate: 370
6/30/14 program participation: 34

50

0

Program Participation

LOS ANGELES HOUSING DEPARTMENT PRINCIPAL
REDUCTION PROGRAM (MODIFICATION)

500

125

Peak estimate: 6,471
6/30/14 estimate: 1,000
6/30/14 program participation: 642

10,000

20,000

0

Program Participation

TRANSITION ASSISTANCE PROGRAM
(TRANSITION)

30,000

250

Peak estimate: 17,293
6/30/14 estimate: 9,200
6/30/14 program participation: 6,376

25,000

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

NEIGHBORWORKS SACRAMENTO SHORT SALE
GATEWAY PROGRAM (TRANSITION)
200
150

Peak estimate: 91
6/30/14 estimate: 0
6/30/14 program participation: 0

100
50
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. CalHFA Mortgage Assistance Corporation, Proposal, no date; Treasury and CalHFA Mortgage
Assistance Corporation, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; CalHFA Mortgage Assistance Corporation, first through thirteenth Amendment[s]
to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 3/31/2011, 8/3/2011, 10/28/2011, 5/3/2012, 7/17/2012, 12/14/2012, 6/6/2013, 9/20/2013, 2/27/2014, and 4/11/2014; CalHFA
Mortgage Assistance Corporation, “Keep Your Home California, Reports & Statistics, Quarterly Reports,” Quarterly Performance Reports Q4 2010 - Q2 2014, no date; Treasury, response to SIGTARP
data call, 10/3/2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Florida’s HHF Programs

Even though Treasury obligated $1,057,839,136 of HHF funds to Florida, Florida
is not getting a significant amount of these funds out the door to help homeowners
with HHF.364 As of June 30, 2014, the state had drawn down $476.3 million (45%)
xxiii
of those funds.365, As of June 30, 2014, the most recent data available, Florida
had spent $356.6 million (34% of its obligated funds) to help 17,982 individual
xxiv
homeowners with its HHF programs.366, The remaining $42.2 million (4%)
was spent on administrative expenses, and $78.6 million (7%) is held as cash-onxxv
hand.367, As of June 30, 2014, the state had five active HHF programs: one to
provide unemployment assistance to homeowners, a second and third to provide
past-due payment assistance to homeowners, and a fourth and fifth to modify
homeowners’ mortgages. At the start of 2011, Florida estimated that it would help
as many as 106,000 homeowners with HHF but, as of June 30, 2014, had reduced
that peak estimate by 63%, to 39,000.
Figure 4.13 shows, in aggregate, the number of homeowners estimated to
participate in Florida’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of
June 30, 2014. Because homeowners may participate in more than one program,
the reported program participation numbers are higher than the total number of
individual homeowners assisted. Figure 4.14 shows the number of homeowners
estimated to participate in each of Florida’s programs (estimated program
participation) and the reported number of homeowners who participated in each of
Florida’s programs (program participation), as of June 30, 2014.

xxiii Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Florida had
drawn down $536.3 million.
xxiv According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in

HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xxv Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

185

186

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.13

FLORIDA ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
120,000

100,000

80,000

Peak estimate: 106,000
6/30/2014 estimate: 39,000
6/30/2014 program participation: 28,831
Homeowners assisted: 17,982

60,000

40,000

20,000

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Florida Housing Finance Corporation, Proposal, no date; Treasury and
Florida Housing Finance Corporation, Commitment to Purchase Financial Instrument and HFA
Participation Agreement, 6/23/2010; Florida Housing Finance Corporation, first through eighth
Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 3/31/2011, 5/30/2012,
9/28/2012, 5/25/2013, and 9/20/2013; Florida Housing Finance Corporation, Florida Hardest Hit
Fund (HHF) Information, Quarterly Reports, Quarterly Performance Reports Q3 2010 - Q2 2014, no
date; Treasury, response to SIGTARP data call, 10/3/2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.14

FLORIDA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
UNEMPLOYMENT MORTGAGE ASSISTANCE PROGRAM
(UNEMPLOYMENT)

MORTGAGE LOAN REINSTATEMENT PROGRAM
(PAST-DUE PAYMENT)

100,000

100,000

80,000
60,000

Peak estimate: 53,000
6/30/14 estimate: 25,000
6/30/14 program participation: 13,399

80,000
60,000

40,000

40,000

20,000

20,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

State Estimated Program Participation

Peak estimate: 1,500
6/30/14 estimate: 1,500
6/30/14 program participation: 12

500

Program Participation

PRINCIPAL REDUCTION PROGRAM (MODIFICATION)
50,000

2,000

1,000

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

MODIFICATION ENABLING PILOT PROGRAM
(MODIFICATION)
1,500

Peak estimate: 53,000
6/30/14 estimate: 25,000
6/30/14 program participation: 12,508

40,000
30,000

Peak estimate: 10,000
6/30/14 estimate: 10,000
6/30/14 program participation: 2,751

20,000
10,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

ELDERLY MORTGAGE ASSISTANCE PROGRAM
(PAST-DUE PAYMENT)
10,000
8,000
6,000

Peak estimate: 2,500
6/30/14 estimate: 2,500
6/30/14 program participation: 161

4,000
2,000
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range. Florida estimates that it will serve approximately 25,000 homeowners in the
aggregate between its Unemployment Mortgage Assistance Program and its Mortgage Loan Reinstatement Program.
Sources: States provide estimates for program participation and report program participation numbers. Florida Housing Finance Corporation, Proposal, no date; Treasury and Florida Housing Finance
Corporation, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; Florida Housing Finance Corporation, first through eighth Amendment[s] to Agreement[s],
9/23/2010, 9/29/2010, 12/16/2010, 3/31/2011, 5/30/2012, 9/28/2012, 5/25/2013, and 9/20/2013; Florida Housing Finance Corporation, Florida Hardest Hit Fund (HHF) Information, Quarterly
Reports, Quarterly Performance Reports Q3 2010 - Q2 2014, no date; Treasury, response to SIGTARP data call, 10/3/2013.

187

188

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Georgia’s HHF Programs

Even though Treasury obligated $339,255,819 of HHF funds to Georgia, Georgia
is not getting a significant amount of these funds out the door to help homeowners
with HHF.368 As of June 30, 2014, the state had drawn down $144.4 million (43%)
xxvi
of those funds.369, As of June 30, 2014, the most recent data available, Georgia
had spent $81.5 million (24% of its obligated funds) to help 5,148 individual
xxvii
homeowners with its HHF program.370, The remaining $16.4 million (5%) was
spent on administrative expenses, and $46.9 million (14%) is held as cash-onxxviii
hand.371, As of June 30, 2014, the state had three active HHF programs: one to
provide unemployment assistance to homeowners, a second to provide past-due
payment assistance to homeowners, and a third to modify homeowners’ mortgages.
At the end of 2010, Georgia estimated that it would help as many as 18,300
homeowners with HHF but, as of June 30, 2014, had reduced that peak estimate
by 17%, to 15,100.372
Figure 4.15 shows the number of homeowners estimated to participate in
Georgia’s program and the number of homeowners who have been assisted, as
of June 30, 2014. Figure 4.16 shows the number of homeowners estimated to
participate in each of Georgia’s programs (estimated program participation) and the
reported number of homeowners who participated in each of Georgia’s programs
(program participation), as of June 30, 2014.

xxvi T
 reasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Georgia had
drawn down $144.4 million.
xxvii According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in
HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xxviii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn
from Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien
recoveries and borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.15

GEORGIA’S ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
20,000

15,000

Peak estimate: 18,300
6/30/2014 estimate: 15,100
6/30/2014 program participation: 5,148
Homeowners assisted: 5,148

10,000

5,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and homeowners assisted numbers.
GHFA Affordable Housing Inc., Proposal, no date; Treasury and GHFA Affordable Housing Inc.,
Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010; GHFA
Affordable Housing Inc., first through sixth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010,
12/16/2010, 6/28/2011, 5/3/2012, 12/12/2013, and 1/31/2014; GHFA Affordable Housing Inc.,
HomeSafe Georgia, US Treasury Reports, Quarterly Performance Reports Q4 2010 - Q2 2014, no
date.

189

190

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.16

GEORGIA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
MORTGAGE PAYMENT ASSISTANCE
(UNEMPLOYMENT)
Peak estimate: 18,300
25,000
20,000

6/30/14 estimate: 9,100
6/30/14 program participation: 5,146

15,000

MORTGAGE REINSTATEMENT PROGRAM
(PAST-DUE PAYMENT)
10,000

Peak estimate: 5,000
6/30/14 estimate: 5,000
6/30/14 program participation: 2

7,500
5,000

10,000

2,500

5,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

RECAST/MODIFICATION (MODIFICATION)
2,000
1,500
1,000

Peak estimate: 1,000
6/30/14 estimate: 1,000
6/30/14 program participation: 0

500
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and homeowners assisted numbers. GHFA Affordable Housing Inc., Proposal, no date; Treasury and GHFA Affordable Housing Inc.,
Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010; GHFA Affordable Housing Inc., first through sixth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010,
12/16/2010, 6/28/2011, 5/3/2012, 12/12/2013, and 1/31/2014; GHFA Affordable Housing Inc., HomeSafe Georgia, US Treasury Reports, Quarterly Performance Reports Q4 2010 - Q2 2014, no
date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Illinois’s HHF Programs

Treasury obligated $445,603,557 of HHF funds to Illinois.373 As of June 30, 2014,
xxix
the state had drawn down $360 million (81%) of those funds.374, As of June 30,
2014, the most recent data available, Illinois had spent $285.4 million (64% of its
xxx
obligated funds) to help 13,371 individual homeowners.375, The remaining $25.2
million (6%) was spent on administrative expenses, and $54.9 million (12%) is held
xxxi
as cash-on-hand.376, As of June 30, 2014, the state had four HHF programs: one
to provide unemployment assistance to homeowners, a second and third to modify
homeowners’ mortgages and a fourth to demolish vacant properties. Illinois stopped
accepting new applications from struggling homeowners seeking help from their
xxxii
HHF programs submitted after September 30, 2013.377, In mid-2011, Illinois
estimated that it would help as many as 29,000 homeowners with HHF but, as of
June 30, 2014, reduced that peak estimate by 53%, to 13,500.
Figure 4.17 shows, in aggregate, the number of homeowners estimated to
participate in Illinois’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of
June 30, 2014. Because homeowners may participate in more than one program,
the reported program participation numbers are higher than the total number of
individual homeowners assisted. Figure 4.18 shows the number of homeowners
estimated to participate in each of Illinois’s programs (estimated program
participation) and the reported number of homeowners who participated in each of
Illinois’s programs (program participation), as of June 30, 2014.

xxix Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Illinois had
drawn down $360 million.
xxx According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in

HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xxxi Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn
from Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries
and borrower remittances. Illinois HHF administrative expenses are paid by the Illinois State Administrative division, which the Illinois
HFA periodically reimburses using HHF funding. As the Illinois HFA did not make any reimbursement payments to the Illinois State
Administrative division in Q2, they did not report any administrative expense cash disbursements during the period.
xxxii According to Treasury, Illinois is no longer accepting applications for assistance from homeowners because it determined that its
allocated HHF funds would be spent on homeowners who already have been approved for HHF assistance.

191

192

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.17

ILLINOIS ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
30,000

25,000

20,000

15,000

10,000

Peak estimate: 29,000
6/30/2014 estimate: 13,500
6/30/2014 program participation: 13,393
Homeowners assisted: 13,371

5,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in
states that have more than one program. For its “Blight Elimination Program” (Demolition), Illinois
estimated a number of blighted properties proposed to be eliminated. This number is not included in
the aggregate estimate of all programs because it refers to properties and not homeowners.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Illinois Housing Development Authority, Proposal, no date; Treasury
and Illinois Housing Development Authority, Commitment to Purchase Financial Instrument and HFA
Participation Agreement, 9/23/2010; Illinois Housing Development Authority, first through tenth
Amendment[s] to Agreement[s], 9/29/2010, 12/16/2010, 5/11/2011, 8/3/2011, 1/25/2012,
8/2/2012, 9/28/2012, 3/8/2012, 8/9/2013, and 4/11/2014; Illinois Housing Development
Authority, Illinois Hardest Hit Program, Reporting, Quarterly Performance Reports Q1 2011 - Q2
2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.18

ILLINOIS ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
HARDEST HIT FUND HOMEOWNER EMERGENCY
LOAN PROGRAM (UNEMPLOYMENT)
50,000
40,000

Peak estimate: 27,000
6/30/14 estimate: 12,000
6/30/14 program participation: 12,930

30,000

MORTGAGE RESOLUTION FUND PROGRAM
(MODIFICATION)
2,000
1,500
1,000

20,000

500

10,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

500

250

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

HOME PRESERVATION PROGRAM (MODIFICATION)

375

Peak estimate: 2,000
6/30/14 estimate: 1,000
6/30/14 program participation: 185

Program Participation

HARDEST HIT FUND BLIGHT REDUCTION PROGRAM
(DEMOLITION)
100
75

Peak estimate: 500
6/30/14 estimate: 500
6/30/14 program participation: 278

50

125

6/30/14 blighted homes proposed to be eliminated: 50
6/30/14 actual blighted homes eliminated: 0

25

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range. For its “Blight Elimination Program” (Demolition), Illinois estimated a number of
blighted properties proposed to be eliminated. This number is not included in the aggregate estimate of all programs because it refers to properties and not homeowners.
Sources: States provide estimates for program participation and report program participation numbers. Illinois Housing Development Authority, Proposal, no date; Treasury and Illinois Housing
Development Authority, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010; Illinois Housing Development Authority, first through tenth Amendment[s] to
Agreement[s], 9/29/2010, 12/16/2010, 5/11/2011, 8/3/2011, 1/25/2012, 8/2/2012, 9/28/2012, 3/8/2012, 8/9/2013, and 4/11/2014; Illinois Housing Development Authority, Illinois Hardest
Hit Program, Reporting, Quarterly Performance Reports Q1 2011 - Q2 2014, no date.

193

194

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Indiana’s HHF Programs

Even though Treasury obligated $221,694,139 of HHF funds to Indiana, Indiana
is not getting a significant amount of these funds out the door to help homeowners
with HHF.378 As of June 30, 2014, the state had drawn down $66.3 million (30%)
xxxiii
of those funds.379, As of June 30, 2014, the most recent data available, Indiana
had spent $42.1 million (19% of its obligated funds) to help 3,594 individual
xxxiv
homeowners with its HHF programs.380, The remaining $13.4 million (6%)
was spent on administrative expenses, and $11 million (5%) is held as cash-onxxxv
hand.381, As of June 30, 2014, the state had four active HHF programs: one to
provide unemployment assistance to homeowners, a second to modify homeowners’
mortgages, a third to provide transition assistance to homeowners, and a fourth
to demolish vacant properties. At the start of 2011, Indiana estimated helping as
many as 16,257 homeowners with HHF but, as of June 30, 2014, reduced that
peak estimate by 38%, to 10,150.
Figure 4.19 shows, in aggregate, the number of homeowners estimated to
participate in Indiana’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of June
30, 2014. Figure 4.20 shows the number of homeowners estimated to participate
in each of Indiana’s programs (estimated program participation) and the reported
number of homeowners who participated in each of Indiana’s programs (program
participation), as of June 30, 2014.

xxxiii Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Indiana had
drawn down $66.3 million.
xxxiv A
 ccording to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in
HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xxxv Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn
from Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien
recoveries and borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.19

INDIANA ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
20,000

15,000

10,000

Peak estimate: 16,257
6/30/2014 estimate: 10,150
6/30/2014 program participation: 3,594
Homeowners assisted: 3,594

5,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. For its “Blight Elimination Program”
(Demolition), Indiana estimated a number of blighted properties proposed to be eliminated. This
number is not included in the aggregate estimate of all programs because it refers to properties and
not homeowners.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Indiana Housing and Community Development Authority, Proposal,
9/1/2010 and (amended) 2/14/2011; Treasury and Indiana Housing and Community Development
Authority, Commitment to Purchase Financial Instrument and HFA Participation Agreement,
9/23/2010; Indiana Housing and Community Development Authority, first through eighth
Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 3/9/2011, 9/28/2011, 1/25/2012,
7/17/2012, 9/28/2012, 3/8/2013, and 12/12/2013; Indiana Housing and Community Development
Authority, Indiana’s Hardest Hit Fund, Quarterly Reports to the U.S. Treasury, Quarterly Performance
Reports Q2 2011 - Q2 2014, no date.

195

196

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.20

INDIANA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
HARDEST HIT FUND UNEMPLOYMENT BRIDGE
PROGRAM (UNEMPLOYMENT)
25,000
20,000
15,000

Peak estimate: 16,257
6/30/14 estimate: 8,000
6/30/14 program participation: 3,557

HARDEST HIT FUND RECAST/MODIFICATION
PROGRAM (MODIFICATION)
2,000
1,500
1,000

10,000

500

5,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

200

100

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

HARDEST HIT FUND TRANSITION ASSISTANCE
PROGRAM (TRANSITION)
150

Peak estimate: 2,000
6/30/14 estimate: 2,000
6/30/14 program participation: 35

Program Participation

HARDEST HIT FUND BLIGHT ELIMINATION PROGRAM
(DEMOLITION)
5,000
4,000

Peak estimate: 150
6/30/14 estimate: 150
6/30/14 program participation: 2

3,000
2,000

50

6/30/14 blighted homes proposed to be eliminated: 5,000
6/30/14 actual blighted homes eliminated: 0

1,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range. For its “Blight Elimination Program” (Demolition), Indiana estimated a number of
blighted properties proposed to be eliminated. This number is not included in the aggregate estimate of all programs because it refers to properties and not homeowners.
Sources: States provide estimates for program participation and report program participation numbers. Indiana Housing and Community Development Authority, Proposal, 9/1/2010 and (amended)
2/14/2011; Treasury and Indiana Housing and Community Development Authority, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010; Indiana Housing and
Community Development Authority, first through eighth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 3/9/2011, 9/28/2011, 1/25/2012, 7/17/2012, 9/28/2012, 3/8/2013, and
12/12/2013; Indiana Housing and Community Development Authority, Indiana’s Hardest Hit Fund, Quarterly Reports to the U.S. Treasury, Quarterly Performance Reports Q2 2011 - Q2 2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Kentucky’s HHF Program

Even though Treasury obligated $148,901,875 of HHF funds to Kentucky,
Kentucky is not getting a significant amount of these funds out the door to help
homeowners with HHF.382 As of June 30, 2014, the state had drawn down $84
xxxvi
million (56%) of those funds.383, As of June 30, 2014, the most recent data
available, Kentucky had spent $65.2 million (44% of its obligated funds) to help
xxxvii
5,727 individual homeowners with its HHF program.384,
The remaining $10.6
million (7%) was spent on administrative expenses, and $8.7 million (6%) is held as
xxxviii
cash-on-hand.385,
As of June 30, 2014, the state had one active HHF program,
to provide unemployment assistance to homeowners. At the end of 2010, Kentucky
estimated that it would provide HHF unemployment assistance to as many as
15,000 homeowners but, as of June 30, 2014, reduced that peak estimate by 60%,
to 5,960. As of June 30, 2014, Kentucky had helped 5,727 homeowners with HHF
unemployment assistance.
Figure 4.21 shows the number of homeowners estimated to participate in
Kentucky’s program and the number of homeowners who have been assisted, as of
June 30, 2014.

xxxvi Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Kentucky

had drawn down $104 million.
xxxvii According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in
HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xxxviii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn
from Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien
recoveries and borrower remittances.

197

198

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.21

KENTUCKY’S UNEMPLOYMENT BRIDGE PROGRAM
(UNEMPLOYMENT) ESTIMATED PROGRAM PARTICIPATION AND
HOMEOWNERS ASSISTED, AS OF 6/30/2014
15,000

12,000

9,000

6,000

3,000

Peak estimate: 15,000
6/30/2014 estimate: 5,960
6/30/2014 program participation: 5,727
Homeowners assisted: 5,727

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Homeowners Assisted

Notes: Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and homeowners assisted numbers.
Kentucky Housing Corporation, Proposal, 8/31/2010; Treasury and Kentucky Housing Corporation,
Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010;
Kentucky Housing Corporation, first through sixth Amendment[s] to Agreement[s], 9/29/2010,
12/16/2010, 3/31/2011, 9/28/2011, 3/3/2012, and 12/14/2012; Kentucky Housing Corporation,
American Recovery and Reinvestment Act and Troubled Asset Relief Program, Kentucky Unemployment Bridge Program, Quarterly Performance Reports Q4 2010 - Q2 2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Michigan’s HHF Programs

Even though Treasury obligated $498,605,738 of HHF funds to Michigan,
Michigan is not getting a significant amount of these funds out the door to help
homeowners with HHF.386 As of June 30, 2014, the state had drawn down $204.4
xxxix
million (41%) of those funds.387, As of June 30, 2014, the most recent data
available, Michigan had spent $164.8 million (33% of its obligated funds) to help
xl
21,194 individual homeowners with HHF programs.388, As of June 30, 2014,
Michigan had spent $3.3 million to demolish vacant properties. The remaining
$21.7 million (4%) was spent on administrative expenses, and $19.1 million (4%) is
xli
held as cash-on-hand.389, As of June 30, 2014, the state had five HHF programs:
one to modify homeowners mortgage, a second to modify homeowners’ mortgages
with principal reduction assistance, a third to provide past-due payment assistance
to homeowners, a fourth to provide unemployment assistance to homeowners, and
a fifth to demolish vacant properties. At the end of 2010, Michigan estimated that
it would help as many as 49,422 homeowners with HHF, but, as of June 30, 2014,
had reduced that peak estimate by 77%, to 11,477.
Figure 4.22 shows, in aggregate, the number of homeowners estimated to
participate in Michigan’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of June
30, 2014. Figure 4.23 shows the number of homeowners estimated to participate
in each of Michigan’s programs (estimated program participation) and the reported
number of homeowners who participated in each of Michigan’s programs (program
participation), as of June 30, 2014.

xxxix Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Michigan

had drawn down $304.1 million.
xl According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
xli Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

199

200

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.22

MICHIGAN ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
50,000

40,000

30,000

20,000

10,000

Peak estimate: 49,422
6/30/2014 estimate: 11,477
6/30/2014 program participation: 21,194
Homeowners assisted: 21,194

0
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214
Q1’10

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. For its “Blight Elimination Program”
(Demolition), Michigan estimated a number of blighted properties proposed to be eliminated. This
number is not included in the aggregate estimate of all programs because it refers to properties and
not homeowners.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Michigan Homeowner Assistance Nonprofit Housing Corporation,
Proposal, 10/15/2010; Treasury and Michigan Homeowner Assistance Nonprofit Housing Corporation,
Commitment to Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; Michigan
Homeowner Assistance Nonprofit Housing Corporation, first through eighth Amendment[s] to
Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 8/3/2011, 6/28/2012, 11/15/2012,
6/6/2013, and 12/12/2013; Michigan Homeowner Assistance Nonprofit Housing Corporation,
Hardest Hit U.S. Treasury Reports, Quarterly Performance Reports Q3 2010 - Q2 2014, no date;
Treasury, response to SIGTARP data call, 10/7/2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.23

MICHIGAN ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
PRINCIPAL CURTAILMENT PROGRAM (MODIFICATION)
6,000
5,000

Peak estimate: 3,044
6/30/14 estimate: 300
6/30/14 program participation: 302

4,000

LOAN RESCUE PROGRAM (PAST-DUE PAYMENT)
25,000
20,000
15,000

3,000

10,000

2,000

5,000

1,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

20,000

5,000

State Estimated Program Participation

Program Participation

MODIFICATION PLAN PROGRAM (MODIFICATION)
1,000

25,000

10,000

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

UNEMPLOYMENT MORTGAGE SUBSIDY PROGRAM
(UNEMPLOYMENT)

15,000

Peak estimate: 21,760
6/30/14 estimate: 6,600
6/30/14 program participation: 14,560

750
500

Peak estimate: 24,618
6/30/14 estimate: 4,282
6/30/14 program participation: 6,262

250

0

Peak estimate: 825
6/30/14 estimate: 295
6/30/14 program participation: 70

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

BLIGHT ELIMINATION PROGRAM (DEMOLITION)
5,000
4,000
3,000
2,000

6/30/14 blighted homes proposed to be eliminated: 4,000
6/30/14 actual blighted homes eliminated: 315

1,000
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range. For its “Blight Elimination Program” (Demolition), Michigan estimated a number of
blighted properties proposed to be eliminated. This number is not included in the aggregate estimate of all programs because it refers to properties and not homeowners.
Sources: States provide estimates for program participation and report program participation numbers. Michigan Homeowner Assistance Nonprofit Housing Corporation, Proposal, 10/15/2010;
Treasury and Michigan Homeowner Assistance Nonprofit Housing Corporation, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; Michigan Homeowner
Assistance Nonprofit Housing Corporation, first through eighth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 8/3/2011, 6/28/2012, 11/15/2012, 6/6/2013, and
12/12/2013; Michigan Homeowner Assistance Nonprofit Housing Corporation, Hardest Hit U.S. Treasury Reports, Quarterly Performance Reports Q3 2010 - Q2 2014, no date; Treasury, response to
SIGTARP data calls, 10/7/2013 and 7/8/2014.

201

202

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Mississippi’s HHF Program

Even though Treasury obligated $101,888,323 of HHF funds to Mississippi,
Mississippi is not getting a significant amount of these funds out the door to help
homeowners with HHF.390 As of June 30, 2014, the state had drawn down $44.3
xlii
million (44%) of those funds.391, As of June 30, 2014, the most recent data
available, Mississippi had spent $33.5 million (33% of its obligated funds) to help
xliii
2,480 individual homeowners with its HHF program.392, The remaining $7.3
million (7%) was spent on administrative expenses, and $3.7 million (4%) is held
xliv
as cash-on-hand.393, As of June 30, 2014, the state had one HHF program, to
provide unemployment assistance to homeowners. At the end of 2010, Mississippi
estimated that it would provide HHF unemployment assistance to as many as
3,800 homeowners, but as of June 30, 2014, reduced that peak estimate by 8%,
to 3,500. As of June 30, 2014, Mississippi had provided HHF unemployment
assistance to 2,480 homeowners.
Figure 4.24 shows the number of homeowners estimated to participate in
Mississippi’s program and the number of homeowners who have been assisted, as
of June 30, 2014.

xlii T
 reasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Mississippi
had drawn down $55.8 million.
xliii According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in

HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xliv F igures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.24

MISSISSIPPI’S HOME SAVER PROGRAM (UNEMPLOYMENT)
ESTIMATED PROGRAM PARTICIPATION AND HOMEOWNERS
ASSISTED, AS OF 6/30/2014
4,000
3,500
3,000
2,500

Peak estimate: 3,800
6/30/14 estimate: 3,500
6/30/14 program participation: 2,480
Homeowners assisted: 2,480

2,000
1,500
1,000
500
0
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214
Q1’10

State Estimated Program Participation

Homeowners Assisted

Notes: Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and homeowners assisted numbers.
Mississippi Home Corporation, Proposal, 9/1/2010; Treasury and Mississippi Home Corporation,
Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010;
Mississippi Home Corporation, first through seventh Amendment[s] to Agreement[s], 9/29/2010,
12/16/2010, 12/8/2011, 9/28/2011, 1/25/2012, 9/28/2012, 4/25/2013, and 9/20/2013;
Mississippi Home Corporation, Financial Disclosures, Hardest Hit Fund, HFA Performance Data
Report[s], Quarterly Performance Reports Q4 2010 - Q2 2014, no date.

203

204

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

xlv

Nevada’s HHF Programs

Treasury obligated $194,026,240 of HHF funds to Nevada.394 As of June 30, 2014,
xlvi
the state had drawn down $112 million (58%) of those funds.395, As of June 30,
2014, the most recent data available, Nevada had spent $83.6 million (43% of its
xlvii
obligated funds) to help 5,325 individual homeowners with its HHF programs.396,
The remaining $12.3 million (6%) was spent on administrative expenses, and $16.6
xlviii
million (9%) is held as cash-on-hand.397, As of June 30, 2014, the state had seven
active HHF programs: two to provide unemployment assistance to homeowners,
three to modify homeowners’ mortgages with principal reduction assistance, one
for second-lien reduction assistance to homeowners, and one to provide transition
assistance to homeowners. In mid-2011, Nevada estimated that it would help as
many as 23,556 homeowners with HHF but, as of June 30, 2014, reduced that
peak estimate by 68%, to 7,565.
Figure 4.25 shows, in aggregate, the number of homeowners estimated to
participate in Nevada’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of
March 31, 2014. Figure 4.26 shows the number of homeowners estimated to
participate in each of Nevada’s programs (estimated program participation) and the
reported number of homeowners who participated in each of Nevada’s programs
(program participation), as of March 31, 2014.

xlv Program Participation data for Nevada were not yet available at time of publication.
xlvi T
 reasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Nevada had
drawn down $112 million.
xlvii According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in
HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
xlviii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn
from Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien
recoveries and borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.25

NEVADA ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 3/31/2014
25,000
Peak estimate: 23,556
3/31/2014 estimate: 6,854
3/31/2014 program participation: 5,202
Homeowners assisted: 5,202

20,000

15,000

10,000

5,000

0
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114
Q1’10

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: As Nevada Program Participation data was not yet available at time of publication for June 30,
2014, we have published the most up-to-date information available, as of March 31, 2014.
Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Nevada Affordable Housing Assistance Corporation, Proposal,
6/14/2010; Treasury and Nevada Affordable Housing Assistance Corporation, Commitment to
Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; Nevada Affordable
Housing Assistance Corporation, first through eleventh Amendment[s] to Agreement[s], 9/23/2010,
9/29/2010, 12/16/2010, 4/5/2011, 5/25/2011, 10/28/2011, 12/8/2011, 2/28/2012,
6/28/2012, 9/28/2012, and 8/28/2013; Nevada Affordable Housing Assistance Corporation,
Nevada Hardest Hit Fund, US Treasury Reports, Quarterly Performance Reports Q1 2011 - Q1 2014,
no date.

205

206

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.26

NEVADA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 3/31/2014
PRINCIPAL REDUCTION PROGRAM (MODIFICATION)
6,000
5,000

Peak estimate: 3,016
3/31/14 estimate: 1,040
3/31/14 program participation: 1,210

SECOND MORTGAGE REDUCTION PLAN
(SECOND-LIEN REDUCTION)
6,000
5,000

4,000

4,000

3,000

3,000

2,000

2,000

1,000

1,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14

State Estimated Program Participation

2,000

State Estimated Program Participation

20,000
15,000

Peak estimate: 1,713
3/31/14 estimate: 60
3/31/14 program participation: 100

5,000
0

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14

State Estimated Program Participation

Program Participation

MORTGAGE ASSISTANCE PROGRAM ALTERNATIVE
(UNEMPLOYMENT)
500

Program Participation

HOME RETENTION PROGRAM (MODIFICATION)
2,000

375

125

Peak estimate: 16,969
3/31/14 estimate: 4,033
3/31/14 program participation: 3,268

10,000

0

250

Program Participation

MORTGAGE ASSISTANCE PROGRAM
(UNEMPLOYMENT)
25,000

1,500

500

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14

Program Participation

SHORT-SALE ACCELERATION PROGRAM
(TRANSITION)

1,000

Peak estimate: 2,200
3/31/14 estimate: 500
3/31/14 program participation: 406

1,500

Peak estimate: 416
3/31/14 estimate: 71
3/31/14 program participation: 218

1,000

Peak estimate: 1,150
3/31/14 estimate: 1,150
3/31/14 program participation: 0

500

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14

State Estimated Program Participation

Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14

State Estimated Program Participation

Program Participation

Notes: As Nevada Program Participation data was not yet available at time of publication for June 30, 2014, we have published the most up-to-date information available, as of March 31, 2014.
Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. Nevada Affordable Housing Assistance Corporation, Proposal, 6/14/2010; Treasury and Nevada
Affordable Housing Assistance Corporation, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 6/23/2010; Nevada Affordable Housing Assistance Corporation, first
through eleventh Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 4/5/2011, 5/25/2011, 10/28/2011, 12/8/2011, 2/28/2012, 6/28/2012, 9/28/2012, and 8/28/2013;
Nevada Affordable Housing Assistance Corporation, Nevada Hardest Hit Fund, US Treasury Reports, Quarterly Performance Reports Q1 2011 - Q1 2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

New Jersey’s HHF Program

Treasury obligated $300,548,144 of HHF funds to New Jersey.398 New Jersey
has drawn down $245.5 million (82%) of obligated funds and spent $172.2
million (57%) of its obligated funds on program expenses to help 5,673 individual
xlix l
homeowners.399, , The remaining $21.2 million (7%) was spent on administrative
li
expenses, and $52.9 million (18%) is held as cash-on-hand.400, As of June 30,
2014, the state had one active HHF program, to provide unemployment assistance
to homeowners. From the end of 2010 to the end of 2013, New Jersey estimated
helping 6,900 homeowners with HHF but, as of June 30, 2014, reduced that peak
estimate by 6%, to 6,500. According to Treasury, New Jersey stopped accepting new
applications from struggling homeowners seeking help from their HHF programs
lii
submitted after November 30, 2013.401,
Figure 4.27 shows the number of homeowners estimated to participate in New
Jersey’s program and the number of homeowners who have been assisted, as of
June 30, 2014.

xlix T
 reasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, New Jersey
had drawn down $245.5 million.
lA
 ccording to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF

programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
li Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.
lii A
 ccording to Treasury, New Jersey is no longer accepting applications for assistance from homeowners because it determined that its
allocated HHF funds would be spent on homeowners who already have been approved for HHF assistance.

207

208

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.27

NEW JERSEY’S HOMEKEEPER PROGRAM (UNEMPLOYMENT)
ESTIMATED PROGRAM PARTICIPATION AND HOMEOWNERS
ASSISTED, AS OF 6/30/2014
8,000
7,000
6,000
5,000
4,000

Peak estimate: 6,900
6/30/2014 estimate: 6,500
6/30/2014 program participation: 5,673
Homeowners assisted: 5,673

3,000
2,000
1,000
0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Notes: Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and homeowners assisted numbers. New
Jersey Housing and Mortgage Finance Agency, Proposal, 9/1/2010; Treasury and New Jersey
Housing and Mortgage Finance Agency, Commitment to Purchase Financial Instrument and HFA
Participation Agreement, 9/23/2010; New Jersey Housing and Mortgage Finance Agency, first
through seventh Amendment[s] to Agreement[s], 9/29/2010, 12/16/2010, 8/31/2011, 1/25/2012,
8/24/2012, 10/30/2013, and 4/11/2014; New Jersey Housing and Mortgage Finance Agency, The
New Jersey HomeKeeper Program, About the Program, Performance Reports, Quarterly Performance
Reports Q3 2011 - Q2 2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

North Carolina’s HHF Programs

Treasury obligated $482,781,786 of HHF funds to North Carolina.402 As of June
30, 2014, the state had drawn down $352.9 million (73%) of those funds and
spent $257 million (53%) of their obligated funds on program expenses to help
liii liv
16,767 individual homeowners.403, , The remaining $44.4 million (9%) was spent
lv
on administrative expenses, and $53.6 million (11%) is held as cash-on-hand.404,
As of June 30, 2014, the state had four active HHF programs: two to provide
unemployment assistance to homeowners, a third to provide second-lien reduction
assistance to homeowners, and a fourth to modify homeowners’ mortgages with
principal reduction. From mid-2011 to mid-2013, North Carolina estimated that
it would help as many as 22,290 homeowners with HHF, but as of June 30, 2014,
reduced that peak estimate to 21,310.
Figure 4.28 shows, in aggregate, the number of homeowners estimated to
participate in North Carolina’s programs (estimated program participation), the
reported number of homeowners who participated in one or more programs
(program participation), and the total number of individual homeowners assisted,
as of June 30, 2014. Because homeowners may participate in more than one
program, the reported program participation numbers are higher than the total
number of individual homeowners assisted. Figure 4.29 shows the number
of homeowners estimated to participate in each of North Carolina’s programs
(estimated program participation) and the reported number of homeowners who
participated in each of North Carolina’s programs (program participation), as of
June 30, 2014.

liii Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, North Carolina
had drawn down $352.9 million.
liv According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
lv Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

209

210

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.28

NORTH CAROLINA ESTIMATED PROGRAM PARTICIPATION,
PROGRAM PARTICIPATION, AND INDIVIDUAL HOMEOWNERS
ASSISTED, IN ALL HHF PROGRAMS, AS OF 6/30/2014
25,000

20,000
Peak estimate: 22,290
6/30/2014 estimate: 21,310
6/30/2014 program participation: 16,856
Homeowners assisted: 16,767

15,000

10,000

5,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. North Carolina Housing Finance Agency, Proposal, 7/23/2010;
Treasury and North Carolina Housing Finance Agency, Commitment to Purchase Financial Instrument
and HFA Participation Agreement, 8/23/2010; North Carolina Housing Finance Agency, first through
seventh Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 5/25/2011,
1/25/2012, 8/9/2013, and 12/12/2013; North Carolina Housing Finance Agency, Hardest Hit Fund
& Performance Reporting, Quarterly Performance Reports Q3 2010 - Q2 2014, no date; Treasury,
response to SIGTARP data call, 10/7/2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.29

NORTH CAROLINA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION,
BY PROGRAM, AS OF 6/30/2014
MORTGAGE PAYMENT PROGRAM-1
(UNEMPLOYMENT)

MORTGAGE PAYMENT PROGRAM-2
(UNEMPLOYMENT)

6,000

15,000

5,000

12,000

4,000
3,000
2,000
1,000
0

Peak estimate: 5,750
6/30/14 estimate: 5,410
6/30/14 program participation: 4,269

6,000
3,000
0

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

2,000

State Estimated Program Participation

PERMANENT LOAN MODIFICATION PROGRAM
(MODIFICATION)
375

Peak estimate: 2,000
6/30/14 estimate: 1,000
6/30/14 program participation: 109

0

125
0

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

PRINCIPAL REDUCTION RECAST PROGRAM
(MODIFICATION)
2,000

Program Participation

MODIFICATION ENABLING PILOT PROJECT
(MODIFICATION)
1,000

1,500

500

Peak estimate: 440
6/30/14 estimate: 0
6/30/14 program participation: 0

250

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

1,000

Program Participation

500

1,500

500

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

SECOND MORTGAGE REFINANCE PROGRAM
(SECOND-LIEN REDUCTION)

1,000

Peak estimate: 14,100
6/30/14 estimate: 14,100
6/30/14 program participation: 12,478

9,000

750

Peak estimate: 680
6/30/14 estimate: 0
6/30/14 program participation: 0

Peak estimate: 800
6/30/14 estimate: 800
6/30/14 program participation: 0

500
250

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. North Carolina Housing Finance Agency, Proposal, 7/23/2010; Treasury and North Carolina
Housing Finance Agency, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 8/23/2010; North Carolina Housing Finance Agency, first through seventh Amendment[s] to
Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 5/25/2011, 1/25/2012, 8/9/2013, and 12/12/2013; North Carolina Housing Finance Agency, Hardest Hit Fund & Performance Reporting,
Quarterly Performance Reports Q3 2010 - Q2 2014, no date; Treasury, response to SIGTARP data call, 10/7/2013.

211

212

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Ohio’s HHF Programs

Treasury obligated $570,395,099 of HHF funds to Ohio.405 As of June 30, 2014,
lvi
the state had drawn down $404.9 million (71%) of those funds.406, As of June
30, 2014, the most recent data available, Ohio had spent $307.9 million (54%
of its obligated funds) to help 20,316 individual homeowners with its HHF
lvii
programs.407, The remaining $38.8 million (7%) was spent on administrative
lviii
expenses, and $59.4 million (10%) is held as cash-on-hand.408, As of June 30,
2014, the state had eight active HHF programs: four to modify homeowners’
mortgages, a fifth to provide past-due payment assistance to homeowners, a sixth to
provide unemployment assistance to homeowners, a seventh to provide transition
assistance to homeowners and an eighth to demolish vacant properties. Under this
program, Ohio has spent $130,100 and demolished and removed 14 properties.
Ohio’s HFA stopped accepting new applications after April 30, 2014.409 At the end
of 2010, Ohio estimated that it would help as many as 63,485 homeowners with
HHF but, as of June 30, 2014, reduced that peak estimate by 35%, to 41,201.
Figure 4.30 shows, in aggregate, the number of homeowners estimated to
participate in Ohio’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of
June 30, 2014. Because homeowners may participate in more than one program,
the reported program participation numbers are higher than the total number of
individual homeowners assisted. Figure 4.31 shows the number of homeowners
estimated to participate in each of Ohio’s programs (estimated program
participation) and the reported number of homeowners who participated in each of
Ohio’s programs (program participation), as of June 30, 2014.

lvi Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Ohio had

drawn down $439.9 million.
lvii A
 ccording to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
lviii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.30

OHIO ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
80,000

Peak estimate: 63,485
6/30/2014 estimate: 41,201
6/30/2014 program participation: 33,072
Homeowners assisted: 20,316

70,000
60,000
50,000
40,000
30,000
20,000
10,000
0

Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program. For its “Blight Elimination Program” (Demolition), Ohio estimated a
number of blighted properties proposed to be eliminated. This number is not included in the aggregate
estimate of all programs because it refers to properties and not homeowners.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Ohio Homeowner Assistance LLC, Proposal [revised], 4/11/2011;
Treasury and Ohio Homeowner Assistance LLC, Commitment to Purchase Financial Instrument and
HFA Participation Agreement, 9/23/2010; Ohio Homeowner Assistance LLC, first through tenth
Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 3/31/2011, 12/8/2011,
12/14/2012, 3/22/2013, 8/28/2013, 12/12/2013, and 2/27/2014; Ohio Homeowner Assistance
LLC, Save the Dream Ohio: Quarterly Reports, Quarterly Performance Reports Q4 2010 - Q2 2014, no
date; Treasury, response to SIGTARP data call, 10/7/2013.

213

214

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.31

OHIO ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
RESCUE PAYMENT ASSISTANCE PROGRAM
Peak estimate: 21,000
(PAST-DUE PAYMENT)
25,000

6/30/14 estimate: 21,000
6/30/14 program participation: 17,115

MORTGAGE PAYMENT ASSISTANCE PROGRAM
(UNEMPLOYMENT)
50,000

20,000

40,000

15,000

30,000

10,000

20,000

5,000

10,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

MODIFICATION WITH CONTRIBUTION ASSISTANCE
PROGRAM (MODIFICATION)

6,000

6,000

5,000

3,000
1,500

3,000
2,000
1,000
0

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

TRANSITION ASSISTANCE PROGRAM
(TRANSITION)
5,000

Peak estimate: 2,350
6/30/14 estimate: 1,150
6/30/14 program participation: 871

4,000

Peak estimate: 6,400
6/30/14 estimate: 1,300
6/30/14 program participation: 999

0

6,000

Program Participation

LIEN ELIMINATION ASSISTANCE (MODIFICATION)

7,500

4,500

Peak estimate: 31,900
6/30/14 estimate: 15,500
6/30/14 program participation: 12,525

Peak estimate: 4,900
6/30/14 estimate: 63
6/30/14 program participation: 63

HOMEOWNERSHIP RETENTION ASSISTANCE
(MODIFICATION)
6,000
5,000

4,000

4,000

3,000

3,000

2,000

2,000

1,000

1,000

0

Program Participation

Peak estimate: 3,100
6/30/14 estimate: 1,738
6/30/14 program participation: 1,289

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

OHIO ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014 (CONTINUED)
HOMEOWNER STABILIZATION ASSISTANCE
PROGRAM (MODIFICATION)
6,000
5,000
4,000
3,000
2,000

SHORT REFINANCE PROGRAM
(TRANSITION)
10,000

Peak estimate: 900
6/30/14 estimate: 450
6/30/14 program participation: 210

8,000

Peak estimate: 6,500
6/30/14 estimate: 0
6/30/14 program participation: 0

6,000
4,000
2,000

1,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

NEIGHBORHOOD INITIATIVE PROGRAM
(DEMOLITION)
10,000
8,000
6,000

6/30/14 blighted homes proposed to be eliminated: 5,000
6/30/14 actual blighted homes eliminated: 14

4,000
2,000
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range. For its “Blight Elimination Program” (Demolition), Ohio estimated a number of
blighted properties proposed to be eliminated. This number is not included in the aggregate estimate of all programs because it refers to properties and not homeowners.
Sources: States provide estimates for program participation and report program participation numbers. Ohio Homeowner Assistance LLC, Proposal, 8/3/2010; Treasury and Ohio Homeowner
Assistance LLC, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 9/23/2010; Ohio Homeowner Assistance LLC, first through tenth Amendment[s] to Agreement[s],
9/23/2010, 9/29/2010, 12/16/2010, 3/31/2011, 12/8/2011, 12/14/2012, 3/22/2013, 8/28/2013, 12/12/2013, and 2/27/2014; Ohio Homeowner Assistance LLC, Save the Dream Ohio:
Quarterly Reports, Quarterly Performance Reports Q4 2010 - Q2 2014, no date; Treasury, response to SIGTARP data call, 10/7/2013.

215

216

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Oregon’s HHF Programs

Treasury obligated $220,042,786 of HHF funds to Oregon.410 As of June 30, 2014,
lix
the state had drawn down $188.7 million (86%) of those funds.411, As of June
30, 2014, the most recent data available, Oregon had spent $153 million (70%
lx
of its obligated funds) to help 10,505 individual homeowners.412, The remaining
$31.4 million (14%) was spent on administrative expenses, and $15.7 million (7%)
lxi
is held as cash-on-hand.413, As of June 30, 2014, the state had four active HHF
programs: two to modify homeowners’ mortgages, a third to provide unemployment
assistance to homeowners, and a fourth to provide past-due payment assistance to
homeowners. Oregon stopped accepting new applications after June 30, 2014.414
As of March 31, 2014, Oregon estimated that it would help as many as 15,280
homeowners with HHF but, as of June 30, 2014, had decreased that estimate to
15,150.415
Figure 4.32 shows, in aggregate, the number of homeowners estimated to
participate in Oregon’s programs (estimated program participation), the reported
number of homeowners who participated in one or more programs (program
participation), and the total number of individual homeowners assisted, as of
June 30, 2014. Because homeowners may participate in more than one program,
the reported program participation numbers are higher than the total number of
individual homeowners assisted. Figure 4.33 shows the number of homeowners
estimated to participate in each of Oregon’s programs (estimated program
participation) and the reported number of homeowners who participated in each of
Oregon’s programs (program participation), as of June 30, 2014.

lix Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Oregon had

drawn down $188.7 million.
lx A
 ccording to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
lxi Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.32

OREGON ESTIMATED PROGRAM PARTICIPATION, PROGRAM
PARTICIPATION, AND INDIVIDUAL HOMEOWNERS ASSISTED, IN ALL
HHF PROGRAMS, AS OF 6/30/2014
20,000

Peak estimate: 15,280
6/30/2014 estimate: 15,150
6/30/2014 program participation: 13,751
Homeowners assisted: 10,505

15,000

10,000

5,000

0
Q110
Q1’10 Q210
Q2’10 Q310
Q3’10 Q410
Q4’10 Q111
Q1’11 Q211
Q2’11 Q311
Q3’11 Q411
Q4’11 Q112
Q1’12 Q212
Q2’12 Q312
Q3’12 Q412
Q4’12 Q113
Q1’13 Q213
Q2’13 Q310
Q3’13 Q413
Q4’13 Q114
Q1’14 Q214
Q2’14

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. Oregon Affordable Housing Assistance Corporation, Proposal, no
date; Treasury and Oregon Affordable Housing Assistance Corporation, Commitment to Purchase
Financial Instrument and HFA Participation Agreement, 8/3/2010; Oregon Affordable Housing
Assistance Corporation, first through fifteenth Amendment[s] to Agreement[s], 9/23/2010,
9/29/2010, 12/16/2010, 3/31/2011, 5/25/2011, 9/28/2011, 12/8/2011, 3/29/2012,
7/17/2012, 2/6/2013, 4/25/2013, 6/6/2013, 8/28/2013, 2/27/2014, and 6/11/2014; Oregon
Affordable Housing Assistance Corporation, Oregon Homeownership Stabilization Initiative, Reporting,
Quarterly Performance Reports Q2 2011 - Q2 2014, no date.

217

218

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.33

OREGON ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
LOAN MODIFICATION ASSISTANCE PROGRAM
(MODIFICATION)
6,000
5,000
4,000

Peak estimate: 2,600
6/30/14 estimate: 0
6/30/14 program participation: 0

MORTGAGE PAYMENT ASSISTANCE PROGRAM
(UNEMPLOYMENT)
12,000
9,000

3,000

6,000

2,000

3,000

1,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

5,000

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

LOAN PRESERVATION ASSISTANCE PROGRAM
(PAST-DUE PAYMENT)
6,000

Peak estimate: 4,000
6/30/14 estimate: 3,900
6/30/14 program participation: 3,530

5,000
4,000
3,000

2,000

2,000

1,000

1,000
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

LOAN REFINANCE ASSISTANCE PROGRAM
(MODIFICATION)
375

Peak estimate: 2,515
6/30/14 estimate: 0
6/30/14 program participation: 0

6,000

3,000

0

Program Participation

TRANSITION ASSISTANCE PROGRAM
(TRANSITION)

4,000

500

Peak estimate: 11,000
6/30/14 estimate: 11,000
6/30/14 program participation: 10,042

15,000

Peak estimate: 330
6/30/14 estimate: 200
6/30/14 program participation: 133

REBUILDING AMERICAN HOMEOWNERSHIP
ASSISTANCE PILOT PROJECT (MODIFICATION)
Peak estimate: 50
6/30/14 estimate: 50
6/30/14 program participation: 46

200
150

250

100

125

50

0

Program Participation

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. Oregon Affordable Housing Assistance Corporation, Proposal, no date; Treasury and Oregon
Affordable Housing Assistance Corporation, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 8/3/2010; Oregon Affordable Housing Assistance Corporation, first through
fifteenth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 3/31/2011, 5/25/2011, 9/28/2011, 12/8/2011, 3/29/2012, 7/17/2012, 2/6/2013, 4/25/2013, 6/6/2013,
8/28/2013, 2/27/2014, and 6/11/2014; Oregon Affordable Housing Assistance Corporation, Oregon Homeownership Stabilization Initiative, Reporting, Quarterly Performance Reports Q2 2011 - Q2
2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Rhode Island’s HHF Program

Treasury obligated $79,351,573 of HHF funds to Rhode Island.416 As of June 30,
lxii
2014, the state had drawn down 100% of those funds.417, As of June 30, 2014,
the most recent data available, Rhode Island had spent $59.5 million (75% of its
lxiii
obligated funds) to help 3,075 individual homeowners with its HHF programs.418,
The remaining $7.8 million (10%) was spent on administrative expenses, and $12.5
lxiv
million (16%) is held as cash-on-hand.419, As of June 30, 2014, the state had five
HHF programs: two to modify homeowners’ mortgages (one of which includes
principal reduction assistance), a third to provide past-due payment assistance to
homeowners, a fourth to provide transition assistance to homeowners, and a fifth
to provide unemployment assistance to homeowners. According to Treasury, Rhode
Island stopped accepting new applications from struggling homeowners seeking
lxv
help from their HHF programs submitted after January 31, 2013.420, At the end of
2010, Rhode Island estimated that it would help as many as 13,125 homeowners
with HHF but, as of June 30, 2014, reduced that peak estimate by 74%, to 3,413.
Figure 4.34 shows, in aggregate, the number of homeowners estimated to
participate in Rhode Island’s programs (estimated program participation), the
reported number of homeowners who participated in one or more programs
(program participation), and the total number of individual homeowners assisted,
as of June 30, 2014. Because homeowners may participate in more than one
program, the reported program participation numbers are higher than the total
number of individual homeowners assisted. Figure 4.35 shows the number
of homeowners estimated to participate in each of Rhode Island’s programs
(estimated program participation) and the reported number of homeowners who
participated in each of Rhode Island’s programs (program participation), as of June
30, 2014.

lxii Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Rhode Island
had drawn down 100% of its obligated funds.
lxiii According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in

HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
lxiv Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.
lxv A
 ccording to Treasury, Rhode Island is no longer accepting applications for assistance from homeowners because it determined that
its allocated HHF funds would be spent on homeowners who already have been approved for HHF assistance.

219

220

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.34

RHODE ISLAND ESTIMATED PROGRAM PARTICIPATION,
PROGRAM PARTICIPATION, AND INDIVIDUAL HOMEOWNERS
ASSISTED, IN ALL HHF PROGRAMS, AS OF 6/30/2014
15,000
Peak estimate: 13,125
6/30/2014 estimate: 3,413
6/30/2014 program participation: 3,339
Homeowners assisted: 3,075

12,000

9,000

6,000

3,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers
may have double-counted individual homeowners who received assistance from more
than one program in states that have more than one program.
Sources: States provide estimates for program participation and report program
participation and homeowners assisted numbers. Rhode Island Housing and Mortgage
Finance Corporation, Proposal, 5/27/2010 and (amended) 7/22/2010; Treasury and
Rhode Island Housing and Mortgage Finance Corporation, Commitment to Purchase
Financial Instrument and HFA Participation Agreement, 8/3/2010; Rhode Island Housing
and Mortgage Finance Corporation, first through ninth Amendment[s] to Agreement[s],
9/23/2010, 9/29/2010, 12/16/2010, 5/25/2011, 1/25/2012, 3/29/2012,
12/14/2012, 7/17/2013, and 1/31/2014; Rhode Island Housing and Mortgage Finance
Corporation, Hardest Hit Fund – Rhode Island, About HHFRI, Reports, Quarterly
Performance Reports Q4 2010 - Q2 2014, no date; Treasury, response to SIGTARP data
call, 10/7/2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.35

RHODE ISLAND ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION, BY
PROGRAM, AS OF 6/30/2014
LOAN MODIFICATION ASSISTANCE PROGRAM
(MODIFICATION)
3,500
3,000
2,500
2,000

Peak estimate: 3,500
6/30/14 estimate: 477
6/30/14 program participation: 467

TEMPORARY AND IMMEDIATE HOMEOWNER
ASSISTANCE (PAST-DUE PAYMENT)
3,000
2,000

1,500

1,500

1,000

1,000

500

500

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

MOVING FORWARD ASSISTANCE (TRANSITION)
1,000

Peak estimate: 2,750
6/30/14 estimate: 681
6/30/14 program participation: 667

2,500

Peak estimate: 875
6/30/14 estimate: 70
6/30/14 program participation: 65

750

MORTGAGE PAYMENT ASSISTANCE –
UNEMPLOYMENT (UNEMPLOYMENT)
6,000

Peak estimate: 6,000
6/30/14 estimate: 2,153
6/30/14 program participation: 2,112

5,000
4,000

500

Program Participation

3,000
2,000

250

1,000
0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

PRINCIPAL REDUCTION PROGRAM (MODIFICATION)
200
150

Peak estimate: 100
6/30/14 estimate: 32
6/30/14 program participation: 28

100
50
0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. Rhode Island Housing and Mortgage Finance Corporation, Proposal, 5/27/2010 and (amended)
7/22/2010; Treasury and Rhode Island Housing and Mortgage Finance Corporation, Commitment to Purchase Financial Instrument and HFA Participation Agreement, 8/3/2010; Rhode Island Housing
and Mortgage Finance Corporation, first through ninth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 5/25/2011, 1/25/2012, 3/29/2012, 12/14/2012, 7/17/2013, and
1/31/2014; Rhode Island Housing and Mortgage Finance Corporation, Hardest Hit Fund – Rhode Island, About HHFRI, Reports, Quarterly Performance Reports Q4 2010 - Q2 2014, no date; Treasury,
response to SIGTARP data call, 10/7/2013.

221

222

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

South Carolina’s HHF Programs

Even though Treasury obligated $295,431,547 of HHF funds to South Carolina,
South Carolina is not getting a significant amount of these funds out the door to
help homeowners with HHF.421 As of June 30, 2014, the state had drawn down
lxvi
$137.5 million (47%) of those funds.422, As of June 30, 2014, the most recent
data available, South Carolina had spent $109.6 million (37% of its obligated
lxvii
funds) to help 7,956 individual homeowners with its HHF programs.423, The
remaining $20.3 million (7%) was spent on administrative expenses, and $8.1
lxviii
million (3%) is held as cash-on-hand.424, As of June 30, 2014, the state had four
active HHF programs: one to provide unemployment assistance to homeowners,
a second to provide past-due payment assistance to homeowners, a third to
modify homeowners’ mortgages, and a fourth to provide transition assistance to
homeowners. South Carolina ended its program to provide second-lien reduction
assistance to homeowners. At the end of 2010, South Carolina estimated that it
would help as many as 34,100 homeowners with HHF but, as of June 30, 2014,
reduced that peak estimate by 43%, to 19,400.
Figure 4.36 shows, in aggregate, the number of homeowners estimated to
participate in South Carolina’s programs (estimated program participation), the
reported number of homeowners who participated in one or more programs
(program participation), and the total number of individual homeowners assisted,
as of June 30, 2014. Because homeowners may participate in more than one
program, the reported program participation numbers are higher than the total
number of individual homeowners assisted. Figure 4.37 shows the number
of homeowners estimated to participate in each of South Carolina’s programs
(estimated program participation) and the reported number of homeowners who
participated in each of South Carolina’s programs (program participation), as of
June 30, 2014.

lxvi T
 reasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, South

Carolina had drawn down $150 million.
lxvii According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in
HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
lxviii Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn
from Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien
recoveries and borrower remittances.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.36

SOUTH CAROLINA ESTIMATED PROGRAM PARTICIPATION,
PROGRAM PARTICIPATION, AND INDIVIDUAL HOMEOWNERS
ASSISTED, IN ALL HHF PROGRAMS, AS OF 6/30/2014
35,000

30,000

25,000

20,000

15,000

10,000

Peak estimate: 34,100
6/30/2014 estimate: 19,400
6/30/2014 program participation: 12,261
Homeowners assisted: 7,956

5,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Program Participation
Notes: Estimated includes highest estimate of a range. Program participation numbers may have
double-counted individual homeowners who received assistance from more than one program in states
that have more than one program.
Sources: States provide estimates for program participation and report program participation and
homeowners assisted numbers. SC Housing Corp., Proposal, 6/1/2010; Treasury and SC Housing
Corp., Commitment to Purchase Financial Instrument and HFA Participation Agreement, 8/3/2010; SC
Housing Corp., first through sixth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010,
12/16/2010, 8/31/2011, 11/15/2012, and 10/30/2013; SC Housing Corp., SC HELP, Reports,
Quarterly Performance Reports Q1 2011 - Q2 2014, no date.

223

224

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.37

SOUTH CAROLINA ESTIMATED PROGRAM PARTICIPATION VS. PROGRAM PARTICIPATION,
BY PROGRAM, AS OF 6/30/2014
MONTHLY PAYMENT ASSISTANCE PROGRAM
Peak estimate: 14,000
(UNEMPLOYMENT)
15,000

6/30/14 estimate: 6,000
6/30/14 program participation: 4,408

DIRECT LOAN ASSISTANCE PROGRAM
(PAST-DUE PAYMENT)

12,000

12,000

9,000

9,000

6,000

6,000

3,000

3,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

5,000
4,000

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

HAMP ASSISTANCE PROGRAM
(MODIFICATION)
6,000

Peak estimate: 6,000
6/30/14 estimate: 0
6/30/14 program participation: 0

5,000
4,000
3,000
2,000

1,000

1,000

0

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Program Participation

SECOND MORTGAGE ASSISTANCE PROGRAM
(SECOND-LIEN REDUCTION)
4,000

Peak estimate: 6,000
6/30/14 estimate: 400
6/30/14 program participation: 172

6,000

2,000

5,000

Program Participation

PROPERTY DISPOSITION ASSISTANCE PROGRAM
(TRANSITION)

3,000

6,000

Peak estimate: 11,000
6/30/14 estimate: 9,500
6/30/14 program participation: 7,680

15,000

Peak estimate: 2,600
6/30/14 estimate: 0
6/30/14 program participation: 0

MODIFICATION ASSISTANCE PROGRAM
(MODIFICATION)
6,000
5,000

Peak estimate: 3,500
6/30/14 estimate: 3,500
6/30/14 program participation: 1

4,000

3,000

3,000

2,000

2,000

1,000

1,000

0

Program Participation

0
Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

State Estimated Program Participation

Q1’10 Q2’10 Q3’10 Q4’10 Q1’11 Q2’11 Q3’11 Q4’11 Q1’12 Q2’12 Q3’12 Q4’12 Q1’13 Q2’13 Q3’13 Q4’13 Q1’14 Q2’14

Program Participation

State Estimated Program Participation

Program Participation

Notes: Programs may have been started or ended at different times. Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and report program participation numbers. SC Housing Corp., Proposal, 6/1/2010; Treasury and SC Housing Corp., Commitment to
Purchase Financial Instrument and HFA Participation Agreement, 8/3/2010; SC Housing Corp, first through sixth Amendment[s] to Agreement[s], 9/23/2010, 9/29/2010, 12/16/2010, 8/31/2011,
11/15/2012, and 10/30/2013; SC Housing Corp., SC HELP, Reports, Quarterly Performance Reports Q1 2011 - Q2 2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Tennessee’s HHF Program

Treasury obligated $217,315,593 of HHF funds to Tennessee.425 As of June 30,
2014, the state had drawn down $127.3 million (59%) of those funds and spent
lxix lxx
$108 million (50%) to help 6,575 individual homeowners.426, , The remaining
$15.1 million (7%) was spent on administrative expenses, and $4.5 million (2%) is
lxxi
held as cash-on-hand.427, As of June 30, 2014, the state had one HHF program,
to provide unemployment assistance to homeowners. As of September 30,
2014, Tennessee has stopped accepting new applications.428 At the end of 2011,
Tennessee estimated that it would provide HHF unemployment assistance to as
many as 13,500 homeowners with HHF but, as of June 30, 2014, reduced that
peak estimate by 43%, to 7,700. As of June 30, 2014, Tennessee had provided HHF
unemployment assistance to 6,575 homeowners.
Figure 4.38 shows the number of homeowners estimated to participate in
Tennessee’s program and the number of homeowners who have been assisted, as of
June 30, 2014.

lxix T
 reasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Tennessee

had drawn down $150.6 million.
lxx According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in HHF
programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they capture
and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner assistance,
cash-on-hand, or undrawn funds.
lxxi Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn from
Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien recoveries and
borrower remittances.

225

226

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.38

TENNESSEE’S HARDEST HIT FUND PROGRAM (UNEMPLOYMENT)
ESTIMATED PROGRAM PARTICIPATION AND HOMEOWNERS
ASSISTED, AS OF 6/30/2014
15,000

12,000

9,000

6,000

Peak estimate: 13,500
6/30/2014 estimate: 7,700
6/30/2014 program participation: 6,575
Homeowners assisted: 6,575

3,000

0
Q1’10
Q110 Q2’10
Q210 Q3’10
Q310 Q4’10
Q410 Q1’11
Q111 Q2’11
Q211 Q3’11
Q311 Q4’11
Q411 Q1’12
Q112 Q2’12
Q212 Q3’12
Q312 Q4’12
Q412 Q1’13
Q113 Q2’13
Q213 Q3’13
Q313 Q4’13
Q413 Q1’14
Q114 Q2’14
Q214

State Estimated Program Participation

Homeowners Assisted

Notes: Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and homeowners assisted numbers.
Tennessee Housing Development Agency, Proposal, 9/1/2010; Treasury and Tennessee Housing
Development Agency, Commitment to Purchase Financial Instrument and HFA Participation Agreement,
9/23/2010; Tennessee Housing Development Agency, first through eighth Amendment[s] to
Agreement[s], 9/29/2010, 12/16/2010, 5/25/2011, 9/28/2011, 12/8/2011, 5/3/2012,
11/15/2012, and 6/11/2014; Tennessee Housing Development Agency, Keep My Tennessee Home,
Reports, Quarterly Performance Reports Q1 2011 - Q2 2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Washington, DC’s HHF Program

Treasury obligated $20,697,198 of HHF funds to Washington, DC.429 As of
June 30, 2014, Washington, DC had drawn down $18.2 million (88%) of those
lxxii
funds.430, As of June 30, 2014, the most recent data available, Washington,
DC had spent $12.7 million (62% of its obligated funds) to help 696 individual
lxxiii
homeowners.431, The remaining $2.9 million (14%) was spent on administrative
lxxiv
expenses and $2.9 million (14%) is held as cash-on-hand.432, As of June 30, 2014,
Washington, DC had one HHF program, to provide unemployment assistance to
homeowners. At the end of 2010, Washington, DC estimated that it would provide
HHF unemployment assistance to as many as 1,000 homeowners with HHF
but, as of June 30, 2014, reduced that peak estimate by 20%, to 800. As of June
30, 2014, Washington, DC had provided HHF unemployment assistance to 696
homeowners. Washington, DC stopped accepting new applications after November
22, 2013.433
Figure 4.39 shows the number of homeowners estimated to participate in
Washington, DC’s program and the number of homeowners who have been
assisted, as of June 30, 2014.

lxxii Treasury has separately published September 30, 2014, figures for amounts drawn down; as of September 30, 2014, Washington,
DC had drawn down $18.2 million.
lxxiii According to Treasury, committed program funds are funds committed to homeowners who have been approved to participate in
HHF programs that are anticipated to be disbursed over the duration of their participation; states vary as to when and how they
capture and report funds as committed. HHF funds committed for homeowner assistance are recorded variously as homeowner
assistance, cash-on-hand, or undrawn funds.
lxxiv Figures obtained from each state’s Quarterly Financial Report, which reconciles each type of cash disbursement to funds drawn
from Treasury. As such, all expenses are based on actual cash disbursements. Additionally, cash-on-hand may include lien
recoveries and borrower remittances.

227

228

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.39

WASHINGTON, DC’S HOMESAVER PROGRAM (UNEMPLOYMENT)
ESTIMATED PROGRAM PARTICIPATION AND HOMEOWNERS
ASSISTED, AS OF 6/30/2014
1,000

800

600

Peak estimate: 1,000
6/30/2014 estimate: 800
6/30/2014 program participation: 696
Homeowners assisted: 696

400

200

0
Q110
Q1’10 Q210
Q2’10 Q310
Q3’10 Q410
Q4’10 Q111
Q1’11 Q211
Q2’11 Q311
Q3’11 Q411
Q4’11 Q112
Q1’12 Q212
Q2’12 Q312
Q3’12 Q412
Q4’12 Q113
Q1’13 Q213
Q2’13 Q313
Q3’13 Q413
Q4’13 Q114
Q1’14 Q214
Q2’14

State Estimated Program Participation

Homeowners Assisted

Notes: Estimated includes highest estimate of a range.
Sources: States provide estimates for program participation and homeowners assisted numbers.
District of Columbia Housing Finance Agency, Proposal, 9/1/2010; Treasury and District of Columbia
Housing Finance Agency, Commitment to Purchase Financial Instrument and HFA Participation
Agreement, 9/23/2010; District of Columbia Housing Finance Agency, first through eighth
Amendment[s] to Agreement[s], 9/29/2010, 12/16/2010, 3/31/2011, 5/25/2011, 10/28/2011,
3/29/2012, 12/14/2012, and 9/20/2013; District of Columbia Housing Finance Agency,
HomeSaver – A Foreclosure Prevention Program, Quarterly Performance Reports Q1 2011 - Q2
2014, no date.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FHA Short Refinance Program
On March 26, 2010, Treasury and HUD announced the FHA Short Refinance
program, which gives homeowners the option of refinancing an underwater, nonFHA-insured mortgage into an FHA-insured mortgage at 97.75% of the home’s
value. A homeowner current on the existing first-lien mortgage not insured by FHA
on a primary residence or having made three successful trial period payments;
in a negative equity position qualifies under standard FHA underwriting and
credit score requirements. Treasury reduced TARP funds allocated to provide loss
protection to FHA through a $1 billion for 10 years (October 2020) letter of credit,
plus up to $25 million in fees for the letter of credit.434 FHA Short Refinance is
voluntary for servicers. Therefore, not all underwater homeowners who qualify may
be able to participate in the program.435 As of September 30, 2014, according to
Treasury, 4,963 loans had been refinanced under the program.436 As of September
30, 2014, Treasury has paid $47,840 on one claim for one default under the
program; however, it is possible that more loans have defaulted but FHA has not
yet evaluated the claims.437 Treasury has deposited $50 million into a reserve
account for future claims.438 It has also spent approximately $9.7 million on
administrative expenses associated with the letter of credit.439
Servicers must review the current a third-party appraisal by a HUD-approved
appraiser. The homeowner is then reviewed for credit risk and, if necessary, referred
for a review to confirm that the homeowner’s total monthly mortgage payments on
all liens after the refinance is not greater than 31% of the homeowner’s monthly
gross income and the homeowner’s total household debt is not greater than 50%.440
Next, the lien holders must forgive principal that is more than 115% of the value
of the home. The first-lien lender must forgive at least 10% of principal balance of
the first-lien loan, in exchange for a cash payment for 97.75% of the current home
value from the proceeds of the refinance. The lender may maintain a subordinate
second lien for up to 17.25% of that value.441
If a homeowner defaults, the letter of credit purchased by Treasury
compensates the investor for a first percentage of losses covering approximately
4.38% – 18.85% of the unpaid principal balance with FHA responsible for the
remaining losses.442 Treasury’s letter of credit ended on June 1, 2013. This leaves
FHA solely responsible for covering any losses for mortgages originated on or after
June 1, 2013, through September 30, 2014.443

For more information concerning
FHA Short Refinance eligibility, see
SIGTARP’s April 2011 Quarterly
Report, pages 85-87.

229

230

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FINANCIAL INSTITUTION SUPPORT PROGRAMS

Treasury created six TARP programs through which it made capital investments
or asset guarantees in exchange for equity in participating financial institutions.
Three of the programs, the Capital Purchase Program (“CPP”), the Community
Development Capital Initiative (“CDCI”), and the Capital Assistance Program
(“CAP”), were open to all qualifying financial institutions. The other three, the
Systemically Significant Failing Institutions (“SSFI”) program, the Targeted
Investment Program (“TIP”), and the Asset Guarantee Program (“AGP”), were
available on a case-by-case basis to institutions that needed assistance beyond that
available through CPP. With the expiration of TARP funding authorization, no new
investments can be made through these six programs.

Capital Purchase Program

Subchapter S Corporations
(“S corporations”): Corporate form
that passes corporate income, losses,
deductions, and credit through to
shareholders for Federal tax purposes.
Shareholders of S corporations report
the flow-through of income and losses
on their personal tax returns and are
taxed at their individual income tax
rates.
Subordinated Debentures: Form of debt
security that ranks below other loans
or securities with regard to claims on
assets or earnings.

For discussion of SIGTARP’s
recommendations on TARP exit paths
for community banks, see SIGTARP’s
October 2011 Quarterly Report,
pages 167-169.
For discussion of SIGTARP’s
recommendations issued on October
9, 2012, regarding CPP preferred
stock auctions, see SIGTARP’s
October 2012 Quarterly Report,
pages 180-183.

Treasury’s stated goal for CPP was to invest in “healthy, viable institutions” as a
way to promote financial stability, maintain confidence in the financial system, and
enable lenders to meet the nation’s credit needs.444 CPP was a voluntary program
open by application to qualifying financial institutions, including U.S.-controlled
banks, savings associations, and certain bank and savings and loan holding
companies.445
Under CPP, Treasury used TARP funds predominantly to purchase preferred
equity interests in the financial institutions. The institutions issued Treasury senior
preferred shares that pay a 5% annual dividend for the first five years and a 9%
annual dividend thereafter. Subchapter S corporations (“S corporations”) paid an
initial rate of 7.7%, that increases to 13.8%. Rate increases began in the quarter
ended December 31, 2013.
In addition to the senior preferred shares, publicly traded institutions issued
Treasury warrants to purchase common stock with an aggregate market price equal
to 15% of the senior preferred share investment.446 Privately held institutions issued
warrants to Treasury to purchase additional senior preferred stock worth 5% of
Treasury’s initial preferred stock investment.447 According to Treasury, through CPP,
in total Treasury purchased $204.9 billion in preferred stock and subordinated
debentures from 707 institutions in 48 states, the District of Columbia, and Puerto
Rico.448

Status of Program
As of September 30, 2014, 77 of the 707 institutions remained in CPP; in 34 of
them, Treasury holds only warrants to purchase stock. Treasury does not consider
these 34 institutions to be in TARP, however Treasury applies all proceeds from
the sale of warrants in these banks to recovery amounts in TARP’s CPP program.
As of September 30, 2014, 43 of the 77 institutions had outstanding principal
investments. Taxpayers were still owed $5.5 billion.449 According to Treasury, it had
write-offs and realized losses of $4.9 billion in the program, leaving $0.6 billion
in TARP funds outstanding. While Treasury has not yet realized those losses, it
expects that all of its investments in the banks will be lost.450

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

As of September 30, 2014, Treasury has recovered $197.2 billion of the CPP
principal (or 96.2%).451 Treasury converted $363.3 million in preferred stock for
nearly a quarter (165) of CPP bank investments into CDCI, which therefore is still
an outstanding obligation to TARP. Additionally, $2.2 billion in CPP investments in
137 banks was refinanced in 2011 into SBLF, a non-TARP Treasury program.452
However, only 253 of the 707 banks, or 36%, fully repaid CPP principal.453 Of
the other banks that exited with less than full repayment, four CPP banks merged
with other CPP banks; Treasury sold its investments in 30 banks for less than par
and sold at auction its investments in 182 banks (Treasury sold 18 of these at a
loss); and 30 institutions or their subsidiary banks failed, meaning Treasury has
lost or expects to lose its entire investment in those banks.454 Figure 4.40 shows the
status of the 707 CPP recipients as of September 30, 2014.
As of September 30, 2014, Treasury had received approximately $12.1 billion in
interest and dividends from CPP recipients. Treasury also had received $8 billion
through the sale of CPP warrants that were obtained from TARP recipients.455 For
a complete list of CPP share repurchases, see Appendix D: “Transaction Detail.”
Although the 10 largest investments accounted for $142.6 billion of the
program, CPP made many smaller investments: 311 of the 707 recipients
received less than $10 million.456 All but one of the recipients with remaining
principal investments have outstanding investments of less than $100 million,
with more than half of the banks with remaining principal investments, or 65%,
having outstanding investments of less than $10 million.457 Table 4.26 shows the
distribution of investments by amount.
TABLE 4.26

CPP INVESTMENT SIZE BY INSTITUTION, AS OF 9/30/2014
Principal
Investmenta

Outstanding
Principalb

6

0

$1 billion to $10 billion

19

0

$100 million to $1 billion

57

1

$10 million to $100 million

314

14

Less than $10 million

311

28

Total

707

43

$10 billion or more

Notes: Data based on the institutions’ total CPP investments. There are more than 30 institutions that have received multiple
transactions through CPP.
a
These numbers are based on total Treasury CPP investment since 10/28/2008.
b
Amount does not include those investments that have already been repaid, sold to a third party at a discount, merged out of the
CPP portfolio, exchanged their CPP investments for an investment under CDCI, or are related to institutions that filed for bankruptcy
protection or had a subsidiary bank fail. Figures are based on total investments outstanding. Included in those figures are the six
banks that were converted to common shares at a discount. The outstanding amount represented is the original par value of the
investment. Amount does not include the 137 banks that refinanced under SBLF. Amount does not include 34 institutions that have
repaid their CPP principal but still have warrants outstanding.
Source: Treasury, response to SIGTARP data call, 10/6/2014.

FIGURE 4.40

STATUS OF CPP RECIPIENTS,
AS OF 9/30/2014
3%

23%
1%
4%
4%
4%

19%

36%

6%

Fully Repaid Principal (253)
Remaining Principal Investment in CPP (43)
Refinanced into SBLF (137)
Refinanced into CDCI (28)
Sold for less than par (30)
Failed/subsidiary failed (30)
Merged (4)
Auction: Sold at loss (164)
Auction: Sold at profit (18)
Note: 34 banks repaid CPP principal but remain in TARP
with Treasury holding only warrants.
Source: Treasury, response to SIGTARP data call,
10/6/2014.

231

232

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

As of September 30, 2014, of the 43 banks with remaining principal
investments in CPP, 11 were in the Southeast region, eight were in the Southwest/
South Central region, eight were in the Midwest region, seven were in the
Mid-Atlantic/Northeast region, six were in the West region, and three were in
the Mountain West/Plains region. The Southeast region and the Mid-Atlantic/
Northeast region had the largest total remaining CPP investments; $348.1 billion
and $81.8 million, respectively. These regions were followed in remaining CPP
investments by the Southwest/South Central region ($348.1 million), the Midwest
region ($73.5 million), the West region ($41.4 million), and the Mountain West/
Plains region ($8 million). Table 4.27 and Figure 4.41 show the geographical
distribution of the banks that remain in CPP as of September 30, 2014, by region.
Tables 4.28–4.33 show the distribution by state.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.27

BANKS WITH CPP PRINCIPAL REMAINING, BY REGION, AS OF 9/30/2014
Banks with
Remaining
Principal

Principal
Investment
Remaining

Number of Banks
with Missed
Dividend/Interest
Payments

Value of Missed
Dividend/Interest
Payments

West

6

$41,356,000

5

$5,907,246

Mountain West/Plains

3

7,976,000

2

1,588,395

Southwest/South Central

8

66,529,000

7

9,471,725

Midwest

8

73,477,000

6

14,375,286

Mid-Atlantic/Northeast

7

81,845,000

6

13,657,898

Southeast

11

348,057,602

9

28,403,440

Total

43

$619,240,602

35

$73,403,989

FIGURE 4.41

AMOUNT OF CPP PRINCIPAL INVESTMENT REMAINING, BY REGION,
AS OF 9/30/2014
AK

MOUNTAIN WEST/
PLAINS
$8 MILLION

WA

MT

OR
ID

WEST
$41 MILLION
CA

HI

NV

ND

WY

MN

AZ

WI

SD

CO

IL

KS
OK

NM

MO

AR

NY
OH

IN

PA
WV VA

KY

NH
MA
CT RI
NJ
DE
MD

NC

TN
MS AL

TX

MID-ATLANTIC/
NORTHEAST
VT ME $82 MILLION

MI

IA

NE
UT

MIDWEST
$73 MILLION

SC
GA

SOUTHEAST
$348 MILLION

LA
FL

SOUTHWEST/
SOUTH CENTRAL
$67 MILLION

WEST
MOUNTAIN WEST/PLAINS
SOUTHWEST/SOUTH CENTRAL

MIDWEST
MID-ATLANTIC/NORTHEAST
SOUTHEAST

PR

233

234

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

West
TABLE 4.28

BANKS WITH CPP PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014
Principal
Investment
Remaining

AK

0

$0

0

$0

CA

6

41,356,000

5

5,907,246

HI

0

0

0

0

OR

0

0

0

0

WA
AK

OR

CA

Number of Banks
with Missed
Value of Missed
Dividend/Interest Dividend/Interest
Payments
Payments

Banks with
Remaining
Principal

WA

0

0

0

0

Total

6

$41,356,000

5

$5,907,246

HI
WEST

Principal investment
remaining in CPP banks

>$100 million
$21-$100 million
$1-$20 million
$0

Mountain West/Plains
TABLE 4.29

BANKS WITH CPP PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

MT
ID
NV

WY

NE
UT

CO

MOUNTAIN WEST/
PLAINS
Principal investment
remaining in CPP banks

Principal
Investment
Remaining

CO

1

$3,076,000

1

$873,695

ID

0

0

0

0

KS

1

2,800,000

1

714,700

MT

0

0

0

0

ND

0

0

0

0

NE

0

0

0

0

NV

0

0

0

0

SD

0

0

0

0

UT

0

0

0

0

ND
SD

KS
>$100 million
$21-$100 million
$1-$20 million
$0

Number of Banks
with Missed
Value of Missed
Dividend/Interest Dividend/Interest
Payments
Payments

Banks with
Remaining
Principal

WY

1

2,100,000

0

0

Total

3

$7,976,000

2

$1,588,395

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Southwest/South Central
TABLE 4.30

BANKS WITH CPP PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

AZ

OK

NM
TX

SOUTHWEST/
SOUTH CENTRAL

AR
LA

>$100 million
$21-$100 million
$1-$20 million
$0

Principal investment
remaining in CPP banks

Number of Banks
with Missed
Value of Missed
Dividend/Interest Dividend/Interest
Payments
Payments

Banks with
Remaining
Principal

Principal
Investment
Remaining

AR

2

$37,117,000

2

$6,880,058

AZ

2

6,440,000

2

732,010

LA

1

2,400,000

1

163,500

NM

0

0

0

0

OK

0

0

0

0

TX

3

20,572,000

2

1,696,157

Total

8

$66,529,000

7

$9,471,725

Midwest
TABLE 4.31

BANKS WITH CPP PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

MN

WI

MI

IA
IL
MO

MIDWEST

Principal investment
remaining in CPP
banks

IN

OH
KY
>$100 million
$21-$100 million
$1-$20 million
$0

Number of Banks
with Missed
Value of Missed
Dividend/Interest Dividend/Interest
Payments
Payments

Banks with
Remaining
Principal

Principal
Investment
Remaining

IA

0

$0

0

$0

IL

3

23,040,000

2

5,230,581

IN

0

0

0

0

KY

2

41,300,000

2

7,792,750

MI

0

0

0

0

MN

0

0

0

0

MO

2

4,037,000

1

119,668

OH

0

0

0

0

WI

1

5,100,000

1

1,232,288

Total

8

$73,477,000

6

$14,375,286

235

236

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Mid-Atlantic/Northeast
TABLE 4.32

BANKS WITH CPP PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

NH
MA

NY

CT
NJ
DE
MD

PA
WV VA
WV

Principal
Investment
Remaining

CT

0

$0

0

$0

DE

0

0

0

0

MA

1

12,063,000

1

3,558,585

MD

5

60,343,000

4

7,763,160

ME

0

0

0

0

NH

0

0

0

0

NJ

1

9,439,000

1

2,336,153

NY

0

0

0

0

PA

0

0

0

0

RI

0

0

0

0

VA

0

0

0

0

VT

0

0

0

0

WV

0

0

0

0

Total

7

$81,845,000

6

$13,657,898

ME

VT

MID-ATLANTIC/
NORTHEAST
Principal investment
remaining in CPP banks

RI

>$100 million
$21-$100 million
$1-$20 million
$0

Number of Banks
with Missed
Value of Missed
Dividend/Interest Dividend/Interest
Payments
Payments

Banks with
Remaining
Principal

Southeast
TABLE 4.33

BANKS WITH CPP PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

MS

AL

Principal
Investment
Remaining

AL

1

$2,760,000

1

$413,655

FL

4

71,307,000

4

17,777,423

GA

2

19,680,000

2

4,487,040

MS

1

2,443,320

0

0

NC

0

0

0

0

PR

1

238,972,282

0

0

SC

2

12,895,000

2

5,725,323

TN

0

0

0

0

11

$348,057,602

9

$28,403,440

NC

TN

SC
GA
PR
FL

SOUTHEAST

Principal investment
remaining in CPP
banks

>$100 million
$21-$100 million
$1-20 million
$0

Number of Banks
with Missed
Value of Missed
Dividend/Interest Dividend/Interest
Payments
Payments

Banks with
Remaining
Principal

Total

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Dividends and Interest
As of September 30, 2014, Treasury had received $12.1 billion in dividends on its
CPP investments.458 However, as of that date, missed dividend and interest payments by 178 institutions, including banks with missed payments that no longer
have outstanding CPP principal investments, totaled approximately $516.7 million.
Approximately $33.6 million of the unpaid amounts are non-cumulative, meaning
that the institution has no legal obligation to pay Treasury unless the institution
declares a dividend.459
More than four-fifths, or 35 of the 43 banks that had remaining CPP principal
investments as of September 30, 2014, were not current on their dividend and
interest payments to Treasury.460 The 35 banks were behind by as many as 23
payments and in total were overdue in payments to Treasury of $73.4 million.461 As
of September 30, 2014, 34 of the 43 banks with remaining principal investments
were overdue by at least three payments, including 32 banks that were overdue by
at least six payments.462 Of the banks with remaining principal investments that are
not current on payments, 25 have unpaid dividend and interest payments that are
cumulative, and seven have unpaid dividend payments that are non-cumulative.
Tables 4.28–4.33 show the distribution of missed payments and value of those
payments by state.

237

238

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

CPP Dividend Rates Increase for Remaining Banks

For more on SIGTARP’s October
2011 recommendation regarding
how Treasury should treat community
banks unable to exit TARP before the
dividend rate increase, see SIGTARP’s
October 2011 Quarterly Report,
pages 167-169, and SIGTARP’s
January 2012 Quarterly Report,
pages 159-161.

Most banks with remaining principal investments have reached the five-year anniversary in CPP, at which point their dividend rate increased from 5% to 9% (some
banks structured as S corporations have had their interest rate increase from 7.7%
to 13.8%).
By the August 15, 2014, payment date, rates will increase to 9% for an
additional nine banks, of which seven are already behind on dividend payments.
Rates will increase for one more bank by November 15, 2014, and for the
remaining one bank by February 15, 2015. Table 4.34 lists the remaining banks by
date of dividend rate increase.
As of September 30, 2014, of the 43 banks with remaining principal
investments in CPP, 35 already have overdue missed dividends and interest. For
these banks, with the increase in the dividend rate, the amount overdue to Treasury
will grow more quickly. While all banks, regardless of size, received CPP on the
same terms, the one-size-fits-all repayment terms may not fit all. Because so many
of these banks are not paying the 5% dividend, an increase to 9% may not have
the intended effect of incentivizing them to exit TARP, particularly if they lack the
ability to raise capital. In October 2011, SIGTARP recommended to Treasury that
it assess whether it should renegotiate the terms of its CPP contracts for those
community banks that will not be able to exit TARP prior to the dividend rate
increase. Treasury did not implement this recommendation.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.34

CPP-RELATED DIVIDEND RATE INCREASES, AS OF 9/30/2014

Location

Investment
Date

Outstanding
Capital Amount

First BanCorp

San Juan, PR

1/16/2009

$238,972,282

FNB United Corp.

Asheboro, NC

2/13/2009

51,500,000

Institution

Value of Missed
Dividend/Interest
Payments

Number
of Missed
Dividend
Payments

$5,950,000

12

Rate Increased 2/15/2014

Porter Bancorp Inc.

Louisville, KY

11/21/2008

35,000,000

First United Corporation

Oakland, MD

1/30/2009

30,000,000

Broadway Financial Corporation

Los Angeles, CA

11/14/2008

15,000,000

Tidelands Bancshares, Inc

Mount Pleasant,
SC

12/19/2008

14,448,000

3,164,866

16

One United Bank

Boston, MA

12/19/2008

12,063,000

3,558,585

22

Cecil Bancorp, Inc.

Elkton, MD

12/23/2008

11,560,000

2,976,700

19

NCAL Bancorp

Los Angeles, CA

12/19/2008

10,000,000

1,971,250

13

Western Community Bancshares, Inc.

Palm Desert, CA

12/23/2008

7,290,000

1,834,538

17

Citizens Commerce Bancshares, Inc.

Versailles, KY

2/6/2009

6,300,000

1,842,750

20

Patapsco Bancorp, Inc.

Dundalk, MD

12/19/2008

6,000,000

1,591,500

18

Rising Sun Bancorp

Rising Sun, MD

1/9/2009

5,983,000

1,749,960

20

CalWest Bancorp

Rancho Santa
Margarita, CA

1/23/2009

4,656,000

1,108,200

16

Lone Star Bank

Houston, TX

2/6/2009

3,072,000

986,657

22

US Metro Bank

Garden Grove,
CA

2/6/2009

2,861,000

486,000

11

Goldwater Bank, N.A.

Scottsdale, AZ

Saigon National Bank

Westminster, CA

1/30/2009

2,568,000

681,000

18

12/23/2008

1,549,000

507,258

23

Calvert Financial Corporation

Ashland, MO

1/23/2009

1,037,000

119,668

7

Rate Increased 5/15/2014
Liberty Shares, Inc.

Hinesville, GA

2/20/2009

17,280,000

3,939,840

16

HCSB Financial Corporation

Loris, SC

3/6/2009

12,895,000

2,546,763

15

Farmers & Merchants Bancshares, Inc.

Houston, TX

3/6/2009

11,000,000

709,500

5

Regent Bancorp, Inc.

Davie, FL

City National Bancshares Corporation

Newark, NJ

Highlands Independent Bancshares, Inc.

Sebring, FL

Capital Commerce Bancorp, Inc.

Milwaukee, WI

Pinnacle Bank Holding Company, Inc.

Orange City, FL

Metropolitan Capital Bancorp, Inc.

Chicago, IL

3/6/2009

9,982,000

2,275,860

16

4/10/2009

9,439,000

2,336,153

19

3/6/2009

6,700,000

1,436,313

15

4/10/2009

5,100,000

1,232,288

17

3/6/2009

4,389,000

1,060,320

17

4/10/2009

4,388,000
683,498

13

Allied First Bancorp, Inc.

Oswego, IL

4/24/2009

3,652,000

St. Johns Bancshares, Inc.

St. Louis, MO

3/13/2009

3,000,000

Prairie Star Bancshares, Inc.

Olathe, KS

4/3/2009

2,800,000

714,700

18

Citizens Bank & Trust Company

Covington, LA

3/20/2009

2,400,000

163,500

5

Continued on next page

239

240

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

CPP-RELATED DIVIDEND RATE INCREASES, AS OF 9/30/2014

(CONTINUED)

Number
of Missed
Dividend
Payments

Institution

Location

Investment
Date

Outstanding
Capital Amount

Value of Missed
Dividend/Interest
Payments

CSRA Bank Corp.

Wrens, GA

3/27/2009

$2,400,000

$547,200

16

Crazy Woman Creek Bancorp, Inc.

Buffalo, WY

2/20/2009

2,100,000

8/7/2009

50,236,000

13,004,930

19

5/29/2009

19,817,000

3,164,866

7

6/5/2009

17,300,000

3,715,192

10

Rate Increased 8/15/2014
U.S. Century Bank
Chambers Bancshares, Inc.

Miami, FL
a

OneFinancial Corporationb

Danville, AR
Little Rock, AR

Suburban Illinois Bancorp, Inc.c

Elmhurst, IL

6/19/2009

15,000,000

4,547,083

14

Harbor Bankshares Corporation

Baltimore, MD

7/17/2009

6,800,000

1,445,000

17

Community Bancshares, Inc.

Kingman, AZ

7/24/2009

3,872,000

Grand Mountain Bancshares, Inc.

Granby, CO

5/29/2009

3,076,000

873,695

21

SouthFirst Bancshares, Inc.

Sylacauga, AL

6/12/2009

2,760,000

413,655

11

Hattiesburg, MS

9/25/2009

2,443,320

Fort Worth, TX

12/4/2009

6,500,000

Rate Increases 11/15/2014
Grand Financial Corporationd
Rate Increases 2/15/2015
Liberty Bancshares, Inc.

Notes: Numbers may not total due to rounding.
a
Chambers Bancshares, Inc. is an S-Corporation, so its interest rate increased from 7.7% to 13.8% on the five-year anniversary of Treasury’s investment (5/29/2009).
b
OneFinancial Corporation is an S-Corporation, so its interest rate increased from 7.7% to 13.8% on the five-year anniversary of Treasury’s investment (6/5/2009).
c
Suburban Illinois Bancorp, Inc. is an S-Corporation, so its interest rate increased from 7.7% to 13.8% on the five-year anniversary of Treasury’s investment (6/19/2009).
d
Grand Financial Corporation is an S-Corporation, so its interest rate increases from 7.7% to 13.8% on the five-year anniversary of Treasury’s investment (9/25/2009).

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Treasury’s Policy on Missed Dividend and Interest Payments

According to Treasury, it “evaluates its CPP investments on an ongoing basis with
the help of outside advisors, including external asset managers. The external asset
managers provide a valuation for each CPP investment” that results in Treasury
assigning the institution a credit score.463 For those that have unfavorable credit
scores, including any institution that has missed more than three dividend (or
interest) payments, Treasury has stated that the “asset manager dedicates more
resources to monitoring the institution and may talk to the institution on a more
frequent basis.”464
Under the terms of the preferred shares or subordinated debentures held by
Treasury as a result of its CPP investments, in certain circumstances, such as when
a participant misses six dividend (or interest) payments, Treasury has the right to
appoint up to two additional members to the institution’s board of directors.465
These directors will not represent Treasury, but rather will have the same fiduciary
duties to shareholders as all other directors. They will be compensated by the
institution in a manner similar to other directors.466
As of September 30, 2014, of the 43 institutions with remaining principal
investments, 32 CPP institutions have missed at least six payments.467 As of
September 30, 2014, Treasury had made director appointments to the boards
of directors of 16 CPP banks, as noted in Table 4.36.468 Most of those banks no
longer have remaining CPP principal investments. None of the 43 banks with
remaining principal investments have Treasury-appointed directors.
For institutions that miss five or more dividend (or interest) payments, Treasury
has stated that it would seek consent from such institutions to send observers to
the institutions’ board meetings.469 As of September 30, 2014, of the 43 CPP banks
with remaining principal investments, 34 had missed at least five payments.470
According to Treasury, the observers would be selected from its Office of Financial
Stability (“OFS”) and assigned to “gain a better understanding of the institution’s
condition and challenges and to observe how the board is addressing the
situation.”471 Their participation would be “limited to inquiring about distributed
materials, presentations, and actions proposed or taken during the meetings, as
well as addressing any questions concerning” their role.472 The findings of the
observers are taken into account when Treasury evaluates whether to appoint
individuals to an institution’s board of directors.473 As of September 30, 2014,
Treasury had assigned observers to 13 current CPP recipients, as noted in Table
4.36.474
Twelve banks have rejected Treasury’s requests to send an observer to the
institutions’ board meetings.475 The banks had initial CPP investments of as much
as $27 million, have missed as many as 23 quarterly dividend payments to Treasury,
and have been overdue in dividend payments by as much as $4.1 million.476 Five
of these banks have since been sold at a loss to Treasury at auction.477 Three of
these banks have remaining CPP principal investments, all of which continue to
have missed payments.478 At 23 missed dividend payments, Saigon National Bank,
Westminster, California, which has never made a dividend payment, has more
missed payments than any TARP bank, yet rejected Treasury’s request to send an

241

242

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

observer to its board meetings.479 Table 4.35 lists the banks that rejected Treasury
observers.
Seven of the 707 banks that received CPP investments have never made a
single dividend payment to Treasury since receiving CPP investments. Of these
seven banks, three have remaining CPP principal investments and two have exited
TARP as a result of bankruptcy. Midwest Banc Holdings, Inc., Melrose Park,
Illinois, and One Georgia Bank, Atlanta, Georgia, both exited CPP by bankruptcy.
The three remaining banks that have never made a dividend payment are: Saigon
National Bank, Westminster, California (23 missed payments); Lone Star Bank,
Houston, Texas (22); and Grand Mountain Bankshares, Granby, Colorado (21).
TABLE 4.35

CPP BANKS THAT REJECTED TREASURY OBSERVERS
CPP Principal
Investment

Number of
Missed Payments

Value of Missed
Payments

Date of Treasury
Request

Date of
Rejection

$27,000,000

—a

$—

3/11/2011

4/12/2011

Community Bankers Trust Corporation

17,680,000

—

b

—

10/18/2011

11/23/2011

White River Bancshares Company c

16,800,000

14

d

3,204,600

3/28/2012

4/27/2012

Timberland Bancorp, Inc.c

16,641,000

—e

—

6/27/2011

8/18/2011

Alliance Financial Services Inc.c

12,000,000

12f

3,020,400

3/10/2011

5/6/2011

Central Virginia Bankshares, Inc.g

11,385,000

15h

2,134,688

3/9/2011

5/18/2012

Commonwealth Business Bankc

7,701,000

10i

1,049,250

8/13/2010

9/20/2010

Pacific International Bancorpj

6,500,000

—k

—

9/23/2010

11/17/2010

Institution
Intermountain Community Bancorp

Rising Sun Bancorp

5,983,000

20

1,749,960

12/3/2010

2/28/2011

Omega Capital Corp.c

2,816,000

15l

575,588

12/3/2010

1/13/2011

Citizens Bank & Trust Company

2,400,000

5

163,500

9/23/2010

11/17/2010

Saigon National Bank

1,549,000

23

507,258

8/13/2010

9/20/2010

Notes: Numbers may not total due to rounding.
a
Bank later became current in accrued and unpaid dividends after missing the initial scheduled payment date(s). Prior to repayment, Intermountain Community Bancorp had 12 missed
payments totaling $4.1 million.
b
Bank later became current in accrued and unpaid dividends after missing the initial scheduled payment date(s). Prior to repayment, Community Bankers had seven missed payments totaling
$1.5 million.
c
Bank was sold at a loss at auction.
d
White River Bancshares Company was sold at auction and its missed payments to Treasury were not repaid.
e
Bank later became current in accrued and unpaid dividends after missing the initial scheduled payment date(s). Prior to repayment, Timberland had eight missed payments totaling $1.7
million.
f
Alliance Financial Services Inc. was sold at a loss at auction and its missed payments to Treasury were not repaid.
g
Bank accepted and then declined Treasury’s request to have a Treasury observer attend board of directors meetings.
h
Central Virginia Bankshares, Inc. was sold to C&F Financial Corporation and its missed payments to Treasury were not repaid.
i
Commonwealth Business Bank was sold at a loss at auction and its missed payments to Treasury were not repaid.
j
Bank has exited the Capital Purchase Program.
k
Bank later became current in accrued and unpaid dividends after missing the initial scheduled payment date(s). Prior to repayment, Pacific International Bancorp had 10 missed payments
totaling $0.8 million.
l
Omega Capital Corp. was sold at a loss at auction and its missed payments to Treasury were not repaid.
Source: Treasury, Dividends and Interest Report, 10/10/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

SIGTARP and Treasury do not use the same methodology to report unpaid
dividend and interest payments. For example, Treasury generally excludes
institutions from its “non-current” reporting: (i) that have completed a
recapitalization, restructuring, or exchange with Treasury (though Treasury does
report such institutions as non-current during the pendency of negotiations); (ii)
for which Treasury sold the CPP investment to a third party, or otherwise disposed
of the investment to facilitate the sale of the institution to a third party; (iii) that
filed for bankruptcy relief; or (iv) that had a subsidiary bank fail.480 SIGTARP
generally includes such activity in Table 4.36 under “Value of Unpaid Amounts”
with the value set as of the date of the bankruptcy, restructuring, or other event
that relieves the institution of the legal obligation to continue to make dividend
and interest payments. If a completed transaction resulted in payment to Treasury
for all unpaid dividends and interest, SIGTARP does not include the institution’s
obligations under unpaid amounts. As of September 30, 2014, for all CPP banks,
including those that were missing payments when they exited, 94 banks had missed
at least 10 dividend (or interest) payments and 140 banks had missed five dividend
(or interest) payments totaling $430.8 million.481 Table 4.36 lists CPP recipients
that had unpaid dividend (or interest) payments as of September 30, 2014. For
a complete list of CPP recipients and institutions making dividend or interest
payments, see Appendix D: “Transaction Detail.”

243

244

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.36

CPP-RELATED MISSED DIVIDEND AND INTEREST PAYMENTS, AS OF 9/30/2014

Company

Dividend or
Payment Type

Number
of Missed
Payments

Saigon National Bank

Non-Cumulative

23

Lone Star Bank

Non-Cumulative

22

OneUnited Bank

Interest

Grand Mountain Bancshares, Inc.

Cumulative

Observers
Assigned
to Board of
Directors1

Value of Missed
Payments2

Value of Unpaid
Amounts2,3,4

$507,258

$507,258

✓

986,657

986,657

22

✓

3,558,585

3,558,585

21

✓

873,695

873,695

Citizens Commerce Bancshares, Inc.

Cumulative

20

1,842,750

1,842,750

Rising Sun Bancorp

Cumulative

20

1,749,960

1,749,960

Cecil Bancorp, Inc.

Cumulative

19

City National Bancshares Corporation

Cumulative

19

✓

2,976,700

2,976,700

2,336,153

2,336,153

U.S. Century Bank

Non-Cumulative

19

13,004,930

13,004,930

Goldwater Bank, N.A.**

Non-Cumulative

18

681,000

681,000

Patapsco Bancorp, Inc.

Cumulative

18

1,591,500

1,591,500

Prairie Star Bancshares, Inc.

Cumulative

18

714,700

714,700

Capital Commerce Bancorp, Inc.

Cumulative

17

1,232,288

1,232,288

Harbor Bankshares Corporation**

Cumulative

17

1,615,000

1,445,000

Pinnacle Bank Holding Company

Cumulative

17

1,060,320

1,060,320

Western Community Bancshares, Inc.

Cumulative

17

1,834,538

1,834,538

CalWest Bancorp

Cumulative

16

1,108,200

1,108,200

CSRA Bank Corp.

Cumulative

16

Liberty Shares, Inc.

Cumulative

16

Regent Bancorp, Inc**

Cumulative

16

Tidelands Bancshares, Inc

Cumulative

16

HCSB Financial Corporation

Cumulative

15

Highlands Independent Bancshares, Inc.

Cumulative

15

Suburban Illinois Bancorp, Inc.*,**

Interest

14

Allied First Bancorp, Inc.

Cumulative

13

NCAL Bancorp

Cumulative

Porter Bancorp, Inc.
SouthFirst Bancshares, Inc.
US Metro Bank

✓

547,200

547,200

3,939,840

3,939,840

2,275,860

2,275,860

✓

3,178,560

3,178,560

✓

2,546,763

2,546,763

✓

1,436,313

1,436,313

✓

4,547,083

4,547,083

683,498

683,498

13

✓

1,971,250

1,971,250

Cumulative

12

✓

5,950,000

5,950,000

Cumulative

11

413,655

413,655

Non-Cumulative

11

486,000

486,000

OneFinancial Corporation

Non-Cumulative

10

3,715,192

3,715,192

Calvert Financial Corporation

Cumulative

119,668

119,668

**
*,**

✓

7

Chambers Bancshares, Inc.

Interest

7

3,164,866

3,164,866

Citizens Bank & Trust Company

Non-Cumulative

5

163,500

163,500

Farmers & Merchants Barcshares, Inc.

Cumulative

5

1,458,875

709,500

Community Bancshares, Inc.

Cumulative

1

102,020

51,010

*,**

*,**

✓

Continued on next page

245

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

CPP-RELATED MISSED DIVIDEND AND INTEREST PAYMENTS, AS OF 9/30/2014

Dividend or
Payment Type

Number
of Missed
Payments

Non-Cumulative

21

Royal Bancshares of Pennsylvania, Inc.

Cumulative

20

Idaho Bancorp****

Cumulative

19

Cumulative

18

Pacific City Financial Corporation

Cumulative

18

Centrue Financial Corporation*****

Cumulative

Georgia Primary Bank

Northern States Financial Corp*****

Observers
Assigned
to Board of
Directors1

(CONTINUED)

Value of Missed
Payments2

Value of Unpaid
Amounts2,3,4

$2,482,702

$2,482,702



7,601,750

7,601,750

✓

1,786,238

1,786,238



4,893,750

4,893,750

3,973,050

3,973,050

18



6,959,475

6,959,475

Non-Cumulative

18

✓

1,113,163

1,113,163

Cumulative

18



3,872,475

3,872,475

Anchor BanCorp Wisconsin, Inc.

Cumulative

17



23,604,167

23,604,167

First Banks, Inc.*****

Cumulative

17



64,543,063

64,543,063

Syringa Bancorp

Cumulative

17

✓

1,853,000

1,853,000

Market Bancorporation, Inc.

Cumulative

16

449,080

449,080

Provident Community Bancshares, Inc.

Cumulative

15

1,737,375

1,737,375

Central Virginia Bankshares, Inc.

Cumulative

15

2,134,688

2,134,688

Omega Capital Corp.

Cumulative

15

Rogers Bancshares, Inc.****

Cumulative

15

Pathway Bancorp*****

Cumulative

15

Bridgeview Bancorp, Inc.*****

Cumulative

15

Madison Financial Corporation*****

Cumulative

15

688,913

688,913

Midtown Bank & Trust Company**,*****

Non-Cumulative

15

1,067,213

1,067,213

TCB Holding Company****

Cumulative

15

2,397,488

2,397,488

Provident Community Bancshares, Inc.*****

Cumulative

15

1,737,375

1,737,375

Marine Bank & Trust Company

Non-Cumulative

15

613,125

613,125

1st FS Corporation

Cumulative

14

2,864,575

2,864,575

Dickinson Financial Corporation II*****

Cumulative

14

27,859,720

27,859,720

FC Holdings, Inc.*****

Cumulative

14

4,013,730

4,013,730

Ridgestone Financial Services, Inc.

Cumulative

14

Intervest Bancshares Corporation*****

Cumulative

14

Fidelity Federal Bancorp

Cumulative

14

Premierwest Bancorp*****

Cumulative

14

Great River Holding Company

Cumulative

14

Bank of the Carolinas Corporation*****

Cumulative

14

White River Bancshares Company

Cumulative

14

Company
Exchanges, Sales, Recapitalizations,
and Failed Banks
United American Bank*****
*****

Blue Valley Ban Corp

*****
*****

*****

****

****

*****

*****

*****

*****

*****

*****

*,**,*****

*****

575,588

575,588



5,109,375

5,109,375

761,588

761,588



7,766,250

7,766,250

✓

✓

2,079,175

2,079,175



4,375,000

4,375,000

1,229,924

1,229,924



7,245,000

7,245,000

2,466,660

2,466,660

2,306,325

2,306,325

✓

3,204,600

3,204,600
Continued on next page

246

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

CPP-RELATED MISSED DIVIDEND AND INTEREST PAYMENTS, AS OF 9/30/2014

Company

Dividend or
Payment Type

First Southwest Bancorporation, Inc.*****

Cumulative

Tennessee Valley Financial Holdings, Inc.*****

Cumulative

First Sound Bank

Pacific Commerce Bank**,*****
Patriot Bancshares, Inc.

Number
of Missed
Payments

Observers
Assigned
to Board of
Directors1

(CONTINUED)

Value of Missed
Payments2

Value of Unpaid
Amounts2,3,4

13

$974,188

$974,188

13

531,375

531,375

Non-Cumulative

13

1,202,500

1,202,500

Non-Cumulative

13

751,089

695,771

Cumulative

13

✓

4,612,010

4,612,010

Stonebridge Financial Corp.

Cumulative

12

✓

1,794,180

1,794,180

Premier Financial Corp*,**,*****

Interest

12

1,597,857

1,597,857

*****

*****
*****

Citizens Bancshares Co. (MO)

Cumulative

12

Northwest Bancorporation, Inc.*****

Cumulative

12

Plumas Bancorp*****

Cumulative

12

Gold Canyon Bank****

Non-Cumulative

12

Santa Clara Valley Bank, N.A.

Non-Cumulative

12

Spirit BankCorp, Inc.*****

Cumulative

12

Alliance Financial Services, Inc.*,*****

Interest

12

First Trust Corporation

Interest

12

Cumulative

12

Eastern Virginia Bankshares, Inc.

Cumulative

11

✓

The Queensborough Company*****

Cumulative

11

Boscobel Bancorp, Inc

Interest

Investors Financial Corporation of Pettis
County, Inc.*

****



✓

4,086,000

4,086,000

1,716,750

1,716,750

1,792,350

1,792,350

254,010

254,010

474,150

474,150

4,905,000

4,905,000

3,020,400

3,020,400



4,522,611

4,522,611

✓

2,911,200

2,911,200

3,300,000

3,300,000

1,798,500

1,798,500

11

1,288,716

1,288,716

Interest

11

922,900

922,900

Florida Bank Group, Inc.*****

Cumulative

11

✓

3,068,203

3,068,203

Reliance Bancshares, Inc.

Cumulative

11

✓

5,995,000

5,995,000

Village Bank and Trust Financial Corp.*****

Cumulative

11

✓

2,026,475

2,026,475

AB&T Financial Corporation

Cumulative

11

481,250

481,250

Atlantic Bancshares, Inc.

Cumulative

11

First Financial Service Corporation*****

Cumulative

10

Old Second Bancorp, Inc.*****

Cumulative

Security State Bank Holding-Company*,**,*****

Interest

Bank of George

Non-Cumulative
Non-Cumulative

Commonwealth Business Bank

Non-Cumulative

Gregg Bancshares, Inc.****

Cumulative

Metropolitan Bank Group, Inc./NC Bancorp,
Inc.***

Cumulative

9

National Bancshares, Inc.*****

Cumulative

9

*****

*,*****

Community First, Inc.*****
*****

*,*****

*****

*****

*****

*****

Valley Community Bank*****
*****

✓

299,255

299,255

✓

2,500,000

2,500,000

10



9,125,000

9,125,000

10

✓

2,931,481

2,931,481

10

364,150

364,150

10

749,375

749,375

10

1,049,250

1,049,250

9

101,115

101,115

12,716,368

9,511,543

✓

3,024,383

3,024,383
Continued on next page

247

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

CPP-RELATED MISSED DIVIDEND AND INTEREST PAYMENTS, AS OF 9/30/2014

Dividend or
Payment Type

Company

Number
of Missed
Payments

Observers
Assigned
to Board of
Directors1

(CONTINUED)

Value of Missed
Payments2

Value of Unpaid
Amounts2,3,4

SouthCrest Financial Group, Inc.*****

Cumulative

9

$1,581,863

$1,581,863

Citizens Bancorp

Cumulative

9

1,275,300

1,275,300

Community Pride Bank Corporation

Interest

9

803,286

803,286

Premier Bank Holding Company****

Cumulative

9

1,164,938

1,164,938

RCB Financial Corporation*****

Cumulative

9

1,055,520

1,055,520

Central Federal Corporation*****

Cumulative

8

722,500

722,500

****
*,**,*****

CoastalSouth Bancshares, Inc.

Cumulative

8

1,687,900

1,687,900

HMN Financial, Inc.*****

Cumulative

8

2,600,000

2,600,000

One Georgia Bank

Non-Cumulative

8

Independent Bank Corporation***

Cumulative

8

First Intercontinental Bank*****

Non-Cumulative

8

*****

****

✓

605,328

605,328

14,193,996

6,164,420

697,400

697,400

Coloeast Bankshares, Inc.

Cumulative

8

1,090,000

1,090,000

Cascade Financial Corporation*****

Cumulative

7

3,409,875

3,409,875

Integra Bank Corporation

Cumulative

7

7,313,775

7,313,775

Princeton National Bancorp, Inc.****

Cumulative

7

2,194,763

2,194,763

Maryland Financial Bank

Non-Cumulative

7

162,138

162,138

Brogan Bankshares, Inc.*

Interest

7

352,380

352,380

*****

****

*****

✓

Severn Bancorp, Inc.

Cumulative

6

1,754,475

1,754,475

Central Pacific Financial Corp.***,9

Cumulative

6

10,125,000

—

*****

Coastal Banking Company, Inc.

Cumulative

6

995,000

995,000

*****

First Reliance Bancshares, Inc.

Cumulative

6

1,254,720

1,254,720

FNB United Corp.***

Cumulative

6

3,862,500

—

FPB Bancorp, Inc. (FL)

Cumulative

6

435,000

435,000

Indiana Bank Corp.****

Cumulative

6

107,310

107,310

Naples Bancorp, Inc.

Cumulative

6

327,000

327,000

First Place Financial Corp.

Cumulative

6

5,469,525

5,469,525

Worthington Financial Holdings, Inc.*****

Cumulative

6

222,360

222,360

Fort Lee Federal Savings Bank****

Non-Cumulative

6

106,275

106,275

Alarion Financial Services, Inc.

Cumulative

6

532,560

532,560

Community Financial Shares, Inc.

Cumulative

5

759,820

759,820

Delmar Bancorp*****

Cumulative

5

613,125

613,125

First BanCorp (PR)

Cumulative

5

42,681,526

—

First Federal Bancshares of Arkansas,
Inc.*****

Cumulative

5

1,031,250

1,031,250

Flagstar Bancorp, Inc.*****

Cumulative

5

16,666,063

16,666,063

Cumulative

5

4,239,200

*****

****

*****

*****
***

***

Midwest Banc Holdings, Inc.

5

✓

✓

4,239,200
Continued on next page

248

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

CPP-RELATED MISSED DIVIDEND AND INTEREST PAYMENTS, AS OF 9/30/2014

Dividend or
Payment Type

Company
Pacific Capital Bancorp***,9

Number
of Missed
Payments

Observers
Assigned
to Board of
Directors1

(CONTINUED)

Value of Missed
Payments2

Value of Unpaid
Amounts2,3,4

Cumulative

5

$13,547,550

$—

Non-Cumulative

5

494,063

494,063

Northwest Commercial Bank

Non-Cumulative

5

135,750

135,750

IA Bancorp, Inc.**,*****

Cumulative

5

472,365

393,638

CB Holding Corp.

Cumulative

4

224,240

224,240

Colony Bankcorp, Inc.*****

Cumulative

4

1,400,000

1,400,000

First Community Bank Corporation of
America*****

Cumulative

4

534,250

534,250

Green Bankshares, Inc.*****

Cumulative

4

3,613,900

3,613,900

Hampton Roads Bankshares, Inc.***,9

Cumulative

4

4,017,350

4,017,350

Pierce County Bancorp

Cumulative

4

370,600

370,600

Santa Lucia Bancorp*****

Cumulative

4

200,000

200,000

Sterling Financial Corporation (WA)

Cumulative

4

18,937,500

18,937,500

TIB Financial Corp***** ,7

Cumulative

4

1,850,000

1,850,000

Community Bank of the Bay

Non-Cumulative

4

72,549

72,549

The Bank of Currituck

Non-Cumulative

4

219,140

219,140

The Connecticut Bank and Trust
Company*****

Non-Cumulative

4

246,673

246,673

Plato Holdings Inc.*,*****

Interest

4

207,266

207,266

Virginia Company Bank

GulfSouth Private Bank

****
****

****

****

***,9

6

*****

Non-Cumulative

3

185,903

185,903

Blue River Bancshares, Inc.****

Cumulative

3

204,375

204,375

Community West Bancshares

Cumulative

3

585,000

585,000

Legacy Bancorp, Inc.****

Cumulative

3

206,175

206,175

Sonoma Valley Bancorp

Cumulative

3

353,715

353,715

Superior Bancorp Inc.****

Cumulative

3

2,587,500

2,587,500

Cumulative

3

1,125,000

1,125,000

*****

*****

****

Tennessee Commerce Bancorp, Inc.****
The South Financial Group, Inc.

Cumulative

3

13,012,500

13,012,500

Treaty Oak Bancorp, Inc.*****

Cumulative

3

133,553

133,553

Bank of Commerce

*****

Non-Cumulative

3

122,625

122,625

Carolina Trust Bank*****

Non-Cumulative

3

150,000

150,000

***** ,7

Commerce National Bank

Non-Cumulative

3

150,000

150,000

Cadence Financial Corporation*****

Cumulative

2

550,000

550,000

First Alliance Bancshares, Inc.*****

Cumulative

2

93,245

93,245

Pacific Coast National Bancorp****

Cumulative

2

112,270

112,270

The Baraboo Bancorporation, Inc.*****

Cumulative

2

565,390

565,390

Colonial American Bank

Non-Cumulative

2

15,655

*****

15,655
Continued on next page

249

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

CPP-RELATED MISSED DIVIDEND AND INTEREST PAYMENTS, AS OF 9/30/2014

Dividend or
Payment Type

Number
of Missed
Payments

Non-Cumulative

FBHC Holding Company

Observers
Assigned
to Board of
Directors1

(CONTINUED)

Value of Missed
Payments2

Value of Unpaid
Amounts2,3,4

2

$33,357

$33,357

Interest

2

123,127

123,127

Gateway Bancshares, Inc.

Cumulative

2

163,500

163,500

CIT Group Inc.****,8

Cumulative

2

29,125,000

29,125,000

Company
Fresno First Bank***
*,*****

UCBH Holdings, Inc.****

Cumulative

1

3,734,213

3,734,213

Exchange Bank*****

Non-Cumulative

1

585,875

585,875

Non-Cumulative

1

Tifton Banking Company

****

Total

51,775

51,775

$599,233,685

$516,678,278

Notes: Numbers may not total due to rounding. Approximately $32.2 million of the $511.6 million in unpaid CPP dividend/interest payments are non-cumulative and Treasury has no legal right to missed
dividends that are non-cumulative.
Missed interest payments occur when a Subchapter S recipient fails to pay Treasury interest on a subordinated debenture in a timely manner.
Partial payments made after the due date.
Completed an exchange with Treasury. For an exchange of mandatorily convertible preferred stock or trust preferred securities, dividend payments normally continue to accrue. For an exchange of
mandatorily preferred stock for common stock, no additional preferred dividend payments will accrue.
****
Filed for bankruptcy or subsidiary bank failed. For completed bankruptcy proceedings, Treasury’s investment was extinguished and no additional dividend payments will accrue. For bank failures,
Treasury may elect to file claims with bank receivers to collect current and/or future unpaid dividends.
*****
Treasury sold or is selling its CPP investment to the institution or a third party. No additional preferred dividend payments will accrue after a sale, absent an agreement to the contrary.
*

**

***

n
✓

Treasury has appointed one or more directors to the Board of Directors.
Treasury has assigned an observer to the Board of Directors.

F or First BanCorp and Pacific Capital Bancorp, Treasury had a contractual right to assign an observer to the board of directors. For the remainder, Treasury obtained consent from the institution to assign
an observer to the board of directors.
Includes unpaid cumulative dividends, non-cumulative dividends, and Subchapter S interest payments but does not include interest accrued on unpaid cumulative dividends.
3
Excludes institutions that missed payments but (i) have fully caught-up or exchanged new securities for missed payments, or (ii) have repaid their investment amounts and exited the Capital Purchase
Program.
4
Includes institutions that missed payments and (i) completed an exchange with Treasury for new securities, (ii) purchased their CPP investment from Treasury, or saw a third party purchase its CPP
investment from Treasury, or (iii) are in, or have completed bankruptcy proceedings or its subsidiary bank failed.
5
For Midwest Banc Holdings, Inc., the number of missed payments is the number last reported from SIGTARP Quarterly Report to Congress 4/20/2010, prior to bankruptcy filing; missed payment
amounts are from Treasury’s response to SIGTARP data call, 10/13/2010.
6
Treasury reported four missed payments by Community Bank of the Bay before it was allowed to transfer from CPP to CDCI. Upon transfer, Treasury reset the number of missed payments to zero.
7
For South Financial Group, Inc. and TIB Financial Corp, the number of missed payments and unpaid amounts reflect figures Treasury reported prior to the sale.
8
For CIT Group Inc., the number of missed payments is from the number last reported from SIGTARP Quarterly Report to Congress 1/30/2010, shortly after the bankruptcy filing; missed payment
amounts are from Treasury’s response to SIGTARP data call, 10/13/2010.
9
Completed exchanges:
- The exchange between Treasury and Hampton Roads, and the exchange between Treasury and Sterling Financial did not account for unpaid dividends. The number of missed payments and unpaid
amounts reflect the figures Treasury reported prior to the exchange.
- The exchange between Treasury and Central Pacific Financial Corp., and the exchange between Treasury and Pacific Capital Bancorp did account for unpaid dividends, thereby eliminating any unpaid
amounts. The number of missed payments reflects the amount Treasury reported prior to the exchange.
1

2

Sources: Treasury, Dividends and Interest Report, 7/10/2014; Treasury, responses to SIGTARP data calls, 1/7/2011, 4/6/2011, 7/8/2011, 10/11/2011, 1/10/2012, 4/5/2012, 7/10/2012,
10/4/2012, 1/10/2013, 4/4/2013, 7/5/2013, 10/7/2013, 1/13/2014, 4/10/2014, 7/11/2014, and 10/6/2014.

250

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

CPP Recipients: Bankrupt or with Failed Subsidiary Banks
Despite Treasury’s stated goal of limiting CPP investments to “healthy, viable
institutions,” as of September 30, 2014, 30 CPP participants had gone bankrupt or
had a subsidiary bank fail, as indicated in Table 4.37.482
TABLE 4.37

CPP RECIPIENTS: BANKRUPT OR WITH FAILED SUBSIDIARY BANKS, AS OF 9/30/2014

Company

Initial
Invested
Amount

Investment
Date

Status

Bankruptcy/
Failure Datea

($ MILLIONS)

Subsidiary Bank

$2,330.0

12/31/2008

Bankruptcy
proceedings
completed with
no recovery
of Treasury’s
investment;
subsidiary bank
remains active

298.7

11/14/2008

In bankruptcy;
subsidiary bank
failed

11/6/2009

United Commercial Bank,
San Francisco, CA

4.1

1/16/2009

Bankruptcy
proceedings
completed with
no recovery
of Treasury’s
investment;
subsidiary bank
failed

11/13/2009

Pacific Coast National
Bank, San Clemente, CA

89.4b

12/5/2008

In bankruptcy;
subsidiary bank
failed

5/14/2010

Midwest Bank and
Trust Company,
Elmwood Park, IL

Sonoma Valley Bancorp,
Sonoma, CA

8.7

2/20/2009

Subsidiary bank
failed

8/20/2010

Sonoma Valley Bank,
Sonoma, CA

Pierce County Bancorp,
Tacoma, WA

6.8

1/23/2009

Subsidiary bank
failed

11/5/2010

Pierce Commercial Bank,
Tacoma, WA

Tifton Banking Company,
Tifton, GA

3.8

4/17/2009

Failed

11/12/2010

N/A

Legacy Bancorp, Inc.,
Milwaukee, WI

5.5

1/30/2009

Subsidiary bank
failed

3/11/2011

Legacy Bank,
Milwaukee, WI

Superior Bancorp, Inc.,
Birmingham, AL

69.0

12/5/2008

Subsidiary bank
failed

4/15/2011

Superior Bank,
Birmingham, AL

Integra Bank Corporation,
Evansville, IN

83.6

2/27/2009

Subsidiary bank
failed

7/29/2011

Integra Bank, Evansville, IN

5.5

5/8/2009

Failed

7/15/2011

N/A

7/15/2011

First Peoples Bank,
Port Saint Lucie, FL

9/23/2011

Citizens Bank of Northern
California, Nevada City, CA

CIT Group Inc., New York, NY

UCBH Holdings Inc., San
Francisco, CA

Pacific Coast National Bancorp,
San Clemente, CA

Midwest Banc Holdings, Inc.,
Melrose Park, IL

One Georgia Bank, Atlanta, GA
FPB Bancorp, Port Saint Lucie, FL

5.8

12/5/2008

Subsidiary bank
failed

Citizens Bancorp, Nevada City, CA

10.4

12/23/2008

Subsidiary bank
failed

11/1/2009

CIT Bank,
Salt Lake City, UT

Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

CPP RECIPIENTS: BANKRUPT OR WITH FAILED SUBSIDIARY BANKS, AS OF 9/30/2014
Initial
Invested
Amount

Investment
Date

CB Holding Corp., Aledo, IL

$4.1

5/29/2009

Tennessee Commerce Bancorp,
Inc., Franklin, TN

30.0

Blue River Bancshares, Inc.,
Shelbyville, IN
Fort Lee Federal Savings Bank

Company

($ MILLIONS) (CONTINUED)

Bankruptcy/
Failure Datea

Subsidiary Bank

Subsidiary bank
failed

10/14/2011

Country Bank, Aledo, IL

12/19/2008

Subsidiary bank
failed

1/27/2012

Tennessee Commerce
Bank, Franklin, TN

5.0

3/6/2009

Subsidiary bank
failed

2/10/2012

SCB Bank, Shelbyville, IN

1.3

5/22/2009

Failed

4/20/2012

N/A

7/13/2012

Glasgow Savings Bank,
Glasgow, MO

Status

Gregg Bancshares, Inc.

0.9

2/13/2009

Subsidiary bank
failed

Premier Bank Holding Company

9.5

3/20/2009

In bankruptcy

8/14/2012

N/A

GulfSouth Private Bank

7.5

9/25/2009

Failed

10/19/2012

N/A

Investors Financial Corporation of
Pettis County, Inc.

4.0

5/8/2009

Subsidiary bank
failed

10/19/2012

Excel Bank, Sedalia, MO

First Place Financial Corporation

72.9

3/13/2009

In bankruptcy

10/29/2012

First Place Bank,
Warren, OH

Princeton National Bancorp

25.1

1/23/2009

Subsidiary bank
failed

11/2/2012

Citizens First National
Bank, Princeton, IL

1.6

6/26/2009

Failed

4/5/2013

N/A

Gold Canyon Bank
Indiana Bank Corp.

1.3

4/24/2009

In bankruptcy

4/9/2013

N/A

25.0

1/30/2009

In bankruptcy

7/5/2013

N/A

110.0

1/30/2009

Filed for and
exited bankruptcy
protectionc

8/12/2013

N/A

11.7

1/16/2009

Subsidiary bank
failed

12/13/2013

Texas Community
Bank,The Woodlands, TX

Syringa Bancorp

8.0

1/16/2009

Subsidiary bank
failed

1/31/2014

Syringa Bank,Boise, ID

Idaho Bancorp, Boise, ID

6.9

1/16/2009

In bankruptcy

4/24/2014

N/A

Rogers Bancshares, Inc.
Anchor BanCorp Wisconsin Inc.
TCB Holding Company

Total

$3,246.1

Notes: Numbers may not total due to rounding.
a
Date is the earlier of the bankruptcy filing by holding company or the failure of subsidiary bank.
b
The amount of Treasury’s investment prior to bankruptcy was $89,874,000. On 3/8/2010, Treasury exchanged its $84,784,000 of preferred stock in Midwest Banc Holdings, Inc.
(MBHI) for $89,388,000 of MCP, which is equivalent to the initial investment amount of $84,784,000, plus $4,604,000 of capitalized previously accrued and unpaid dividends.
c
Treasury recouped $6 million of its investment once the company’s plan of reorganization became effective.
Source: Treasury, Transactions Report, 9/30/2014.

251

252

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Realized Losses and Write-offs
When a CPP investment is sold at a loss, or an institution that Treasury invested
in fails or has its subsidiary fail, Treasury records the loss as a realized loss or a
write-off. For these recorded losses, Treasury has no expectation of regaining any
portion of the lost investment. According to Treasury, as of September 30, 2014,
Treasury had realized losses and write-offs of $4.9 billion on its CPP investments.
This total includes $17.4 million in realized losses this quarter. Table 4.38 shows all
realized losses and write-offs by Treasury on CPP investments through September
30, 2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.38

REALIZED LOSSES AND WRITE-OFFS IN CPP, AS OF 9/30/2014

($ MILLIONS)

TARP
Investment

Loss

$4

$2

12/3/2010 Sale of preferred stock at a loss

3

3

2/15/2011 Sale of preferred stock at a loss

44

6

3/4/2011 Sale of preferred stock at a loss

3

2

3/9/2011

First Federal Bancshares of Arkansas,
Inc.

17

11

5/3/2011 Sale of preferred stock at a loss

First Community Bank Corporation of
America

11

3

5/31/2011 Sale of preferred stock at a loss

Cascade Financial Corporation

39

23

6/30/2011 Sale of preferred stock at a loss

Green Bankshares, Inc.

72

4

9/7/2011 Sale of preferred stock at a loss

4

1

10/21/2011 Sale of preferred stock at a loss

Institution

Date

Description

Realized Losses
The Bank of Currituck
Treaty Oak Bancorp, Inc.
Cadence Financial Corporation
FBHC Holding Company

Santa Lucia Bancorp
Banner Corporation/Banner Bank

Sale of subordinated
debentures at a loss

124

14

4/3/2012 Sale of preferred stock at a loss

First Financial Holdings Inc.

65

8

4/3/2012 Sale of preferred stock at a loss

MainSource Financial Group, Inc.

57

4

4/3/2012 Sale of preferred stock at a loss

Seacoast Banking Corporation of
Florida

50

9

4/3/2012 Sale of preferred stock at a loss

Wilshire Bancorp, Inc.

62

4

4/3/2012 Sale of preferred stock at a loss

WSFS Financial Corporation
Central Pacific Financial Corp.
Ameris Bancorp

53

4

135

62

52

4

4/3/2012 Sale of preferred stock at a loss
4/4/2012

Sale of common stock at a loss

6/19/2012 Sale of preferred stock at a loss

Farmers Capital Corporation

30

8

6/19/2012 Sale of preferred stock at a loss

First Capital Bancorp, Inc.

11

1

6/19/2012 Sale of preferred stock at a loss

First Defiance Financial Corp.

37

1

6/19/2012 Sale of preferred stock at a loss

LNB Bancorp, Inc.

25

3

6/19/2012 Sale of preferred stock at a loss

105

11

21

4

Taylor Capital Group, Inc.
United Bancorp, Inc.

6/19/2012

Sale of preferred stock at a loss

6/19/2012 Sale of preferred stock at a loss

Fidelity Southern Corporation

48

5

7/3/2012 Sale of preferred stock at a loss

First Citizens Banc Corp

21

2

7/3/2012 Sale of preferred stock at a loss

Firstbank Corporation

33

2

7/3/2012 Sale of preferred stock at a loss

Metrocorp Bancshares, Inc.

45

1

7/3/2012 Sale of preferred stock at a loss

Peoples Bancorp of North Carolina, Inc.

25

2

7/3/2012 Sale of preferred stock at a loss

Pulaski Financial Corp.

33

4

7/3/2012 Sale of preferred stock at a loss

Southern First Bancshares, Inc.

17

2

7/3/2012 Sale of preferred stock at a loss

4

3

7/12/2012 Sale of preferred stock at a loss

20

5

8/9/2012 Sale of preferred stock at a loss

Naples Bancorp, Inc.
Commonwealth Bancshares, Inc.
Diamond Bancorp, Inc.

20

6

8/9/2012 Sale of preferred stock at a loss

Fidelity Financial Corporation

36

4

8/9/2012 Sale of preferred stock at a loss
Continued on next page

253

254

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

REALIZED LOSSES AND WRITE-OFFS IN CPP, AS OF 9/30/2014

($ MILLIONS) (CONTINUED)

TARP
Investment

Loss

$20

$2

24

2

Marquette National Corporation

36

10

8/10/2012 Sale of preferred stock at a loss

Park Bancorporation, Inc.

23

6

8/10/2012 Sale of preferred stock at a loss

7

2

8/10/2012 Sale of preferred stock at a loss

Institution
Market Street Bancshares, Inc.
CBS Banc-Corp.

Premier Financial Bancorp, Inc.

Date
8/9/2012

Description
Sale of preferred stock at a loss

8/10/2012 Sale of preferred stock at a loss

Trinity Capital Corporation

36

9

8/10/2012 Sale of preferred stock at a loss

Exchange Bank

43

5

8/13/2012 Sale of preferred stock at a loss

Millennium Bancorp, Inc.
Sterling Financial Corporation

7

4

303

188

8/14/2012 Sale of preferred stock at a loss
8/20/2012

Sale of preferred stock at a loss

BNC Bancorp

31

2

8/29/2012 Sale of preferred stock at a loss

First Community Corporation

11

0

8/29/2012 Sale of preferred stock at a loss

First National Corporation

14

2

8/29/2012 Sale of preferred stock at a loss

Mackinac Financial Corporation

11

1

8/29/2012 Sale of preferred stock at a loss

Yadkin Valley Financial Corporation

13

5

9/18/2012 Sale of preferred stock at a loss

Alpine Banks of Colorado

70

13

9/20/2012 Sale of preferred stock at a loss

F & M Financial Corporation (NC)

17

1

9/20/2012 Sale of preferred stock at a loss

F&M Financial Corporation (TN)

17

4

9/21/2012 Sale of preferred stock at a loss

First Community Financial Partners, Inc.

22

8

9/21/2012 Sale of preferred stock at a loss

Central Federal Corporation

7

4

9/26/2012 Sale of preferred stock at a loss

Congaree Bancshares, Inc.

3

0.6

10/31/2012 Sale of preferred stock at a loss

Metro City Bank

8

0.8

10/31/2012 Sale of preferred stock at a loss

Blue Ridge Bancshares, Inc.
Germantown Capital Corporation
First Gothenburg Bancshares, Inc.

12

3

10/31/2012

Sale of preferred stock at a loss

5

0.4

10/31/2012

Sale of preferred stock at a loss

8

0.7

10/31/2012 Sale of preferred stock at a loss

10

0.9

10/31/2012 Sale of preferred stock at a loss

Centerbank

2

0.4

10/31/2012 Sale of preferred stock at a loss

The Little Bank, Incorporated

8

0.1

10/31/2012 Sale of preferred stock at a loss

Oak Ridge Financial Services, Inc.

8

0.6

Peoples Bancshares of TN, Inc.

4

1

10/31/2012

Sale of preferred stock at a loss

Hometown Bankshares Corporation

10

0.8

10/31/2012

Sale of preferred stock at a loss

Western Illinois Bancshares, Inc.

Blackhawk Bancorp, Inc.

10/31/2012 Sale of preferred stock at a loss

11

0.7

11/9/2012 Sale of preferred stock at a loss

Capital Pacific Bancorp

4

0.2

11/9/2012 Sale of preferred stock at a loss

Three Shores Bancorporation, Inc.

6

0.6

11/9/2012 Sale of preferred stock at a loss

Regional Bankshares, Inc.

2

0.1

11/9/2012 Sale of preferred stock at a loss

Timberland Bancorp, Inc.

17

2

11/9/2012 Sale of preferred stock at a loss

First Freedom Bancshares, Inc.

9

0.7

11/9/2012 Sale of preferred stock at a loss

Bankgreenville Financial Corporation

1

0.1

11/9/2012 Sale of preferred stock at a loss

F&C Bancorp. Inc.

3

0.1

11/13/2012

Sale of subordinated
debentures at a loss
Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

REALIZED LOSSES AND WRITE-OFFS IN CPP, AS OF 9/30/2014
Institution
Farmers Enterprises, Inc.

TARP
Investment

Loss

Date

$12

$0.4

11/13/2012

Franklin Bancorp, Inc.

5

2

Sound Banking Company

3

0.2

Parke Bancorp, Inc.

($ MILLIONS) (CONTINUED)

Description
Sale of subordinated
debentures at a loss

11/13/2012 Sale of preferred stock at a loss
11/13/2012

Sale of preferred stock at a loss

16

5

Country Bank Shares, Inc.

8

0.6

11/29/2012 Sale of preferred stock at a loss
11/29/2012

Clover Community Bankshares, Inc.

3

0.4

11/29/2012 Sale of preferred stock at a loss

CBB Bancorp

4

0.3

11/29/2012 Sale of preferred stock at a loss

Alaska Pacific Bancshares, Inc.

5

0.5

11/29/2012 Sale of preferred stock at a loss
11/29/2012 Sale of preferred stock at a loss

Sale of preferred stock at a loss

Trisummit Bank

7

2

Layton Park Financial Group, Inc.

3

0.6

11/29/2012

Community Bancshares of Mississippi,
Inc. (Community Holding Company of
Florida, Inc.)

1

0.1

11/30/2012 Sale of preferred stock at a loss

FFW Corporation

7

0.7

11/30/2012 Sale of preferred stock at a loss

Hometown Bancshares, Inc.

2

0.1

11/30/2012 Sale of preferred stock at a loss

Bank of Commerce

3

0.5

11/30/2012 Sale of preferred stock at a loss

Corning Savings And Loan Association

1

0.1

11/30/2012 Sale of preferred stock at a loss

Carolina Trust Bank

4

0.6

11/30/2012 Sale of preferred stock at a loss

Community Business Bank

4

0.3

11/30/2012 Sale of preferred stock at a loss

KS Bancorp, Inc

4

0.7

11/30/2012 Sale of preferred stock at a loss

195

15

11/30/2012

Pacific Capital Bancorp

Sale of preferred stock at a loss

Sale of common stock at a loss

Community West Bancshares

16

4

12/11/2012 Sale of preferred stock at a loss

Presidio Bank

11

2

12/11/2012

The Baraboo Bancorporation, Inc.

21

7

12/11/2012 Sale of preferred stock at a loss

2

0.7

22

2

Manhattan Bancshares, Inc.

3

0.1

12/11/2012

First Advantage Bancshares, Inc.

1

0.1

12/11/2012 Sale of preferred stock at a loss

Community Investors Bancorp, Inc.

3

0.1

12/20/2012 Sale of preferred stock at a loss

First Business Bank, National
Association

4

0.4

12/20/2012 Sale of preferred stock at a loss

Bank Financial Services, Inc.

1

0.1

12/20/2012 Sale of preferred stock at a loss

10

0.2

12/20/2012

Hyperion Bank

2

0.5

12/21/2012 Sale of preferred stock at a loss

First Independence Corporation

3

0.9

12/21/2012 Sale of preferred stock at a loss

First Alliance Bancshares, Inc.

3

1

12/21/2012 Sale of preferred stock at a loss

Community Financial Shares, Inc.

7

4

12/21/2012

Security Bancshares of Pulaski County,
Inc.
Central Community Corporation

Century Financial Services Corporation

12/11/2012

Sale of preferred stock at a loss

Sale of preferred stock at a loss

12/11/2012 Sale of preferred stock at a loss
Sale of subordinated
debentures at a loss

Sale of subordinated
debentures at a loss

Sale of preferred stock at a loss
Continued on next page

255

256

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

REALIZED LOSSES AND WRITE-OFFS IN CPP, AS OF 9/30/2014

($ MILLIONS) (CONTINUED)

TARP
Investment

Loss

Date

$12

$3

2/7/2013

Sale of preferred stock at a loss

6

0.2

2/8/2013

Sale of subordinated
debentures at a loss

Citizens Bancshares Co.

25

12

2/8/2013 Sale of preferred stock at a loss

Colony Bankcorp, Inc.

28

6

2/8/2013 Sale of preferred stock at a loss

9

3

2/8/2013 Sale of preferred stock at a loss

146

65

F & M Bancshares, Inc.

4

0.5

2/8/2013 Sale of preferred stock at a loss

First Priority Financial Corp.

5

1

2/8/2013 Sale of preferred stock at a loss

26

7

2/8/2013 Sale of preferred stock at a loss

6

0.4

2/8/2013 Sale of preferred stock at a loss

Institution
Alliance Financial Services, Inc.
Biscayne Bancshares, Inc.

Delmar Bancorp
Dickinson Financial Corporation II

HMN Financial, Inc.
Waukesha Bankshares, Inc.

2/8/2013

Description

Sale of preferred stock at a loss

FC Holdings, Inc.

21

2

2/20/2013 Sale of preferred stock at a loss

First Sound Bank

7

4

2/20/2013 Sale of preferred stock at a loss

18

4

2/20/2013

First Trust Corporation

Sale of subordinated
debentures at a loss

National Bancshares, Inc.

25

6

2/20/2013 Sale of preferred stock at a loss

Ridgestone Financial Services, Inc.

11

2

2/20/2013 Sale of preferred stock at a loss

Carolina Bank Holdings, Inc.

16

1

2/21/2013 Sale of preferred stock at a loss

3

0.4

3/8/2013 Sale of preferred stock at a loss

10

0.4

3/11/2013 Sale of preferred stock at a loss

Santa Clara Valley Bank, N.A.
Coastal Banking Company, Inc.
CoastalSouth Bancshares, Inc.

16

3

3/11/2013 Sale of preferred stock at a loss

First Reliance Bancshares, Inc.

15

5

3/11/2013 Sale of preferred stock at a loss

Southcrest Financial Group, Inc.

13

1

3/11/2013 Sale of preferred stock at a loss

The Queensborough Company

12

0.3

3/11/2013 Sale of preferred stock at a loss

Old Second Bancorp, Inc.

73

47

3/27/2013 Sale of preferred stock at a loss

Stonebridge Financial Corp.

11

9

3/27/2013 Sale of preferred stock at a loss

Alliance Bancshares, Inc.

3

0.1

3/28/2013 Sale of preferred stock at a loss

Amfirst Financial Services, Inc

5

0.2

3/28/2013

First Southwest Bancorporation, Inc.

6

0.5

3/28/2013 Sale of preferred stock at a loss

Flagstar Bancorp, Inc.

267

24

3/28/2013

Sale of preferred stock at a loss

United Community Banks, Inc.

180

7

3/28/2013

Sale of preferred stock at a loss

First Security Group, Inc.
BancStar, Inc.

Sale of subordinated
debentures at a loss

33

18

Exchange of preferred stock at
4/11/2013
a loss

9

0.1

4/26/2013 Sale of preferred stock at a loss

NewBridge Bancorp

52

1

4/29/2013 Sale of preferred stock at a loss

First Financial Service Corporation

20

9

4/29/2013 Sale of preferred stock at a loss

Guaranty Federal Bancshares, Inc.

17

0.4

4/29/2013 Sale of preferred stock at a loss

Intervest Bancshares Corporation

25

1

6/24/2013 Sale of preferred stock at a loss

First Western Financial, Inc.

20

3

6/24/2013 Sale of preferred stock at a loss

3

0.4

6/24/2013 Sale of preferred stock at a loss

Worthington Financial Holdings, Inc.

Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

REALIZED LOSSES AND WRITE-OFFS IN CPP, AS OF 9/30/2014

($ MILLIONS) (CONTINUED)

TARP
Investment

Loss

Farmers & Merchants Financial
Corporation

$0

$0.1

6/24/2013 Sale of preferred stock at a loss

Metropolitan Bank Group, Inc.

82

49

6/28/2013 Sale of preferred stock at a loss

Alarion Financial Services, Inc.

7

0.1

7/22/2013 Sale of preferred stock at a loss

110

104

33

22

Institution

Anchor Bancorp Wisconsin, Inc.
Centrue Financial Corporation

Date

9/27/2013

Description

Sale of common stock at a loss

10/18/2013 Sale of preferred stock at a loss

ColoEast Bankshares, Inc.

10

1

Commonwealth Business Bank

20

0.4

7/17/2013 Sale of preferred stock at a loss

Crosstown Holding Company

11

0.2

7/22/2013 Sale of preferred stock at a loss

Desoto County Bank

7/22/2013

Sale of preferred stock at a loss

3

0.5

9/25/2013 Sale of preferred stock at a loss

First Bancorp (PR)

400

72

9/13/2013

Sale of common stock at a loss

First Banks, Inc.

295

190

9/25/2013

Sale of preferred stock at a loss

6

3

First Intercontinental Bank
Florida Bank Group, Inc.

8/12/2013 Sale of preferred stock at a loss

20

12

8/14/2013 Sale of preferred stock at a loss

Mountain Valley Bancshares, Inc.

3

—

7/22/2013 Sale of preferred stock at a loss

RCB Financial Corporation

9

1

9/25/2013 Sale of preferred stock at a loss

Severn Bancorp, Inc.

23

—

9/25/2013 Sale of preferred stock at a loss

Universal Bancorp

10

0.5

8/12/2013 Sale of preferred stock at a loss

Virginia Company Bank
Central Virginia Bankshares, Inc.
Bank of George

5

2

8/12/2013 Sale of preferred stock at a loss

11

8

10/1/2013 Sale of preferred stock at a loss
10/21/2013 Sale of preferred stock at a loss

3

2

Blue Valley Ban Corp

22

0.5

Spirit Bank Corp Inc.

10/21/2013

Sale of preferred stock at a loss

30

21

Valley Community Bank

6

3

10/21/2013

Monarch Community Bancorp, Inc.

7

2

11/15/2013 Sale of common stock at a loss

AB&T Financial Corporation
Bridgeview Bancorp, Inc.
Midtown Bank & Trust Company

4

2

38

28

10/21/2013 Sale of preferred stock at a loss

11/19/2013

Sale of preferred stock at a loss
Sale of preferred stock at a loss

11/19/2013 Sale of preferred stock at a loss

5

2

11/19/2013

Village Bank and Trust Financial Corp

15

9

11/19/2013 Sale of preferred stock at a loss

1st Financial Services Corporation

16

8

12/31/2013

4

2

2/10/2014 Sale of preferred stock at a loss

Pacific Commerce Bank
Meridian Bank

Sale of preferred stock at a loss
Sale of preferred stock at a loss

13

2

3/17/2014 Sale of preferred stock at a loss

IA Bancorp, Inc/Indus American Bank

6

0.1

3/17/2014 Sale of preferred stock at a loss

Community First Bancshares, Inc. (AR)

13

0.2

2/10/2014 Sale of preferred stock at a loss

Georgia Primary Bank

5

3

2/10/2014 Sale of preferred stock at a loss

Chicago Shore Corporation

7

0.1

3/17/2014 Sale of preferred stock at a loss

Hampton Roads Bankshares, Inc.

80

77

4/14/2014 Sale of preferred stock at a loss

Community First, Inc.

18

12

4/14/2014 Sale of common stock at a loss

Northern States Financial Corporation

17

11

4/30/2014 Sale of preferred stock at a loss

Provident Community Bancshares, Inc.

9

4

4/30/2014 Sale of preferred stock at a loss
Continued on next page

257

258

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

REALIZED LOSSES AND WRITE-OFFS IN CPP, AS OF 9/30/2014
Institution
Communityone Bancorp/FNB United Corp.
United American Bank

($ MILLIONS) (CONTINUED)

TARP
Investment

Loss

Date

$52

$41

5/23/2014

Sale of common stock at a loss

9

5

7/2/2014

Sale of preferred stock at a loss

Description

Maryland Financial Bank

2

1

7/2/2014

Sale of preferred stock at a loss

Marine Bank & Trust Company

3

1

7/2/2014

Sale of preferred stock at a loss

10

7/16/2014

Sale of preferred stock at a loss

Bank of the Carolinas Corporation

13

Total CPP Realized Losses

$1,528

Write-Offs
CIT Group Inc.
Pacific Coast National Bancorp
South Financial Group, Inc.a

$2,330

$2,330

4

4

12/10/2009

Bankruptcy

2/11/2010 Bankruptcy

347

217

9/30/2010

Sale of preferred stock at a loss

TIB Financial Corpa

37

25

9/30/2010

Sale of preferred stock at a loss

UCBH Holdings Inc.

299

299

11/6/2009

Bankruptcy

85

85

5/14/2010

Bankruptcy

Midwest Banc Holdings, Inc.
Sonoma Valley Bancorp

9

9

8/20/2010

Bankruptcy

Pierce County Bancorp

7

7

11/5/2010

Bankruptcy

Tifton Banking Company

4

4

11/12/2010 Bankruptcy

Legacy Bancorp, Inc.

6

6

3/11/2011

Bankruptcy

Superior Bancorp Inc.

69

69

4/15/2011

Bankruptcy

FPB Bancorp, Inc.

6

6

7/15/2011

Bankruptcy

One Georgia Bank

6

6

7/15/2011

Bankruptcy

Integra Bank Corporation

84

84

7/29/2011

Bankruptcy

Citizens Bancorp

10

10

9/23/2011

Bankruptcy

CB Holding Corp.
Tennessee Commerce Bancorp, Inc.
Blue River Bancshares, Inc.

4

4

10/14/2011

Bankruptcy

30

30

1/27/2012

Bankruptcy

5

5

2/10/2012

Bankruptcy

Fort Lee Federal Savings Bank, FSB

1

1

4/20/2012

Bankruptcy

Gregg Bancshares, Inc.

1

1

7/13/2012

Bankruptcy

10

10

8/14/2012

Bankruptcy

GulfSouth Private Bank

Premier Bank Holding Company

8

8

10/19/2012

Bankruptcy

Investors Financial Corporation of
Pettis County, Inc.

4

4

10/19/2012 Bankruptcy

First Place Financial Corp.

73

73

10/29/2012

Bankruptcy

Princeton National Bancorp, Inc.

25

25

11/2/2012

Bankruptcy

Gold Canyon Bank

2

2

4/5/2013

Bankruptcy

Indiana Bank Corp.

1

1

4/9/2013

Bankruptcy

7/5/2013

Bankruptcy

Rogers Bancshares, Inc

25

25

TCB Holding Company

12

12

12/13/2013 Bankruptcy
Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

REALIZED LOSSES AND WRITE-OFFS IN CPP, AS OF 9/30/2014
Institution
Syringa Bancorp
Idaho Bancorp

($ MILLIONS) (CONTINUED)

TARP
Investment

Loss

$8

$8

1/31/2014 Bankruptcy

7

7

4/24/2014 Bankruptcy

Total CPP Write-Offs

$3,373

Total of CPP Realized Losses and
Write-Offs

$4,901

Date

Description

Notes: Numbers may not total due to rounding.
a
In the time since these transactions were classified as write-offs, Treasury has changed its practices and now classifies sales of preferred stock at a loss as
realized losses.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, response to SIGTARP data call, 10/6/2014.

Restructurings, Recapitalizations, Exchanges, and Sales of
CPP Investments
Certain CPP institutions continue to experience high losses and financial
difficulties, resulting in inadequate capital or liquidity. To avoid insolvency or
improve the quality of their capital, these institutions may ask Treasury to convert
its CPP preferred shares into a more junior form of equity or to accept a lower
valuation, resulting in Treasury taking a discount or loss. If a CPP institution
is undercapitalized and/or in danger of becoming insolvent, it may propose to
Treasury a restructuring (or recapitalization) plan to avoid failure (or to attract
private capital) and to “attempt to preserve value” for Treasury’s investment.483
Treasury may also sell its investment in a troubled institution to a third party at
a discount in order to facilitate that party’s acquisition of a troubled institution.
According to Treasury, although it may incur partial losses on its investment in the
course of these transactions, such an outcome may be deemed necessary to avoid
the total loss of Treasury’s investment that would occur if the institution failed.484
Under these circumstances, the CPP participant asks Treasury for a formal
review of its proposal. The proposal details the institution’s recapitalization plan
and may estimate how much capital the institution plans to raise from private
investors and whether Treasury and other preferred shareholders will convert
their preferred stock to common stock. The proposal may also involve a proposed
discount on the conversion to common stock, although Treasury would not realize
any loss until it disposes of the stock.485 In other words, Treasury would not know
whether a loss will occur, or the extent of such a loss, until it sells the common
stock it receives as part of such an exchange. According to Treasury, when it
receives such a request, it asks one of the external asset managers that it has
hired to analyze the proposal and perform due diligence on the institution.486 The
external asset manager interviews the institution’s managers, gathers non-public
information, and conducts loan-loss estimates and capital structure analysis.
The manager submits its evaluation to Treasury, which then decides whether to
restructure its CPP investment.487
Table 4.39 shows all restructurings, recapitalizations, exchanges, and sales of
CPP investments through September 30, 2014.

Undercapitalized: Condition in which a
financial institution does not meet its
regulator’s requirements for sufficient
capital to operate under a defined level
of adverse conditions.
Due Diligence: Appropriate level of
attention or care a reasonable person
should take before entering into an
agreement or a transaction with
another party. In finance, it often refers
to the process of conducting an audit
or review of the institution before
initiating a transaction.

259

260

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.39

TREASURY RESTRUCTURINGS, RECAPITALIZATIONS, EXCHANGES, & SALES, AS OF 9/30/2014
Investment
Date

Original
Investments

Citigroup Inc.

10/28/2008

$2,500.0

Provident Bankshares

11/14/2008

151.5

M&T Bank Corporation

12/23/2008

600.0

Wilmington Trust Corporation

Company

Combined
Investments

($ MILLIONS)

Investment Status
Exchanged for common stock/warrants and sold

$1,081.5a

Provident preferred stock exchanged for new M&T Bank
Corporation preferred stock; Wilmington Trust preferred stock
redeemed by M&T Bank Corporation; Sold

12/12/2008

330.0

Popular, Inc.

12/5/2008

935.0

Exchanged for trust preferred securities

First BanCorp

1/6/2009

400.0

Exchanged for mandatorily convertible preferred stock

South Financial Group, Inc.

12/5/2008

347.0

Sold

Sterling Financial Corporation

12/5/2008

303.0

Exchanged for common stock, Sold

Whitney Holding Corporation

12/19/2008

300.0

Sold

First Banks, Inc.

12/31/2008

295.4

Sold at auction

Flagstar Bancorp Inc.
Pacific Capital Bancorp

1/30/2009

267.0

Sold at loss in auction

11/21/2008

195.0

Exchanged for common stock

United Community Banks, Inc.

12/5/2008

180.0

Sold at loss in auction

Dickinson Financial Corporation II

1/16/2009

146.0

Sold at loss in auction

1/9/2009

135.0

Exchanged for common stock
Sold at loss in auction

Central Pacific Financial Corp.
Banner Corporation

11/21/2008

124.0

BBCN Bancorp, Inc.

11/21/2008

67.0

Center Financial Corporation

12/12/2008

55.0

2/20/2009

116.0

Exchanged for trust preferred securities and preferred stock
Sold at loss in auction

First Merchants
Taylor Capital Group

122.0b

Exchanged for a like amount of securities of BBCN Bancorp, Inc.

11/21/2008

104.8

Metropolitan Bank Group Inc.

6/26/2009

71.5

NC Bancorp, Inc.

6/26/2009

6.9

12/31/2008

80.3

Exchanged for common stock

1/16/2009

73.0

Sold at loss in auction

Green Bankshares

12/23/2008

72.3

Sold

Independent Bank Corporation

12/12/2008

72.0

Exchanged for mandatorily convertible preferred stock

Alpine Banks of Colorado

3/27/2009

70.0

Sold at loss in auction

Superior Bancorp, Inc.d

12/5/2008

69.0

Exchanged for trust preferred securities

Hampton Roads Bankshares
Old Second Bancorp, Inc.

First Financial Holdings Inc.
Wilshire Bancorp, Inc.
Standard Bancshares Inc.

81.9c

Exchanged for new preferred stock in Metropolitan Bank Group,
Inc. and later sold at loss

12/5/2008

65.0

Sold at loss in auction

12/12/2008

62.2

Sold at loss in auction

4/24/2009

60.0

Exchanged for common stock and securities purchase
agreements

MainSource Financial Group, Inc.

1/16/2009

57.0

Sold at loss in auction

WSFS Financial Corporation

1/23/2009

52.6

Sold at loss in auction

NewBridge Bancorp

12/12/2008

52.4

Sold at loss in auction

Ameris Bancorp

11/21/2008

52.0

Sold at loss in auction
Continued on next page

261

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TREASURY RESTRUCTURINGS, RECAPITALIZATIONS, EXCHANGES, & SALES, AS OF 9/30/2014
Original
Investments

12/19/2008

$50.0

Sold at loss in auction

3/13/2009

51.5

Sold at loss in auction

Fidelity Southern Corporation

12/19/2008

48.2

Sold at loss in auction

MetroCorp Bancshares, Inc.

1/16/2009

45.0

Sold at loss in auction

1/9/2009

44.0

Sold at loss in auction

12/19/2008

43.0

Sold at loss in auction

1/9/2009

24.9

ECB Bancorp, Inc.

1/16/2009

17.9

PremierWest Bancorp

2/13/2009

41.4

Capital Bank Corporation

12/12/2008

41.3

Sold

Reliance Bancshares, Inc.

2/13/2009

40.0

Sold at auction

Cascade Financial Corporation

11/21/2008

39.0

Sold at loss in auction

Bridgeview Bancorp, Inc.

12/19/2008

38.0

Sold at loss in auction

12/5/2008

37.0

Sold

Company
Seacoast Banking Corporation of
Florida
Communityone Bancorp/FNB United
Corp.

Cadence Financial Corporation
Exchange Bank
Crescent Financial Bancshares, Inc.

TIB Financial Corp.

Combined
Investments

($ MILLIONS) (CONTINUED)

Investment
Date

$42.8e

Investment Status

Exchanged for a like amount of securities of Crescent Financial
Bancshares, Inc.
Sold

First Defiance Financial Corp.

12/5/2008

37.0

Sold at loss in auction

Fidelity Financial Corporation

12/19/2008

36.3

Sold at loss in auction

Marquette National Corporation

12/19/2008

35.5

Sold at loss in auction

Trinity Capital Corporation

3/27/2009

35.5

Sold at loss in auction

Firstbank Corporation

1/30/2009

33.0

Sold at loss in auction

First Security Group, Inc.

1/9/2009

33.0

Sold

Centrue Financial Corporation

1/9/2009

32.7

Sold at loss in auction

Pulaski Financial Corp

1/16/2009

32.5

Sold at loss in auction

BNC Bancorp

12/5/2008

31.3

Sold at loss in auction

Royal Bancshares of Pennsylvania,
Inc.

2/20/2009

30.4

Sold at auction

Spirit Bank Corp. Inc.

3/27/2009

30.0

Sold at loss in auction

1/9/2009

30.0

Sold at loss in auction

Farmers Capital Bank Corporation
Colony Bankcorp, Inc.
HMN Financial, Inc

1/9/2009

28.0

Sold at loss in auction

12/23/2008

26.0

Sold at loss in auction

Patriot Bancshares, Inc.

12/19/2008

26.0

Sold at loss in auction

LNB Bancorp Inc.

12/12/2008

25.2

Sold at loss in auction

Peoples Bancorp of North Carolina,
Inc.

12/23/2008

25.1

Sold at loss in auction

Citizens Bancshares Co.
Intervest Bancshares Corporation
National Bancshares, Inc.

5/29/2009

25.0

Sold at loss in auction

12/23/2008

25.0

Sold at loss in auction

2/27/2009

24.7

Sold at loss in auction
Continued on next page

262

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TREASURY RESTRUCTURINGS, RECAPITALIZATIONS, EXCHANGES, & SALES, AS OF 9/30/2014
Company

Investment
Date

Original
Investments

CBS Banc-Corp

3/27/2009

$24.3

Sold at loss in auction

1/9/2009

24.0

Sold at auction

Eastern Virginia Bankshares, Inc.
Severn Bancorp, Inc.
First Citizens Banc Corp
Park Bancorporation, Inc.

Combined
Investments

($ MILLIONS) (CONTINUED)

Investment Status

11/21/2008

23.4

Sold at auction

1/23/2009

23.2

Sold at loss in auction

3/6/2009

23.2

Sold at loss in auction

Premier Financial Bancorp, Inc.

10/2/2009

22.3

Sold at loss in auction

Central Community Corporation

2/20/2009

22.0

Sold at loss in auction

12/11/2009

22.0

Sold at loss in auction

Blue Valley Ban Corp

12/5/2008

21.8

Sold at loss in auction

FC Holdings, Inc.

6/26/2009

21.0

Sold at loss in auction

First Community Financial Partners,
Inc.

The Baraboo Bancorporation, Inc.

1/16/2009

20.7

Sold at loss in auction

United Bancorp, Inc.

1/16/2009

20.6

Sold at loss in auction

Florida Bank Group, Inc.

7/24/2009

20.5

Sold

Diamond Bancorp, Inc.

5/22/2009

20.4

Sold at loss in auction

Commonwealth Bancshares, Inc.

5/22/2009

20.4

Sold at loss in auction

2/6/2009

20.4

Sold at loss in auction

First Western Financial, Inc.
Market Street Bancshares, Inc.

5/15/2009

20.3

Sold at loss in auction

BNCCORP, Inc.

1/16/2009

20.1

Sold at auction

1/9/2009

20.0

Sold at loss in auction

6/5/2009

18.0

Sold at loss in auction

2/27/2009

17.8

Sold at auction

First Financial Service Corporation
First Trust Corporation
Community First Inc.
Southern First Bancshares, Inc.

2/27/2009

17.3

Sold at loss in auction

F&M Financial Corporation (TN)

2/13/2009

17.2

Sold at loss in auction

F & M Financial Corporation (NC)

2/6/2009

17.0

Sold at loss in auction

Northern States Financial Corp.

2/20/2009

17.2

Sold at loss in auction

Guaranty Federal Bancshares, Inc.

1/30/2009

17.0

Sold at loss in auction

White River Bancshares Company

2/20/2009

16.8

Sold at auction

12/23/2008

16.6

Sold at loss in auction

3/6/2009

16.5

Sold

11/14/2008

16.4

Sold

1/30/2009

16.3

Sold at loss in auction

12/19/2008

16.2

Sold at auction

1/9/2009

16.0

Sold at loss in auction

Timberland Bancorp Inc.
First Federal Bankshares of
Arkansas, Inc.
1st Financial Services Corporation
Parke Bancorp Inc.
Pacific City Financial Corporation
Carolina Bank Holdings, Inc.
CoastalSouth Bancshares, Inc.

8/28/2009

16.0

Sold at loss in auction

Community West Bancshares

12/19/2008

15.6

Sold at loss in auction
Continued on next page

263

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TREASURY RESTRUCTURINGS, RECAPITALIZATIONS, EXCHANGES, & SALES, AS OF 9/30/2014
Company
First Reliance Bancshares, Inc

Investment
Date

Original
Investments

Combined
Investments

($ MILLIONS) (CONTINUED)

Investment Status

3/6/2009

$15.3

Sold at loss in auction

Broadway Financial Corporation

11/14/2008

15.0

Exchanged for common stock

First Community Bancshares, Inc

5/15/2009

14.8

Sold

5/1/2009

14.7

Sold at loss in auction

Village Bank and Trust Financial Corp
First National Corporation

3/13/2009

13.9

Sold at loss in auction

Yadkin Valley Financial Corporation

7/24/2009

13.3

Sold at loss in auction

Bank of the Carolinas Corporation

4/17/2009

13.2

Sold

SouthCrest Financial Group, Inc.

7/17/2009

12.9

Sold

4/3/2009

12.7

Sold at loss in auction

Community First Bancshares, Inc.
Alliance Financial Services Inc.

6/26/2009

12.0

Sold at loss in auction

Farmers Enterprises, Inc.

6/19/2009

12.0

Sold at loss in auction

1/9/2009

12.0

Sold at loss in auction

1/30/2009

11.9

Sold at auction

The Queensborough Company
Plumas Bancorp

1/30/2009

11.4

Sold

First Community Corporation

Central Virginia Bankshares

11/21/2008

11.4

Sold at loss in auction

Western Illinois Bancshares, Inc.

12/23/2008

11.4

Sold at loss in auction

First Capital Bancorp, Inc.

4/3/2009

11.0

Sold at loss in auction

Mackinac Financial Corporation

4/24/2009

11.0

Sold at loss in auction

Ridgestone Financial Services, Inc.

2/27/2009

11.0

Sold at loss in auction

First Community Bank Corporation
of America

12/23/2008

11.0

Sold

Stonebridge Financial Corp.

1/23/2009

11.0

Sold at loss in auction

Security State Bank Holding
Company

5/1/2009

10.8

Sold at auction

11/20/2009

10.8

Sold at loss in auction

Crosstown Holding Company

Presidio Bank

1/23/2009

10.7

Sold at auction

Northwest Bancorporation, Inc.

2/13/2009

10.5

Sold at auction

Blackhawk Bancorp, Inc.

3/13/2009

10.0

Sold at loss in auction

Century Financial Services
Corporation

6/19/2009

10.0

Sold at loss in auction

ColoEast Bankshares, Inc.

2/13/2009

10.0

Sold at auction

HomeTown Bankshares Corporation

9/18/2009

10.0

Sold at loss in auction

Coastal Banking Company, Inc.

12/5/2008

10.0

Sold at loss in auction

Universal Bancorp

5/22/2009

9.9

Sold at auction

Provident Community Bancshares,
Inc.

3/13/2009

9.3

Sold at loss in auction

Delmar Bancorp

12/4/2009

9.0

Sold at loss in auction

RCB Financial Corporation

6/19/2009

8.9

Sold at auction
Continued on next page

264

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TREASURY RESTRUCTURINGS, RECAPITALIZATIONS, EXCHANGES, & SALES, AS OF 9/30/2014
Company
United American Bank

Investment
Date

Original
Investments

Combined
Investments

($ MILLIONS) (CONTINUED)

Investment Status

2/20/2009

$8.7

Sold at loss in auction

12/22/2009

8.7

Sold at loss in auction

BancStar, Inc.

4/3/2009

8.6

Sold at loss in auction

First Western Financial, Inc.

2/6/2009

8.6

Sold at loss in auction

First Freedom Bancshares, Inc.

Great River Holding Company

7/17/2009

8.4

Sold at loss in auction

Commonwealth Business Bank

1/23/2009

7.7

Sold at auction

Metro City Bank

1/30/2009

7.7

Sold at loss in auction

Oak Ridge Financial Services, Inc.

1/30/2009

7.7

Sold at loss in auction

First Gothenburg Bancshares, Inc.

2/27/2009

7.6

Sold at loss in auction

1/30/2009

7.5

Sold at loss in auction

The Little Bank, Incorporated

Country Bank Shares, Inc.

12/23/2009

7.5

Sold at loss in auction

First Sound Bank

12/23/2008

7.4

Sold

FFW Corporation

12/19/2008

7.3

Sold at loss in auction

Millennium Bancorp, Inc.

4/3/2009

7.3

Sold

Central Federal Corporation

12/5/2008

7.2

Sold

Community Financial Shares, Inc.

5/15/2009

7.0

Sold

TriSummit Bank
Chicago Shore Corporation
Monarch Community Bancorp, Inc

4/3/2009

7.0

Sold at loss in auction

7/31/2009

7.0

Sold at loss in auction

2/6/2009

6.8

Sold

11/13/2009

6.7

Sold at auction

Alarion Financial Services, Inc.

1/23/2009

6.5

Sold at auction

First Intercontinental Bank

3/13/2009

6.4

Sold at auction

Fidelity Federal Bancorp

Biscayne Bancshares, Inc.

6/19/2009

6.4

Sold at loss in auction

Premier Financial Bancorp, Inc.

5/22/2009

6.3

Sold at auction

Meridian Bank

2/13/2009

6.2

Sold at loss in auction

IA Bancorp, Inc.

9/18/2009

6.0

Sold at loss in auction

Three Shores Bancorporation, Inc.

1/23/2009

5.7

Sold at loss in auction

Boscobel Bancorp Inc.

5/15/2009

5.6

Sold at auction

Waukesha Bankshares, Inc.

6/26/2009

5.6

Sold at loss in auction

First Southwest Bancorporation, Inc.

3/6/2009

5.5

Sold at loss in auction

Valley Community Bank

1/9/2009

5.5

Sold at loss in auction

Midtown Bank & Trust Company

2/27/2009

5.2

Sold at loss in auction

Franklin Bancorp, Inc.

5/22/2009

5.1

Sold at loss in auction

AmFirst Financial Services, Inc.

8/21/2009

5.0

Sold at loss in auction

Germantown Capital Corporation

3/6/2009

5.0

Sold at loss in auction

Alaska Pacific Bancshares Inc.

2/6/2009

4.8

Sold at loss in auction

12/18/2009

4.6

First Priority Financial Corp.

Sold at loss in auction
Continued on next page

265

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TREASURY RESTRUCTURINGS, RECAPITALIZATIONS, EXCHANGES, & SALES, AS OF 9/30/2014
Company

Investment
Date

Original
Investments

Virginia Company Bank

6/12/2009

$4.7

Sold at auction

Georgia Primary Bank

5/1/2009

4.5

Sold at loss in auction

Community Pride Bank Corporation

11/13/2009

4.4

Sold at auction

CBB Bancorp

12/20/2009

4.4

Sold at loss in auction

Pinnacle Bank Holding Company, Inc.

Combined
Investments

($ MILLIONS) (CONTINUED)

Investment Status

3/6/2009

4.4

Sold at loss in auction

4/10/2009

4.2

Sold at loss in auction

12/23/2008

4.1

Sold at loss in auction

Bank of Currituck

2/6/2009

4.0

Sold

Carolina Trust Bank

2/6/2009

4.0

Sold at loss in auction

Santa Lucia Bancorp

12/19/2008

4.0

Sold

Capital Pacific Bancorp

12/23/2008

4.0

Sold at loss in auction

Bank of Southern California, N.A.
Pacific Commerce Bank

Community Business Bank

2/27/2009

4.0

Sold at loss in auction

KS Bancorp Inc.

8/21/2009

4.0

Sold at loss in auction

Naples Bancorp, Inc.

3/27/2009

4.0

Sold

Peoples of Bancshares of TN, Inc.

3/20/2009

3.9

Sold at loss in auction

Pathway Bancorp

3/27/2009

3.7

Sold at auction

F & M Bancshares, Inc.

11/6/2009

3.5

Sold at loss in auction

AB&T Financial Corporation

1/23/2009

3.5

Sold at loss in auction

First Alliance Bancshares, Inc.

6/26/2009

3.4

Sold at loss in auction

Madison Financial Corporation

3/13/2009

3.4

Sold at auction

1/9/2009

3.3

Sold at loss in auction

9/25/2009

3.3

Sold at auction

Congaree Bancshares, Inc.
Mountain Valley Bancshares, Inc.
Treaty Oak Bancorp, Inc.

1/16/2009

3.3

Sold

First Independence Corporation

8/28/2009

3.2

Sold at loss in auction

Oregon Bancorp, Inc.

4/24/2009

3.2

Sold at auction

Sound Banking Co.

1/9/2009

3.1

Sold at loss in auction

Marine Bank& Trust Company

3/6/2009

3.0

Sold at loss in auction

Alliance Bancshares, Inc.

6/26/2009

3.0

Sold at loss in auction

Bank of Commerce

1/16/2009

3.0

Sold at loss in auction

Clover Community Bankshares, Inc.

3/27/2009

3.0

Sold at loss in auction

F & C Bancorp. Inc.

5/22/2009

3.0

Sold at loss in auction

FBHC Holding Company

12/29/2009

3.0

Sold

6/26/2009

3.0

Exchanged for preferred stock in Veritex Holding

Layton Park Financial Group, Inc.

12/18/2009

3.0

Sold at loss in auction

Tennessee Valley Financial Holdings,
Inc.

12/23/2008

3.0

Sold at auction

6/12/2009

2.9

Exchanged for preferred stock in Customers Bancorp

Fidelity Resources Company

Berkshire Bancorp

Continued on next page

266

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TREASURY RESTRUCTURINGS, RECAPITALIZATIONS, EXCHANGES, & SALES, AS OF 9/30/2014
Investment
Date

Original
Investments

Santa Clara Valley Bank, N.A.

2/13/2009

$2.9

Sold at loss in auction

Omega Capital Corp.

4/17/2009

2.8

Sold at auction

Company

Combined
Investments

($ MILLIONS) (CONTINUED)

Investment Status

Bank of George

3/13/2009

2.7

Sold at loss in auction

Worthington Financial Holdings, Inc.

5/15/2009

2.7

Sold at loss in auction

Community Investors Bancorp, Inc.

12/23/2008

2.6

Sold at loss in auction

Manhattan Bancshares, Inc.

6/19/2009

2.6

Sold at loss in auction

Plato Holdings Inc.

7/17/2009

2.5

Sold at loss in auction

Brogan Bankshares, Inc.

5/15/2009

2.4

Sold at auction

5/1/2009

2.3

Sold at loss in auction

2/13/2009

2.2

Sold at loss in auction

2/20/2009

2.1

Sold at auction

12/29/2009

2.0

Sold at auction

CenterBank
Security Bancshares of Pulaski
County, Inc.
Market Bancorporation, Inc.
Atlantic Bancshares, Inc.
Hometown Bancshares, Inc.

2/13/2009

1.9

Sold at loss in auction

Maryland Financial Bank

3/27/2009

1.7

Sold at loss in auction

Hyperion Bank

2/6/2009

1.6

Sold at loss in auction

Regional Bankshares Inc.

2/13/2009

1.5

Sold at loss in auction

Desoto County Bank

2/13/2009

1.2

Sold at auction

First Advantage Bancshares, Inc.

5/22/2009

1.2

Sold at loss in auction

2/6/2009

1.1

Sold at loss in auction

Community Bancshares of MS
BankGreenville Financial Corp.

2/13/2009

1.0

Sold at loss in auction

Bank Financial Services, Inc.

8/14/2009

1.0

Sold at loss in auction

Corning Savings and Loan
Association

2/13/2009

0.6

Sold at loss in auction

Farmers & Merchants Financial
Corporation

3/20/2009

0.4

Sold at loss in auction

2/6/2009

0.3

Sold at auction

Freeport Bancshares, Inc.

Notes: Numbers may be affected due to rounding.
a
M&T Bank Corporation (“M&T”) has redeemed the entirety of the preferred shares issued by Wilmington Trust Corporation plus accrued dividends. In addition, M&T has also repaid Treasury’s original $600
million investment. On August 21, 2012, Treasury sold all of its remaining investment in M&T at par.
b
The new investment amount of $122 million includes the original investment amount in BBCN Bancorp, Inc. (formerly Nara Bancorp, Inc.) of $67 million and the original investment of Center Financial
Corporation of $55 million.
c
The new investment amount of $81.9 million includes the original investment amount in Metropolitan Bank Group, Inc. of $71.5 million plus the original investment amount in NC Bank Group, Inc. of $6.9
million plus unpaid dividends of $3.5 million.
d
The subsidiary bank of Superior Bancorp, Inc. failed on April 15, 2011. All of Treasury’s TARP investment in Superior Bancorp is expected to be lost.
e
The new investment amount of $42.8 million includes the original investment amount in Crescent Financial Bancshares, Inc. (formerly Crescent Financial Corporation) of $24.9 million and the original
investment of ECB Bancorp, Inc. of $17.9 million.
Source: Treasury, Transactions Report, 9/30/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Treasury’s Sale of TARP Preferred Stock Investments at Auction
Overview of CPP Preferred Stock Auctions

From March 2012 through September 30, 2014, Treasury has held 26 sets of auctions in which it has sold all of its preferred stock investments in 182 CPP banks.488
For publicly traded banks, Treasury auctioned the shares through a placement
agent and the shares were available for purchase by the general public. For private
banks, Treasury auctioned the shares directly and the auctions were accessible only
to qualified purchasers. The preferred stock for all but 18 of the banks sold at a
discounted price and resulted in losses to Treasury.489 In the 26 auction sets, the
range of discount on the investments was 1% to 83%.490 When Treasury sells all of
its preferred shares of a CPP bank, it forfeits the right to collect missed dividends
and interest payments from the bank. Of the 182 banks in which Treasury sold its
stock through the auction process, 71 were overdue on payments to Treasury.491
The $241.3 million owed to Treasury for missed payments by these 71 banks will
never be recovered.492 As of September 30, 2014, Treasury lost a total of $1 billion
in the auctions, which includes $781.3 million lost on principal investments sold
at a discount and $241.3 million on forfeited missed dividends and interest owed
by these institutions.493 Less than a quarter of the banks, 43, bought back some of
their shares at the discounted price.494 In one set of auctions this quarter, Treasury
sold all of its TARP preferred investment in six banks.495 The one auction this quarter accrued losses to Treasury of $0.4 million.496
Table 4.40 shows details for the auctions of preferred stock in CPP banks
through September 30, 2014.

On October 9, 2012, SIGTARP made
three recommendations regarding
CPP preferred stock auctions, which
are discussed in detail in SIGTARP’s
October 2012 Quarterly Report,
pages 180-183.

267

268

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.40

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

Missed
Dividends

Total Loss
from Auction
Sales and
Missed
Dividends

83%

$1,794,180

$10,888,035

2,585,785

74%

481,250

3,067,035

10,450,000

27,550,000

73%

7,766,250

35,316,250

1,700,000

502,000

1,198,000

70%

621,138

1,819,138

11/19/2013

30,000,000

9,000,000

21,000,000

70%

4,905,000

25,905,000

Community First Inc.

4/14/2014

17,806,000

5,350,703

12,455,297

70%

2,911,200

15,366,497

Georgia Primary
Bank

2/10/2014

4,500,000

1,531,145

2,968,855

66%

1,113,163

4,082,018

3/1/2013

73,000,000

25,547,320

47,452,680

65%

9,125,000

56,577,680

First Banks, Inc.

8/12/2013

295,400,000

104,749,295

190,650,705

65%

64,543,063

255,193,768

Centrue Financial
Corporation

10/21/2013

32,668,000

10,631,697

21,186,665

65%

6,959,475

28,146,140

Bank of George

10/21/2013

2,672,000

955,240

1,716,760

64%

364,150

2,080,910

7/2/2014

8,700,000

3,294,050

5,405,950

62%

2,482,702

7,888,652

Village Bank and
Trust Financial Corp

11/19/2013

14,738,000

5,672,361

9,065,639

62%

2,026,475

11,092,114

Valley Community
Bank

10/21/2013

5,500,000

2,296,800

3,203,200

58%

749,375

3,952,575

First Priority
Financial Corp.

1/29/2013

9,175,000

4,012,094

5,162,906

56%

First Intercontinental
Bank

8/12/2013

6,398,000

3,222,113

3,175,887

50%

697,400

3,873,287

Citizens Bancshares
Co.

1/29/2013

24,990,000

12,679,301

12,310,699

49%

4,086,000

16,396,699

First Financial
Service Corporation

4/29/2013

20,000,000

10,733,778

9,266,222

46%

2,500,000

11,766,222

Dickinson Financial
Corporation II

1/29/2013

146,053,000

79,903,245

66,149,755

45%

27,859,720

94,009,475

Midtown Bank &
Trust Company

11/19/2013

5,222,000

3,133,200

2,088,800

40%

1,067,213

3,156,013

Delmar Bancorp

1/29/2013

9,000,000

5,453,900

3,546,100

39%

613,125

4,159,225

Virginia Company
Bank

8/12/2013

4,700,000

2,843,974

1,856,026

39%

185,903

2,041,929

Pacific Commerce
Bank

2/10/2014

4,060,000

2,494,961

1,565,039

39%

695,771

2,260,810

Franklin Bancorp,
Inc.

11/9/2012

5,097,000

3,191,614

1,905,386

37%

Auction
Date

Investment

Net Proceeds

Auction Loss

Stonebridge
Financial Corp.

3/15/2013

$10,973,000

$1,879,145

$9,093,855

AB&T Financial
Corporation

11/19/2013

3,500,000

914,215

Bridgeview Bancorp,
Inc.

11/19/2013

38,000,000

7/2/2014

Institution

Maryland Financial
Bank
Spirit Bank Corp.
Inc.

Old Second
Bancorp, Inc.a

United American
Bank

Percentage
of Shares
Discount Repurchased
Percentage by Institution

5,162,906

100%

1,905,386
Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

269

(CONTINUED)

Percentage
of Shares
Discount Repurchased
Percentage by Institution

Auction
Date

Investment

Net Proceeds

Auction Loss

12/20/2012

$1,552,000

$983,800

$568,200

37%

$568,200

9/12/2012

22,000,000

14,211,450

7,788,550

35%

7,788,550

12/11/2012

20,749,000

13,399,227

7,349,773

35%

$565,390

7,915,163

Marine Bank& Trust
Company

7/2/2014

3,000,000

1,985,000

1,015,000

34%

613,125

1,628,125

First Reliance
Bancshares, Inc.

3/1/2013

15,349,000

10,327,021

5,021,979

33%

1,254,720

6,276,699

Security Bancshares
of Pulaski County,
Inc.

12/11/2012

2,152,000

1,475,592

676,408

31%

First Alliance
Bancshares, Inc.

12/20/2012

3,422,000

2,370,742

1,051,258

31%

Marquette National
Corporation

7/27/2012

35,500,000

25,313,186

10,186,814

29%

Parke Bancorp, Inc.

11/30/2012

16,288,000

11,595,735

4,692,265

29%

4,692,265

First Independence
Corporation

12/20/2012

3,223,000

2,286,675

936,325

29%

936,325

HMN Financial, Inc.

1/29/2013

26,000,000

18,571,410

7,428,590

29%

Farmers Capital
Bank Corporation

6/13/2012

30,000,000

21,594,229

8,405,771

28%

8,405,771

Diamond Bancorp,
Inc.

7/27/2012

20,445,000

14,780,662

5,664,338

28%

5,664,338

Park
Bancorporation, Inc.

7/27/2012

23,200,000

16,772,382

6,427,618

28%

Community West
Bancshares

12/11/2012

15,600,000

11,181,456

4,418,544

28%

Commonwealth
Bancshares, Inc.

7/27/2012

20,400,000

15,147,000

5,253,000

26%

Trinity Capital
Corporation

7/27/2012

35,539,000

26,396,503

9,142,497

26%

9,142,497

TriSummit Bank

11/30/2012

7,002,000

5,198,984

1,803,016

26%

1,803,016

Alliance Financial
Services, Inc.

1/29/2013

12,000,000

8,912,495

3,087,505

26%

3,020,400

6,107,905

2/7/2013

24,664,000

18,318,148

6,345,852

26%

3,024,383

9,370,235

Blue Ridge
Bancshares, Inc.

10/31/2012

12,000,000

8,969,400

3,030,600

25%

3,030,600

Peoples Bancshares
of TN, Inc.

10/31/2012

3,900,000

2,919,500

980,500

25%

980,500

2/7/2013

17,969,000

13,612,558

4,356,442

24%

4,356,442

1/29/2013

28,000,000

21,680,089

6,319,911

23%

Institution
Hyperion Bank
First Community
Financial Partners,
Inc.b
The Baraboo
Bancorporation, Inc.

National Bancshares,
Inc.

First Trust
Corporation
Colony Bankcorp,
Inc.

Missed
Dividends

Total Loss
from Auction
Sales and
Missed
Dividends

676,408
93,245
31%

1,144,503
10,186,814

2,600,000

30%

10,028,590

6,427,618
585,000

26%

5,003,544
5,253,000

1,400,000

7,719,911

Continued on next page

270

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

(CONTINUED)

Percentage
of Shares
Discount Repurchased
Percentage by Institution

Auction
Date

Investment

Net Proceeds

Auction Loss

9/12/2012

$17,243,000

$13,443,074

$3,799,926

22%

$3,799,926

11/30/2012

3,000,000

2,345,930

654,070

22%

654,070

CoastalSouth
Bancshares, Inc.

3/1/2013

16,015,000

12,606,191

3,408,809

21%

Seacoast Banking
Corporation of
Florida

3/28/2012

50,000,000

40,404,700

9,595,300

19%

9,595,300

United Bancorp, Inc.

6/13/2012

20,600,000

16,750,221

3,849,779

19%

3,849,779

Alpine Banks of
Colorado

9/12/2012

70,000,000

56,430,297

13,569,703

19%

13,569,703

10/31/2012

2,250,000

1,831,250

418,750

19%

418,750

2/7/2013

10,900,000

8,876,677

2,023,323

19%

Congaree
Bancshares Inc.

10/31/2012

3,285,000

2,685,979

599,021

18%

Corning Savings and
Loan Association

11/30/2012

638,000

523,680

114,320

18%

114,320

KS Bancorp, Inc.

11/30/2012

4,000,000

3,283,000

717,000

18%

717,000

Institution
F&M Financial
Corporation (TN)
Layton Park Financial
Group, Inc.

CenterBank
Ridgestone Financial
Services, Inc.

Missed
Dividends

Total Loss
from Auction
Sales and
Missed
Dividends

$1,687,900

2,079,175
35%

5,096,709

4,102,498
599,021

DeSoto County Bank

9/25/2013

2,681,000

2,196,896

484,104

18%

Meridian Bank

3/17/2014

12,535,000

10,328,152

2,206,848

18%

2,206,848

First Western
Financial, Inc.c

7/27/2012

20,440,000

17,022,298

3,417,702

17%

3,417,702

Bank of Commerce

11/30/2012

3,000,000

2,477,000

523,000

17%

122,625

645,625

Carolina Trust Bank

11/30/2012

4,000,000

3,362,000

638,000

16%

150,000

788,000

Presidio Bank

12/11/2012

10,800,000

9,058,369

1,741,631

16%

3/1/2013

2,900,000

2,440,379

459,621

16%

Timberland Bancorp,
Inc.

11/9/2012

16,641,000

14,209,334

2,431,666

15%

Worthington
Financial Holdings,
Inc.

6/24/2013

2,720,000

2,318,851

401,149

15%

First Financial
Holdings Inc.

3/28/2012

65,000,000

55,926,478

9,073,522

14%

9,073,522

Clover Community
Bankshares, Inc.

11/30/2012

3,000,000

2,593,700

406,300

14%

406,300

Banner Corporation

3/28/2012

124,000,000

108,071,915

15,928,085

13%

15,928,085

LNB Bancorp Inc.

6/13/2012

25,223,000

21,863,750

3,359,250

13%

3,359,250

Pulaski Financial
Corp

6/27/2012

32,538,000

28,460,338

4,077,662

13%

4,077,662

Exchange Bank

7/27/2012

43,000,000

37,259,393

5,740,607

13%

Santa Clara Valley
Bank, N.A.

79%

484,104

1,741,631
474,150

933,771
2,431,666

222,360

47%

623,509

5,740,607
Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

271

(CONTINUED)

Percentage
of Shares
Discount Repurchased
Percentage by Institution

Auction
Date

Investment

Net Proceeds

Auction Loss

First National
Corporation

8/23/2012

$13,900,000

$12,082,749

$1,817,251

13%

$1,817,251

Taylor Capital Group

6/13/2012

104,823,000

92,254,460

12,568,540

12%

12,568,540

Fidelity Financial
Corporation

7/27/2012

36,282,000

32,013,328

4,268,672

12%

Yadkin Valley
Financial
Corporationd

9/12/2012

49,312,000

43,486,820

5,825,180

12%

5,825,180

Three Shores
Bancorporation, Inc.

11/9/2012

5,677,000

4,992,788

684,212

12%

684,212

Alaska Pacific
Bancshares, Inc.

11/30/2012

4,781,000

4,217,568

563,432

12%

563,432

Fidelity Southern
Corporation

6/27/2012

48,200,000

42,757,786

5,442,214

11%

5,442,214

First Citizens Banc
Corp

6/27/2012

23,184,000

20,689,633

2,494,367

11%

2,494,367

Southern First
Bancshares, Inc.

6/27/2012

17,299,000

15,403,722

1,895,278

11%

6%

1,895,278

Market Street
Bancshares, Inc.

7/27/2012

20,300,000

18,069,213

2,230,787

11%

89%

2,230,787

Premier Financial
Bancorp, Inc.

7/27/2012

22,252,000

19,849,222

2,402,778

11%

46%

2,402,778

Metro City Bank

10/31/2012

7,700,000

6,861,462

838,538

11%

15%

838,538

11/9/2012

1,000,000

891,000

109,000

11%

109,000

FFW Corporation

11/30/2012

7,289,000

6,515,426

773,574

11%

773,574

First Advantage
Bancshares, Inc.

12/11/2012

1,177,000

1,046,621

130,379

11%

130,379

FC Holdings, Inc.

Institution

BankGreenville
Financial Corporation

Missed
Dividends

Total Loss
from Auction
Sales and
Missed
Dividends

58%

4,268,672

2/7/2013

21,042,000

18,685,927

2,356,073

11%

$4,013,730

6,369,803

First Southwest
Bancorporation, Inc.

3/15/2013

5,500,000

4,900,609

599,391

11%

974,188

1,573,579

ColoEast
Bankshares, Inc.

7/22/2013

10,000,000

8,947,125

1,052,875

11%

1,090,000

2,142,875

WSFS Financial
Corporation

3/28/2012

52,625,000

47,435,299

5,189,701

10%

CBS Banc-Corp.

7/27/2012

24,300,000

21,776,396

2,523,604

10%

Blackhawk Bancorp
Inc.

10/31/2012

10,000,000

9,009,000

991,000

10%

991,000

First Gothenburg
Banschares, Inc.

10/31/2012

7,570,000

6,822,136

747,864

10%

747,864

Bank Financial
Services, Inc.

12/20/2012

1,004,000

907,937

96,063

10%

96,063

3/1/2013

12,900,000

11,587,256

1,312,744

10%

SouthCrest Financial
Group, Inc.

5,189,701
95%

2,523,604

1,581,863

2,894,607

Continued on next page

272

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

Institution

Auction
Date

(CONTINUED)

Percentage
of Shares
Discount Repurchased
Percentage by Institution

Investment

Net Proceeds

Auction Loss

Flagstar Bancorp,
Inc.

3/15/2013 $266,657,000

$240,627,277

$26,029,723

10%

First Capital
Bancorp, Inc.

6/13/2012

10,958,000

9,931,327

1,026,673

9%

BNC Bancorp

Missed
Dividends

Total Loss
from Auction
Sales and
Missed
Dividends

$16,666,063

$42,695,786

50%

1,026,673

8/23/2012

31,260,000

28,365,685

2,894,315

9%

Germantown Capital
Corporation, Inc.

2,894,315

10/31/2012

4,967,000

4,495,616

471,384

9%

HomeTown
Bankshares
Corporation

10/31/2012

10,000,000

9,093,150

906,850

9%

906,850

Oak Ridge Financial
Services, Inc.

10/31/2012

7,700,000

7,024,595

675,405

9%

675,405

First Freedom
Bancshares, Inc.

11/9/2012

8,700,000

7,945,492

754,508

9%

Sound Banking
Company

11/9/2012

3,070,000

2,804,089

265,911

9%

265,911

Country Bank
Shares, Inc.

11/30/2012

7,525,000

6,838,126

686,874

9%

686,874

Bank of Southern
California, N.A.

12/20/2012

4,243,000

3,850,150

392,850

9%

Farmers &
Merchants Financial
Corporation

6/24/2013

442,000

400,425

41,575

9%

RCB Financial
Corporation

9/25/2013

8,900,000

8,073,279

826,721

9%

MainSource Financial
Group, Inc.

3/28/2012

57,000,000

52,277,171

4,722,829

8%

Ameris Bancorp

6/13/2012

52,000,000

47,665,332

4,334,668

8%

Peoples Bancorp of
North Carolina, Inc.

6/27/2012

25,054,000

23,033,635

2,020,365

8%

50%

2,020,365

Regional
Bankshares, Inc.

11/9/2012

1,500,000

1,373,625

126,375

8%

47%

126,375

CBB Bancorp

11/30/2012

4,397,000

4,066,752

330,248

8%

35%

330,248

Central Community
Corporation

12/11/2012

22,000,000

20,172,636

1,827,364

8%

1,827,364

Waukesha
Bankshares, Inc.

1/29/2013

5,625,000

5,161,674

463,326

8%

463,326

Wilshire Bancorp,
Inc.

3/28/2012

62,158,000

57,766,994

4,391,006

7%

97%

4,391,006

Firstbank
Corporation

6/27/2012

33,000,000

30,587,530

2,412,470

7%

48%

2,412,470

Capital Pacific
Bancorp

11/9/2012

4,000,000

3,715,906

284,094

7%

Western Illinois
Bancshares, Inc.

11/9/2012

11,422,000

10,616,305

805,695

7%

25%

471,384

69%

754,508

30%

392,850
41,575
1,055,520

37%

1,882,241
4,722,829
4,334,668

284,094
89%

805,695
Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

273

(CONTINUED)

Percentage
of Shares
Discount Repurchased
Percentage by Institution

Auction
Date

Investment

Net Proceeds

Auction Loss

Community
Bancshares of
Mississippi, Inc.

11/30/2012

$1,050,000

$977,750

$72,250

7%

Community Business
Bank

11/30/2012

3,976,000

3,692,560

283,440

7%

Hometown
Bancshares, Inc.

11/30/2012

1,900,000

1,766,510

133,490

7%

1/29/2013

8,144,000

7,598,963

545,037

7%

545,037

2/7/2013

16,000,000

14,811,984

1,188,016

7%

1,188,016

Mackinac Financial
Corporation

8/23/2012

11,000,000

10,380,905

619,095

6%

619,095

F & M Financial
Corporation (NC)

9/12/2012

17,000,000

15,988,500

1,011,500

6%

84%

1,011,500

12/20/2012

2,600,000

2,445,000

155,000

6%

54%

155,000

Commonwealth
Business Bank

7/22/2013

7,701,000

7,250,414

450,586

6%

100%

Universal Bancorp

8/12/2013

9,900,000

9,312,028

587,972

6%

First Defiance
Financial Corp.

6/13/2012

37,000,000

35,084,144

1,915,856

5%

F&C Bancorp, Inc.

11/9/2012

2,993,000

2,840,903

152,097

5%

Farmers Enterprises,
Inc.

11/9/2012

12,000,000

11,439,252

560,748

5%

3/1/2013

9,950,000

9,408,213

541,787

5%

Alliance Bancshares,
Inc.

3/15/2013

2,986,000

2,831,437

154,563

5%

154,563

AmFirst Financial
Services, Inc.

3/15/2013

5,000,000

4,752,000

248,000

5%

248,000

United Community
Banks, Inc.

3/15/2013

180,000,000

171,517,500

8,482,500

5%

8,482,500

Biscayne
Bancshares, Inc.

1/29/2013

6,400,000

6,170,630

229,370

4%

Guaranty Federal
Bancshares, Inc.e

4/29/2013

12,000,000

11,493,900

506,100

4%

Intervest Bancshares
Corporation

6/24/2013

25,000,000

24,007,500

992,500

4%

25%

992,500

MetroCorp
Bancshares, Inc.

6/27/2012

45,000,000

43,490,360

1,509,640

3%

97%

1,509,640

First Community
Corporation

8/23/2012

11,350,000

10,987,794

362,206

3%

33%

362,206

The Little Bank,
Incorporated

10/31/2012

7,500,000

7,285,410

214,590

3%

63%

214,590

Institution

F & M Bancshares,
Inc.
Carolina Bank
Holdings, Inc.

Community Investors
Bancorp, Inc.

Coastal Banking
Company, Inc.

Missed
Dividends

Total Loss
from Auction
Sales and
Missed
Dividends

52%

$72,250
283,440

39%

133,490

$1,049,250

1,499,836
587,972

45%

1,915,856
152,097

99%

560,748
746,250

53%

1,288,037

229,370
506,100

Continued on next page

274

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

Institution
Manhattan
Bancshares, Inc.
The Queensborough
Company

(CONTINUED)

Percentage
of Shares
Discount Repurchased
Percentage by Institution

Auction
Date

Investment

Net Proceeds

Auction Loss

12/11/2012

$2,639,000

$2,560,541

$78,459

3%

3/1/2013

12,000,000

11,605,572

394,428

3%

Missed
Dividends

96%

Total Loss
from Auction
Sales and
Missed
Dividends
$78,459

$1,798,500

BancStar, Inc.

4/29/2013

8,600,000

8,366,452

233,548

3%

NewBridge Bancorp

4/29/2013

52,372,000

50,837,239

1,534,761

3%

Alarion Financial
Services, Inc.

7/22/2013

6,514,000

6,338,584

175,416

3%

Crosstown Holding
Company

7/22/2013

10,650,000

10,356,564

293,436

3%

293,436

12/20/2012

10,000,000

9,751,500

248,500

2%

248,500

7/22/2013

3,300,000

3,242,000

58,000

2%

Century Financial
Services Corporation
Mountain Valley
Bancshares, Inc.
Blue Valley Ban Corp

12%

2,192,928
233,548
1,534,761

532,560

91%

707,976

58,000

10/21/2013

21,750,000

21,263,017

486,983

2%

Community First
Bancshares, Inc.

4,893,750

5,380,733

2/10/2014

12,725,000

12,446,703

278,297

2%

IA Bancorp, Inc.

3/17/2014

5,976,000

5,863,113

112,887

2%

472,365

585,252

Plato Holdings Inc.

4/29/2013

2,500,000

2,478,750

21,250

1%

207,266

228,516

Fidelity Federal
Bancorp

7/22/2013

6,657,000

6,586,509

70,491

1%

1,229,924

1,300,415

Omega Capital Corp.

7/22/2013

2,816,000

2,791,000

25,000

1%

575,588

600,588

Premier Financial
Corp.

7/22/2013

6,349,000

6,270,436

78,564

1%

1,597,857

1,676,421

Community Pride
Bank Corporation

8/12/2013

4,400,000

4,351,151

48,849

1%

803,286

852,135

Chicago Shore
Corporation

3/17/2014

7,000,000

6,937,000

63,000

1%

Severn Bancorp, Inc.

278,297

60%

63,000

9/25/2013

23,393,000

23,367,268

25,732

0%

Oregon Bancorp,
Inc.

10/21/2013

3,216,000

3,216,000

0

0%

78%

0

Freeport
Bancshares, Inc.

4/14/2014

301,000

301,000

0

0%

78%

0

Severn Bancorp, Inc.

9/25/2013

40,000,000

40,196,000

(196,000)

0%

BNCCORP, Inc.

3/17/2014

20,093,000

20,114,700

(21,700)

0%

Tennessee Valley
Financial Holdings,
Inc

4/29/2013

3,000,000

3,041,330

(41,330)

(1%)

531,375

490,045

3/1/2013

10,500,000

10,728,783

(228,783)

(2%)

1,716,750

1,487,967

11/19/2013

3,370,000

3,446,196

(76,196)

(2%)

688,913

612,717

Northwest
Bancorporation, Inc.
Madison Financial
Corporation

1,754,475

5,995,000

1,780,207

5,799,000
(21,700)

Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

INVESTMENTS IN CPP BANKS SOLD AT A LOSS AT AUCTION, AS OF 9/30/2014

275

(CONTINUED)

Missed
Dividends

Total Loss
from Auction
Sales and
Missed
Dividends

(4%)

$352,380

$257,356

(883,309)

(5%)

3,204,600

2,321,291

12,907,297

(958,297)

(8%)

1,792,350

834,053

5,586,000

6,116,943

(530,943)

(10%)

1,288,716

757,773

10/21/2013

24,000,000

26,498,640

(2,498,640)

(10%)

3,300,000

801,360

Atlantic Bancshares,
Inc.

2/10/2014

2,000,000

2,275,000

(275,000)

(14%)

299,255

24,255

Patriot Bancshares,
Inc.

4/14/2014

26,038,000

29,736,177

(3,698,177)

(14%)

4,612,010

913,833

Security State Bank
Holding Company

6/24/2013

10,750,000

12,409,261

(1,659,261)

(15%)

2,254,985

595,724

Pathway Bancorp

761,588

164,142

7,601,750

1,671,202

449,080

41,418

3,973,050

487,296

Auction
Date

Investment

Net Proceeds

Auction Loss

4/29/2013

$2,400,000

$2,495,024

($95,024)

7/2/2014

16,800,000

17,683,309

4/29/2013

11,949,000

3/1/2013

Institution
Brogan Bankshares,
Inc.
White River
Bancshares
Company
Plumas Bancorp
Boscobel Bancorp,
Inc.
Eastern Virginia
Bankshares, Inc.

Percentage
of Shares
Discount Repurchased
Percentage by Institution

6/24/2013

3,727,000

4,324,446

(597,446)

(16%)

Royal Bancshares of
Pennsylvania, Inc.

7/2/2014

30,407,000

36,337,548

(5,930,548)

(20%)

Market
Bancorporation, Inc.

7/2/2014

2,060,000

2,467,662

(407,662)

(20%)

Pacific City Financial
Corporation

11/19/2013

16,200,000

19,685,754

(3,485,754)

(22%)

Total Auction Losses
Total Missed Dividends

58%

38%

53%

$781,314,736
$241,304,263

Notes: Numbers may not total due to rounding.
a
Treasury sold 70,028 of its shares in Old Second in the 3/1/2013 auction and the remaining 2,972 shares in the 3/15/2013 auction.
b
Treasury additionally sold 1,100 shares of its Series C stock in First Community Financial Partners, Inc. in this auction, but its largest investment in the bank was sold in the auction that closed on 9/12/2012,
and the data for the disposition of its investment is listed under the 9/12/2012 auction in this table.
c
Treasury sold 8,000 of its shares in First Western Financial, Inc. on 7/27/2012 and the remaining 12,440 in the 6/24/2013 auction.
d
This institution was auctioned separately from the other set that closed on the same date because it is a publicly traded company.
e
The original investment in Guaranty Federal Bancshares, Inc. was $17 million. The bank had previously paid down $5 million, leaving a $12 million investment remaining.
Sources: Treasury, Transactions Report, 9/30/2014; SNL Financial LLC data.

276

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

For a discussion of SIGTARP’s
August 20, 2013, recommendation
to Treasury regarding the inclusion of
SBLF funds as TARP repayments, see
SIGTARP’s October 2013 Quarterly
Report, pages 281-282.
For information on TARP banks that
refinanced into SBLF, see SIGTARP’s
April 9, 2013, audit report, “Banks
that Used the Small Business Lending
Fund to Exit TARP.”
For a detailed list of CPP banks that
refinanced into SBLF, see SIGTARP’s
October 2012 Quarterly Report, pages
88-92.
For a discussion of the impact of TARP
and SBLF on community banks, see
SIGTARP’s April 2012 Quarterly
Report, pages 145-167.
For more information on warrant
disposition, see SIGTARP’s audit
report of May 10, 2010, “Assessing
Treasury’s Process to Sell Warrants
Received from TARP Recipients.”

Exercise Price: Preset price at which
a warrant holder may purchase each
share. For warrants in publicly traded
institutions issued through CPP, this
was based on the average stock price
during the 20 days before the date
that Treasury granted preliminary CPP
participation approval.

CPP Banks Refinancing into CDCI and SBLF
On October 21, 2009, the Administration announced the Community
Development Capital Initiative (“CDCI”) as another TARP-funded program.497
Under CDCI, TARP made $570.1 million in investments in 84 eligible banks and
credit unions.498 Qualifying CPP banks applied for the new TARP program, and 28
banks were accepted. The 28 banks refinanced $355.7 million in CPP investments
into CDCI.499 For more information on CDCI, see “Community Development
Capital Initiative” in this section.
On September 27, 2010, the President signed into law the Small Business Jobs
Act of 2010 (“Jobs Act”), which created the non-TARP program SBLF for Treasury
to make up to $30 billion in capital investments in institutions with less than $10
billion in total assets.500 According to Treasury, it received a total of 935 SBLF
applications, of which 320 were TARP recipients under CPP (315) or CDCI (5).501
Treasury accepted 137 CPP participants into SBLF with financing of $2.7 billion.
The 137 banks in turn refinanced $2.2 billion of Treasury’s TARP preferred stock
with the SBLF investments.502 None of the CDCI recipients were approved for
participation.
Warrant Disposition
As required by EESA, Treasury received warrants when it invested in troubled
assets from financial institutions, with an exception for certain small institutions.
With respect to financial institutions with publicly traded securities, these warrants
gave Treasury the right, but not the obligation, to purchase a certain number of
shares of common stock at a predetermined price.503 Because the warrants rise in
value as a company’s share price rises, they permit Treasury (and the taxpayer) to
benefit from a firm’s potential recovery.504
For publicly traded institutions, the warrants received by Treasury under CPP
allowed Treasury to purchase additional shares of common stock in a number
equal to 15% of the value of the original CPP investment at a specifie exercise
price.505 Treasury’s warrants constitute assets with a fair market value that
Treasury estimates using relevant market quotes, financial models, and/or thirdparty valuations.506 As of September 30, 2014, Treasury had not exercised any
of these warrants.507 For privately held institutions, Treasury received warrants
to purchase additional preferred stock or debt in an amount equal to 5% of the
CPP investment. Treasury exercised these warrants immediately.508 Unsold and
unexercised warrants expire 10 years from the date of the CPP investment.509 As
of September 30, 2014, Treasury had received $8 billion through the sale of CPP
warrants obtained by TARP recipients.510
Repurchase of Warrants by Financial Institutions

Upon repaying its CPP investment, a recipient may seek to negotiate with
Treasury to buy back its warrants. As of September 30, 2014, 174 publicly traded
institutions had bought back $3.9 billion worth of warrants, of which $5.9 million
was purchased this quarter. As of that same date, 280 privately held institutions,
the warrants of which had been immediately exercised, bought back the resulting

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

additional preferred shares for a total of $173.3 million, of which $5.2 million was
bought back this quarter.511 Table 4.41 lists publicly traded institutions that repaid
TARP and repurchased warrants in the quarter ended September 30, 2014. Table
4.42 lists privately held institutions that had done so in the same quarter.512
TABLE 4.41

CPP WARRANT SALES AND REPURCHASES (PUBLIC) FOR THE QUARTER
ENDING 9/30/2014
Repurchase
Date

Company

7/23/2014

Popular, Inc.

Number of
Warrants
Repurchased

Amount of
Repurchase
($ Thousands)

2,093,284

$3,000,000.0

9/3/2014

Intervest Bancshares Corporation

691,882

2,892,066.0

7/16/2014

Bank of the Carolinas Corporation

475,204

0.0

3,260,370

$5,892,066.0

Total

Notes: Numbers may not total due to rounding. This table represents warrants for common stock issued to Treasury by publicly
traded TARP recipients. Treasury may hold one warrant for millions of underlying shares rather than millions of warrants of an
individual financial institution.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, responses to SIGTARP data calls, 1/4/2011, 1/7/2011, 4/6/2011,
7/8/2011, 10/7/2011, 10/11/2011, 1/11/2012, 4/5/2012, 7/9/2012, 10/12/2012, 4/12/2013, 7/11/2013, 10/10/2013,
1/8/2014, 4/11/2014, 7/15/2014, 10/10/2014.

TABLE 4.42

CPP WARRANT SALES AND REPURCHASES (PRIVATE) FOR THE QUARTER
ENDING 9/30/2014
Number of
Warrants
Repurchased

Amount of
Repurchase
($ Thousands)

1,125,000

$1,125.0

White River Bancshares Company / Signature
Bank of Arkansas

840,000

840.0

7/16/2014

First Community Bancshares, Inc / First
Community Bank

740,000

740.0

3/27/2013

Stonebridge Financial Corp.

549,000

549.0

7/23/2014

Greer Bancshares Incorporated

500,000

500.0

7/2/2014

United American Bank

435,000

435.0

3/28/2014

First Southwest Bancorporation, Inc.

275,000

275.0

3/28/2014

AmFirst Financial Services, Inc

250,000

250.0

Repurchase
Date

Company

8/29/2014

Central Bancorp, Inc. / United Central Bank

7/2/2014

a

7/3/2014

Marine Bank & Trust Company

150,000

150.0

3/28/2014

Alliance Bancshares, Inc.

149,000

149.0

7/2/2014

Market Bancorporation, Inc. / New Market Bank

105,000

105.0

7/2/2014

Maryland Financial Bank

85,000

85.0

5,203,000

$5,203.0

Total

Notes: Numbers may not total due to rounding. This table represents the preferred shares held by Treasury as a result of the exercise
of warrants issued by non-publicly traded TARP recipients. These warrants were exercised immediately upon the transaction date.
Treasury may hold one warrant for millions of underlying shares rather than millions of warrants of an individual financial institution.
a
S-Corporation Institution: issued subordinated debt instead of preferred stock.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury response to SIGTARP data call, 10/10/2014.

277

278

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Treasury Warrant Auctions

If Treasury and the repaying institution cannot agree upon the price for the
institution to repurchase its warrants, Treasury may conduct a public or private
offering to auction the warrants.513 As of September 30, 2014, the combined
proceeds from Treasury’s public and private warrant auctions totaled $5.5 billion.514
Public Warrant Auctions

In November 2009, Treasury began selling warrants via public auctions.515
Through September 30, 2014, Treasury had held 26 public auctions for warrants it
received under CPP, TIP, and AGP, raising a total of approximately $5.4 billion.516
Treasury did not conduct any public warrant auctions this quarter.517 Final closing
information for all public warrant auctions is shown in Table 4.43.

279

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.43

PUBLIC TREASURY WARRANT AUCTIONS, AS OF 9/30/2014
Auction Date
3/3/2010

Number of Warrants
Offered

Minimum
Bid Price

Selling
Price

Proceeds to Treasury
($ Millions)

Bank of America A Auction (TIP)a

150,375,940

$7.00

$8.35

$1,255.6

Bank of America B Auction (CPP)a

121,792,790

1.50

2.55

310.6

Company

12/10/2009

JPMorgan Chase

5/20/2010

Wells Fargo and Company

88,401,697

8.00

10.75

950.3

110,261,688

6.50

7.70

849.0

9/21/2010
4/29/2010

Hartford Financial Service Group, Inc.

52,093,973

10.50

13.70

713.7

PNC Financial Services Group, Inc.

16,885,192

15.00

19.20

324.2

Citigroup A Auction (TIP & AGP)

255,033,142

0.60

1.01

257.6

Citigroup B Auction (CPP)a

210,084,034

0.15

0.26

54.6

a

1/25/2011
9/16/2010

Lincoln National Corporation

13,049,451

13.50

16.60

216.6

5/6/2010

Comerica Inc.

11,479,592

15.00

16.00

183.7

12/3/2009

Capital One

12,657,960

7.50

11.75

148.7

11/29/2012

M&T Bank Corporation

1,218,522

23.50

1.35

32.3

2/8/2011

Wintrust Financial Corporation

1,643,295

13.50

15.80

26.0

6/2/2011

Webster Financial Corporation

3,282,276

5.50

6.30

20.4

SunTrust A Auctionb

6,008,902

2.00

2.70

16.2

SunTrust B Auctionb

11,891,280

1.05

1.20

14.2

1,707,456

5.00

5.00

15.6

595,829

16.00

19.00

11.3

9/22/2011
3/9/2010

Washington Federal, Inc.

3/10/2010

Signature Bank

12/15/2009

TCF Financial

3,199,988

1.50

3.00

9.6

12/5/2012

Zions Bancorporation

5,789,909

23.50

26.50

7.8

3/11/2010

Texas Capital Bancshares, Inc.

2/1/2011

Boston Private Financial Holdings, Inc.

758,086

6.50

6.50

6.7

2,887,500

1.40

2.20

6.4

5/18/2010

Valley National Bancorp

2,532,542

1.70

2.20

5.6

11/30/2011

Associated Banc-Corpc

3,983,308

0.50

0.90

3.6

6/2/2010

First Financial Bancorp

6/9/2010

Sterling Bancshares Inc.

Total

465,117

4.00

6.70

3.1

2,615,557

0.85

1.15

3.0

1,090,695,026

$5,446.4

Notes: Numbers may not total due to rounding.
a
Treasury held two auctions each for the sale of Bank of America and Citigroup warrants.
b
Treasury held two auctions for SunTrust’s two CPP investments dated 11/14/2008 (B auction) and 12/31/2008 (A auction).
c
According to Treasury, the auction grossed $3.6 million and netted $3.4 million.
Sources: The PNC Financial Services Group, Inc., “Final Prospectus Supplement,” 4/29/2010, www.sec.gov/Archives/edgar/data/713676/000119312510101032/d424b5.htm, accessed
10/1/2014; Valley National Bancorp, “Final Prospectus Supplement,” 5/18/2010, www.sec.gov/Archives/edgar/data/714310/000119312510123896/d424b5.htm, accessed 10/1/2014; Comerica
Incorporated, “Final Prospectus Supplement,” 5/6/2010, www.sec.gov/Archives/edgar/data/28412/000119312510112107/d424b5.htm, accessed 10/1/2014; Wells Fargo and Company, “Definitive
Prospectus Supplement,” 5/20/2010, www.sec.gov/Archives/edgar/data/72971/000119312510126208/d424b5.htm, accessed 10/1/2014; First Financial Bancorp, “Prospectus Supplement,”
6/2/2010, www.sec.gov/Archives/edgar/data/708955/000114420410031630/v187278_424b5.htm, accessed 10/1/2014; Sterling Bancshares, Inc., “Prospectus Supplement,” 6/9/2010,
www.sec.gov/Archives/edgar/data/891098/000119312510136584/dfwp.htm, accessed 10/1/2014; Signature Bank, “Prospectus Supplement,” 3/10/2010, files.shareholder.com/downloads/
SBNY/1456015611x0x358381/E87182B5-A552-43DD-9499-8B56F79AEFD0/8-K__Reg_FD_Offering_Circular.pdf, accessed 10/1/2014; Texas Capital Bancshares, Inc., “Prospectus Supplement,”
3/11/2010, www.sec.gov/Archives/edgar/data/1077428/000095012310023800/d71405ae424b5.htm, accessed 10/1/2014; Bank of America, “Form 8-K,” 3/3/2010, www.sec.gov/Archives/edgar/
data/70858/000119312510051260/d8k.htm, accessed 10/1/2014; Bank of America, “Prospectus Supplement,” 3/1/2010, www.sec.gov/Archives/edgar/data/70858/000119312510045775/
d424b2.htm, accessed 10/1/2014; Washington Federal, Inc., “Prospectus Supplement,” 3/9/2010, www.sec.gov/Archives/edgar/data/936528/000119312510052062/d424b5.htm, accessed
10/1/2014; TCF Financial, “Prospectus Supplement,” 12/16/2009, www.sec.gov/Archives/edgar/data/814184/000104746909010786/a2195869z424b5.htm, accessed 10/1/2014; JPMorgan
Chase, “Prospectus Supplement,” 12/11/2009, www.sec.gov/Archives/edgar/data/19617/000119312509251466/d424b5.htm, accessed 10/1/2014; Capital One Financial, “Prospectus Supplement,”
12/3/2009, www.sec.gov/Archives/edgar/data/927628/000119312509247252/d424b5.htm, accessed 10/1/2014; Treasury, Transactions Report, 9/30/2013; Hartford Financial Services Group,
Prospectus Supplement to Prospectus filed with the SEC 8/4/2010, www.sec.gov/Archives/edgar/data/874766/000095012310087985/y86606b5e424b5.htm, accessed 10/1/2014; Treasury,
“Treasury Announces Pricing of Public Offering to Purchase Common Stock of The Hartford Financial Services Group, Inc.,” 9/22/2010, www.treasury.gov/press-center/press-releases/Pages/tg865.
aspx, accessed 10/1/2014; Lincoln National Corporation, Prospectus Supplement to Prospectus filed with SEC 3/10/2009, www.sec.gov/Archives/edgar/data/59558/000119312510211941/
d424b5.htm, accessed 10/1/2014; Lincoln National Corporation, 8-K, 9/22/2010, www.sec.gov/Archives/edgar/data/59558/000119312510214540/d8k.htm, accessed 10/1/2014; Treasury,
Section 105(a) Report, 1/31/2011; Treasury, “Treasury Announces Public Offerings of Warrants to Purchase Common Stock of Citigroup Inc.,” 1/24/2011, www.treasury.gov/press-center/pressreleases/Pages/tg1033.aspx, accessed 10/1/2014; Citigroup, Prospectus, 1/24/2011, www.sec.gov/Archives/edgar/data/831001/000095012311004665/y89177b7e424b7.htm, accessed
10/1/2014; Citigroup, Prospectus, 1/24/2011, www.sec.gov/Archives/edgar/data/831001/000095012311004665/y89177b7e424b7.htm, accessed 10/1/2014; Boston Private Financial Holdings,
Inc., Prospectus, 1/28/2011, www.sec.gov/Archives/edgar/data/821127/000119312511021392/d424b5.htm, accessed 10/1/2014; Boston Private Financial Holdings, Inc. 8-K, 2/7/2011, www.
sec.gov/Archives/edgar/data/821127/000144530511000189/tarpwarrant020711.htm, accessed 10/1/2014; Wintrust Financial Corporation, Prospectus, 2/8/2011, www.sec.gov/Archives/edgar/
data/1015328/000095012311011007/c62806b5e424b5.htm, accessed 10/1/2014; Treasury, Section 105(a) Report, 1/31/2011; Treasury, “Treasury Announces Public Offerings of Warrants to
Purchase Common Stock of Citigroup Inc.,” 1/24/2011, www.treasury.gov/press-center/press-releases/Pages/tg1033.aspx, accessed 10/1/2014; Treasury, Citigroup Preliminary Prospectus – CPP
Warrants, 1/24/2011, www.sec.gov/Archives/edgar/data/831001/000095012311004666/y89178b7e424b7.htm, accessed 10/1/2014; Citigroup, Preliminary Prospectus – TIP & AGP Warrants,
1/24/2011, www.sec.gov/Archives/edgar/data/831001/000095012311004665/y89177b7e424b7.htm, accessed 10/1/2014; Treasury, responses to SIGTARP data call, 4/6/2011, 7/14/2011,
10/5/2011, 10/11/2011, and 1/11/2012; Treasury Press Release, “Treasury Department Announces Public Offerings of Warrants to Purchase Common Stock of SunTrust Banks, Inc.,” 9/21/2011,
www.treasury.gov/press-center/press-releases/Pages/tg1300.aspx, accessed 10/1/2014; “Treasury Department Announces Public Offering of Warrants to Purchase Common Stock of Associated
Banc-Corp,” 11/29/2011, www.treasury.gov/press-center/press-releases/Pages/tg1372.aspx, accessed 10/1/2014; Treasury, “Treasury Department Announces Public Offering of Warrant to Purchase
Common Stock of M&T Bank Corporation,” 12/10/2012, www.treasury.gov/press-center/press-releases/Pages/tg1793.aspx, accessed 10/1/2014; Treasury, “Treasury Department Announces Public
Offering of Warrants to Purchase Common Stock of Zions Bancorporation,” 11/28/2012, www.treasury.gov/press-center/press-releases/Pages/tg1782.aspx, accessed 10/1/2014.

280

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Private Warrant Auctions
Qualified Institutional Buyers (“QIB”):
Institutions that under U.S. securities
law are permitted to buy securities
that are exempt from registration
under investor protection laws and
to resell those securities to other
QIBs. Generally these institutions own
and invest at least $100 million in
securities, or are registered brokerdealers that own or invest at least $10
million in securities.
Accredited Investors: Individuals or
institutions that by law are considered
financially sophisticated enough so
that they can invest in ventures that
are exempt from investor protection
laws. Under U.S. securities laws, these
include many financial companies,
pension plans, wealthy individuals,
and top executives or directors of the
issuing companies.

On November 17, 2011, Treasury conducted a private auction to sell the warrants
of 17 CPP institutions for $12.7 million.518 On June 6, 2013, it conducted a second
private auction to sell the warrants of 16 banks for $13.9 million.519 Details from
both auctions are listed in Table 4.44. Treasury stated that private auctions were
necessary because the warrants did not meet the listing requirements for the major
exchanges, it would be more cost-effective for these smaller institutions, and that
grouping the warrants of several institutions in a single auction would raise investor
interest in the warrants.520 The warrants were not registered under the Securities
Act of 1933 (the “Act”). As a result, Treasury stated that the warrants were offered
only in private transactions to “(1) ‘qualified institutional buyers’ as defined in
Rule 144A under the Act, (2) the issuer, and (3) a limited number of ‘accredited
investors’ affiliated with the issuer.”521

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.44

PRIVATE TREASURY WARRANT AUCTIONS AS OF 9/30/2014
Number of
Warrants Offered

Proceeds to
Treasury

Eagle Bancorp, Inc.

385,434

$2,794,422

11/17/2011

Horizon Bancorp

212,188

1,750,551

11/17/2011

Bank of Marin Bancorp

154,908

1,703,984

Date

Company

11/17/2011

11/17/2011

First Bancorp (of North Carolina)

616,308

924,462

11/17/2011

Westamerica Bancorporation

246,698

878,256

11/17/2011

Lakeland Financial Corp

198,269

877,557

11/17/2011

F.N.B. Corporation

651,042

690,100

11/17/2011

Encore Bancshares

364,026

637,071

11/17/2011

LCNB Corporation

217,063

602,557

11/17/2011

Western Alliance Bancorporation

787,107

415,000

11/17/2011

First Merchants Corporation

991,453

367,500

11/17/2011

1st Constitution Bancorp

231,782

326,576

11/17/2011

Middleburg Financial Corporation

104,101

301,001

11/17/2011

MidSouth Bancorp, Inc.

104,384

206,557

11/17/2011

CoBiz Financial Inc.

895,968

143,677

11/17/2011

First Busey Corporation

573,833

63,677

11/17/2011

First Community Bancshares, Inc.

88,273

30,600

6/6/2013

Banner Corporation

243,998

134,201

6/6/2013

Carolina Trust Bank

86,957

19,132

6/6/2013

Central Pacific Financial Corp.

6/6/2013

Colony Bankcorp, Inc.

79,288

751,888

500,000

810,000

6/6/2013

Community West Bancshares

521,158

698,351

6/6/2013

Flagstar Bancorp, Inc.

645,138

12,905

6/6/2013

Heritage Commerce Corp

462,963

140,000

6/6/2013

International Bancshares
Corporation

1,326,238

4,018,511

6/6/2013

Mainsource Financial Group, Inc.

571,906

1,512,177

6/6/2013

Metrocorp Bancshares, Inc.

771,429

2,087,368

6/6/2013

Old Second Bancorp, Inc.

815,339

106,891

6/6/2013

Parke Bancorp, Inc.

438,906

1,650,288

6/6/2013

S&T Bancorp, Inc.

517,012

527,361

6/6/2013

Timberland Bancorp, Inc.

370,899

1,301,856

6/6/2013

United Community Banks, Inc.

219,908

6,677

6/6/2013

Yadkin Financial Corporation

91,178

55,677

6/6/2013

Yadkin Financial Corporation

Total

128,663

20,000

14,613,817

$26,566,831

Sources: “Treasury Announces Completion of Private Auction to Sell Warrant Positions,” 11/18/2011, www.treasury.gov/presscenter/press-releases/Pages/tg1365.aspx, accessed 7/1/2014; “Treasury Completes Auction to Sell Warrants Positions,”
6/6/2013, www.treasury.gov/press-center/press-releases/Pages/jl1972.aspx, accessed 10/1/2014.

281

282

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

For more information on CDCI
institutions that remain in TARP and
their use of TARP funds, see the report
in SIGTARP’s April 2014 Quarterly
Report: “Banks and Credit Unions
in TARP’s CDCI Program Face
Challenges.”

Community Development Financial
Institutions (“CDFIs”): Financial
institutions eligible for Treasury funding
to serve urban and rural low-income
communities through the CDFI Fund.
CDFIs were created in 1994 by the
Riegle Community Development and
Regulatory Improvement Act.

Community Development Capital Initiative
The Administration announced the Community Development Capital Initiative
(“CDCI”) on October 21, 2009. According to Treasury, the program was intended
to help small businesses obtain credit.522 Under CDCI, TARP made $570.1
million in investments in the preferred stock or subordinated debt of 84 eligible
banks, bank holding companies, thrifts, and credit unions certified as Community
Development Financial Institutions (“CDFIs”) by Treasury. According to Treasury,
these lower-cost capital investments were intended to strengthen the capital base
of CDFIs and enable them to make more loans in low and moderate-income
communities.523 CDCI was open to certified, qualifying CDFIs or financial
institutions that applied for CDFI status by April 30, 2010.524
According to Treasury, CPP-participating CDFIs that were in good standing
could exchange their CPP investments for CDCI investments.525 CDCI closed to
new investments on September 30, 2010.526
Treasury invested $570.1 million in 84 institutions under the program — 36
banks or bank holding companies and 48 credit unions.527 Of the 36 investments in
banks and bank holding companies, 28 were conversions from CPP (representing
$363.3 million of the total $570.1 million); the remaining eight were not CPP
participants. Treasury provided an additional $100.7 million in CDCI funds to 10
of the banks converting CPP investments. Only $106 million of the total CDCI
funds went to institutions that were not in CPP.

Status of Funds
As of September 30, 2014, 68 institutions remained in CDCI. Fifteen institutions
have fully repaid Treasury and have exited CDCI. Three institutions have partially
repaid and remain in the program. Premier Bancorp, Inc., Wilmette, Illinois,
previously had its subsidiary bank fail and thus almost all of Treasury’s $6.8 million
investment was lost.528
As of September 30, 2014, taxpayers were still owed $471.7 million related
to CDCI.529 According to Treasury, it had realized losses of $6.7 million in the
program that will never be recovered, leaving $465 million outstanding.530
According to Treasury, $98.4 million of the CDCI principal (or 17%) had been
repaid as of September 30, 2014.531 As of September 30, 2014, Treasury had
received approximately $43.2 million in dividends and interest from CDCI
recipients.532 Tables 4.45 through 4.50 show banks and credit unions remaining in
CDCI by region and state as of September 30, 2014. Table 4.51 lists the current
status of all CDCI investments as of September 30, 2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.45

BANKS AND CREDIT UNIONS WITH CDCI PRINCIPAL REMAINING, BY REGION, AS OF
9/30/2014
Original
Number of
Participants

Remaining
Number of
Participants

Remaining
Investment

Remaining
Number of
Banks

Remaining
Number of
Credit Unions

Mid-Atlantic/Northeast

24

21

$67,151,000

5

16

Southeast

22

18

286,513,000

16

2

West

14

13

26,799,000

2

11

Southwest/South Central

11

8

58,112,000

2

6

Midwest

11

8

26,432,000

4

4

Mountain West/Plains
Total

2

0

0

0

0

84

68

$465,007,000

29

39

Source: Treasury, Transactions Report, 9/30/2014.

FIGURE 4.42

AMOUNT OF CDCI PRINCIPAL INVESTMENT REMAINING, BY REGION,
AS OF 9/30/2014
AK

MOUNTAIN WEST/
PLAINS
$0

WA

MT

OR
ID

WEST
$27 MILLION
GU
HI

CA

NV

ND

WY

MN

AZ

WI

SD

CO

IL

KS
OK

NM

MO

AR

NY
OH

IN

PA
WV VA

KY

ME

MID-ATLANTIC/
NORTHEAST
$67 MILLION

NH
MA
CT RI
NJ
DE
MD

NC

TN
MS AL

TX

VT

MI

IA

NE
UT

MIDWEST
$26 MILLION

SC
GA

SOUTHEAST
$287 MILLION

LA
FL

SOUTHWEST/
SOUTH CENTRAL
$58 MILLION

WEST
MOUNTAIN WEST/PLAINS
SOUTHWEST/SOUTH CENTRAL

MIDWEST
MID-ATLANTIC/NORTHEAST
SOUTHEAST

PR

283

284

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Mid-Atlantic/Northeast
TABLE 4.46

BANKS AND CREDIT UNIONS WITH CDCI PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

ME

VT

NH
MA

NY

CT
NJ
DE
MD
DC

PA
WV VA
WV

RI

Original
Number of
Participants

Remaining
Number of
Participants

Remaining
Investment

Remaining
Number of
Banks

Remaining
Number of
Credit Unions

CT

1

1

$7,000

0

1

DC

3

3

13,303,000

2

1

NJ

2

1

31,000

0

1

NY

13

12

42,660,000

2

10

PA

1

1

100,000

0

1

VA

3

2

9,959,000

1

1

VT

MID-ATLANTIC/
NORTHEAST

>$10 million
$1 million-$10 million
$1-$1 million
$0

Principal investment
remaining in CDCI banks

Total

1

1

1,091,000

0

1

24

21

$67,151,000

5

16

Source: Treasury, Transactions Report, 9/30/2014.

Southeast
TABLE 4.47

BANKS AND CREDIT UNIONS WITH CDCI PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

NC

TN
MS

AL

SC
GA
PR
FL

SOUTHEAST

Principal investment
remaining in CDCI
banks

>$10 million
$1 million-$10 million
$1-1 million
$0

Original
Number of
Participants

Remaining
Number of
Participants

Remaining
Investment

Remaining
Number of
Banks

Remaining
Number of
Credit Unions

AL

3

3

$16,698,000

2

1

GA

2

2

12,841,000

2

0

MS

12

10

220,444,000

9

1

NC

3

1

11,735,000

1

0

SC

1

1

22,000,000

1

0

TN

1

1

2,795,000

1

0

22

18

$286,513,000

16

2

Total

Source: Treasury, Transactions Report, 9/30/2014.

285

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

West
TABLE 4.48

BANKS AND CREDIT UNIONS WITH CDCI PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

WA
AK

OR

Original
Number of
Participants

Remaining
Number of
Participants

Remaining
Investment

Remaining
Number of
Banks

Remaining
Number of
Credit Unions

AK

1

1

$1,600,000

0

1

CA

9

8

21,503,000

2

6

GU

1

1

2,650,000

0

1

HI

2

2

971,000

0

2

WA

GU

Total

CA

1

1

75,000

0

1

14

13

$26,799,000

2

11

Source: Treasury, Transactions Report, 9/30/2014.

HI
WEST

Principal investment
remaining in CDCI banks

>$10 million
$1 million-$10 million
$1-$1 million
$0

Southwest/South Central
TABLE 4.49

BANKS AND CREDIT UNIONS WITH CDCI PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

AZ

OK

NM
TX

Original
Number of
Participants
AR
LA

Principal investment
remaining in CDCI banks

>$10 million
$1 million-$10 million
$1-$1 million
$0

Remaining
Investment

Remaining
Number of
Banks

Remaining
Number of
Credit Unions

AR

1

1

$33,800,000

1

0

AZ

1

1

2,500,000

0

1

LA

6

4

18,204,000

1

3

TX

3

2

3,608,000

0

2

11

8

$58,112,000

2

6

Total

SOUTHWEST/
SOUTH CENTRAL

Remaining
Number of
Participants

Source: Treasury, Transactions Report, 9/30/2014.

286

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Midwest
TABLE 4.49

BANKS AND CREDIT UNIONS WITH CDCI PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

MN

WI

MI

IA

OH

IN

IL
MO

Remaining
Number of
Participants

Remaining
Investment

Remaining
Number of
Banks

Remaining
Number of
Credit Unions

IL

7

6

$25,193,000

4

2

IN

2

2

1,239,000

0

2

MN

1

0

0

0

0

WI

1

0

0

0

0

11

8

$26,432,000

4

4

Total

KY

MIDWEST

Original
Number of
Participants

Source: Treasury, Transactions Report, 9/30/2014.

>$10 million
$1 million -$10 million
$1-$1 million
$0

Principal investment
remaining in CDCI
banks

Mountain West/Plains
TABLE 4.50

BANKS AND CREDIT UNIONS WITH CDCI PRINCIPAL REMAINING, BY STATE, AS OF 9/30/2014

MT
ID
NV

ND

WY

MT

SD
NE

UT

CO

MOUNTAIN WEST/
PLAINS
Principal investment
remaining in CDCI banks

Original
Number of
Participants

Remaining
Number of
Participants

Remaining
Investment

Remaining
Number of
Banks

Remaining
Number of
Credit Unions

1

0

$0

0

0

WY

1

0

0

0

0

Total

2

0

$0

0

0

Source: Treasury, Transactions Report, 9/30/2014.

KS
>$10 million
$1 million-$10 million
$1-$1 million
$0

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.51

CDCI INVESTMENT SUMMARY, AS OF 9/30/2014
Institution

Amount
from CPP

Additional
Investment

Total CDCI
Investment

$50,400,000

$30,514,000

$80,914,000

Institutions Remaining in CDCI
BancPlus Corporation
Community Bancshares of Mississippi,
Inc.

54,600,000

Southern Bancorp, Inc.

11,000,000

22,800,000

33,800,000

Security Federal Corporation

18,000,000

4,000,000

22,000,000

Carver Bancorp, Inc

18,980,000

Security Capital Corporation

17,910,000

The First Bancshares, Inc.

5,000,000

54,600,000

18,980,000
17,910,000
12,123,000

17,123,000

First American International Corp.

17,000,000

17,000,000

State Capital Corporation

15,750,000

15,750,000

Guaranty Capital Corporation

14,000,000

14,000,000

Citizens Bancshares Corporation
M&F Bancorp, Inc.

7,462,000

4,379,000

11,735,000

11,841,000
11,735,000

Liberty Financial Services, Inc.

5,645,000

5,689,000

11,334,000

Mission Valley Bancorp

5,500,000

4,836,000

10,336,000

United Bancorporation of Alabama, Inc.
IBC Bancorp, Inc.

10,300,000
4,205,000

10,300,000
3,881,000

Fairfax County Federal Credit Union

8,044,000

The Magnolia State Corporation
First Eagle Bancshares, Inc.

8,086,000
7,922,000

7,875,000

7,875,000

Carter Federal Credit Union*

6,300,000

First Vernon Bancshares, Inc.

6,245,000

6,245,000

IBW Financial Corporation

6,000,000

6,000,000

CFBanc Corporation

5,781,000

American Bancorp of Illinois, Inc.
Lafayette Bancorp, Inc.

5,457,000
4,551,000

4,551,000

Hope Federal Credit Union
Community Bank of the Bay

4,520,000
1,747,000

2,313,000

4,060,000

Bainbridge Bancshares, Inc.

3,372,000

Border Federal Credit Union

3,260,000

Kilmichael Bancorp, Inc.

3,154,000

PGB Holdings, Inc.

3,000,000

3,000,000

Santa Cruz Community Credit Union

2,828,000

Cooperative Center Federal Credit Union

2,799,000

Tri-State Bank of Memphis

2,795,000

2,795,000
Continued on next page

287

288

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

CDCI INVESTMENT SUMMARY, AS OF 9/30/2014
Institution

Amount
from CPP

(CONTINUED)

Additional
Investment

Total CDCI
Investment

Institutions Remaining in CDCI
Community First Guam Federal Credit
Union

2,650,000

Shreveport Federal Credit Union

2,646,000

Pyramid Federal Credit Union

2,500,000

Alternatives Federal Credit Union

2,234,000

Virginia Community Capital, Inc.

1,915,000

Southern Chautauqua Federal Credit Union

1,709,000

Tongass Federal Credit Union

1,600,000

D.C. Federal Credit Union

1,522,000

Vigo County Federal Credit Union

1,229,000

Opportunities Credit Union

1,091,000

Butte Federal Credit Union

1,000,000

Lower East Side People’s Federal Credit
Union

898,000

Independent Employers Group Federal
Credit Union

698,000

Bethex Federal Credit Union

502,000

Community Plus Federal Credit Union

450,000

Liberty County Teachers Federal Credit
Union*

435,000

Tulane-Loyola Federal Credit Union

424,000

Northeast Community Federal Credit
Union

350,000

North Side Community Federal Credit
Union

325,000

Genesee Co-op Federal Credit Union

300,000

Brooklyn Cooperative Federal Credit Union

300,000

Union Settlement Federal Credit Union

295,000

Neighborhood Trust Federal Credit Union

283,000

Prince Kuhio Federal Credit Union

273,000

Phenix Pride Federal Credit Union

153,000

Buffalo Cooperative Federal Credit Union

145,000

Hill District Federal Credit Union

100,000

Episcopal Community Federal Credit
Union

100,000

Thurston Union of Low-Income People
(TULIP) Cooperative Credit Union

75,000
Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

CDCI INVESTMENT SUMMARY, AS OF 9/30/2014
Amount
from CPP

Institution

(CONTINUED)

Additional
Investment

Total CDCI
Investment

Institutions Remaining in CDCI
Renaissance Community Development
Credit Union

31,000

Faith Based Federal Credit Union

30,000

Fidelis Federal Credit Union

14,000

Union Baptist Church Federal Credit Union

10,000

East End Baptist Tabernacle Federal
Credit Union
Total

7,000
$299,700,000

$90,535,000

$469,966,000

Institutions Fully Repaid
First M&F Corporation

$30,000,000

University Financial Corp, Inc.

11,926,000

PSB Financial Corporation

$30,000,000
$10,189,000

9,734,000

22,115,000
9,734,000

Freedom First Federal Credit Union

9,278,000

BankAsiana

5,250,000

First Choice Bank

5,146,000

5,146,000

Bancorp of Okolona, Inc.

3,297,000

Atlantic City Federal Credit Union

2,500,000

Gateway Community Federal Credit Union

1,657,000

Southside Credit Union

1,100,000

Brewery Credit Union

1,096,000

First Legacy Community Credit Union

1,000,000

UNO Federal Credit Union

743,000

Greater Kinston Credit Union

350,000

UNITEHERE Federal Credit Union (Workers
United Federal Credit Union)

57,000

Total

$56,806,000

$10,189,000

$93,323,000

Bankrupt or with Failed Subsidiary Banks
Premier Bancorp, Inc.
Total
Overall Total

$6,784,000

$6,784,000

$6,784,000

$6,784,000

$363,290,000

Notes: Numbers may not total due to rounding.
* Institution has made a partial payment on Treasury’s investment.
Source: Treasury, Transactions Report, 9/30/2014.

$100,724,000

$570,073,000

289

290

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Missed Dividends
As of September 30, 2014, two institutions still in CDCI had unpaid dividend
or interest payments to Treasury totaling $34,275.533 As a result of a bankrupt
institution that exited CDCI without remitting its interest payments, the total
value of all missed payments equals $350,899. Treasury has the right to appoint
two directors to the board of directors of institutions that have missed eight
dividends and interest payments, whether consecutive or nonconsecutive.534 As
of September 30, 2014, Treasury had not appointed directors to the board of any
CDCI institution.535 Treasury has sent an observer to the board meetings of one
institution, First Vernon Bancshares, Inc., Vernon, Alabama, however no observer
is currently attending board meetings of this institution.536 Treasury made a request
to send an observer to the board meetings of First American International Corp.,
Brooklyn, New York, in February 2013, but the institution, which remains in TARP
as of September 30, 2014, rejected Treasury’s request.537 Table 4.52 lists CDCI
institutions that are not current on dividend or interest payments.
TABLE 4.52

CDCI-RELATED MISSED DIVIDEND AND INTEREST PAYMENTS, AS OF
9/30/2014
Institution

Dividend or
Payment Type

Number of Missed
Payments

Value of Missed
Payments

Premier Bancorp, Inc.*

Interest

6

$316,624

Tri-State Bank of Memphis

Non-Cumulative

1

13,975

Community Bank of the Bay

Non-Cumulative

1

20,300

Total
Notes: Numbers may not total due to rounding.
* On 3/23/2012, the subsidiary bank of Premier Bancorp, Inc. failed.
Source: Treasury, Dividends and Interest Report, 10/10/2014.

$350,899

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Terms for Senior Securities and Dividends
An eligible bank, bank holding company, or thrift could apply to receive capital in
an amount up to 5% of its risk-weighted assets. A credit union (which is a memberowned, nonprofit financial institution with a capital and governance structure
different from that of for-profit banks) could apply for Government funding of up
to 3.5% of its total assets — roughly equivalent to the 5% of risk-weighted assets
for banks.538 Participating credit unions and S corporations issued subordinated
debt to Treasury in lieu of the preferred stock issued by other CDFI participants.539
Many CDFI investments have an initial dividend rate of 2%, which increases to
9% after eight years. Participating S corporations pay an initial rate of 3.1%, which
increases to 13.8% after eight years.540 A CDFI participating in CPP had the
opportunity to request to convert those shares into CDCI shares, thereby reducing
the annual dividend rate it pays the Government from 5% to as low as 2%.541
According to Treasury, CDFIs were not required to issue warrants because of the
de minimis exception in EESA, which grants Treasury the authority to waive the
warrant requirement for qualifying institutions in which Treasury invested $100
million or less.
If during the application process a CDFI’s primary regulator deemed it to
be undercapitalized or to have “quality of capital issues,” the CDFI had the
opportunity to raise private capital to achieve adequate capital levels. Treasury
would match the private capital raised on a dollar-for-dollar basis, up to a total of
5% of the financial institution’s risk-weighted assets. In such cases, private investors
had to agree to assume any losses before Treasury.542

Risk-Weighted Assets: Risk-based
measure of total assets held by
a financial institution. Assets are
assigned broad risk categories. The
amount in each risk category is then
multiplied by a risk factor associated
with that category. The sum of the
resulting weighted values from each of
the risk categories is the bank’s total
risk-weighted assets.

291

292

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

For more on SIGTARP’s September
2012 recommendation to Treasury and
the Federal Reserve regarding AIG’s
designation as a systemically important
financial institution, see SIGTARP’s
July 2013 Quarterly Report, pages
201-203.
For more information on AIG and how
the company changed while under
TARP, see SIGTARP’s July 2012
Quarterly Report, pages 151-167.

Special Purpose Vehicle (“SPV”):
A legal entity, often off-balancesheet, that holds transferred assets
presumptively beyond the reach of the
entities providing the assets, and that
is legally isolated from its sponsor or
parent company.

For a more detailed description of
the AIG Recapitalization Plan, see
SIGTARP’s January 2014 Quarterly
Report, pages 219-220.
For more information on Treasury’s
sales of AIG common shares and AIG’s
buybacks of shares, see SIGTARP’s
July 2013 Quarterly Report, page 131.
For more information on Treasury’s
Equity Ownership Interest in AIG, see
SIGTARP’s January 2014 Quarterly
Report, page 220.

Systemically Significant Failing Institutions Program
According to Treasury, the Systemically Significant Failing Institutions (“SSFI”)
program was established to “provide stability and prevent disruptions to financial
markets from the failure of a systemically significant institution.”543 Through
SSFI, between November 2008 and April 2009, Treasury invested $67.8 billion
in TARP funds in American International Group, Inc. (“AIG”), the program’s sole
participant.544 AIG also received bailout funding from the Federal Reserve Bank
of New York (“FRBNY”). In January 2011, FRBNY and Treasury restructured
their agreements with AIG to use additional TARP funds and AIG funds to pay off
amounts owed to FRBNY and transfer FRBNY’s common stock and its interests to
Treasury.545
AIG has repaid the amounts owed to both Treasury and FRBNY. Treasury’s
investment in AIG ended on March 1, 2013.546
According to Treasury, taxpayers have received full payment on FRBNY’s loans,
plus interest and fees of $6.8 billion; full repayment of the loans to two special
purpose vehicles (“SPVs”), called Maiden Lane II and Maiden Lane III, plus $8.2
billion in gains from securities cash flows and sales and $1.3 billion in interest;
and full payment of the insurance-business SPVs, plus interest and fees of $1.4
billion547 Treasury’s books and records reflect only the shares of AIG that Treasury
received in TARP, reflecting that taxpayers have recouped $54.4 billion of the
$67.8 billion in TARP funds spent and realized losses on the sale of TARP shares
from an accounting standpoint of $13.5 billion548 However, because TARP funds
paid off amounts owed to FRBNY in return for stock, Treasury’s position is that the
Government has made $4.1 billion selling AIG common shares and $959 million in
dividends, interest, and other income.549

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Targeted Investment Program
Treasury invested a total of $40 billion in two financial institutions, Citigroup
Inc. (“Citigroup”) and Bank of America Corp. (“Bank of America”), through the
Targeted Investment Program (“TIP”). Treasury invested $20 billion in Citigroup
on December 31, 2008, and $20 billion in Bank of America on January 16, 2009,
in return for preferred shares paying quarterly dividends at an annual rate of 8%
and warrants from each institution.550 According to Treasury, TIP’s goal was to
“strengthen the economy and protect American jobs, savings, and retirement
security [where] the loss of confidence in a financial institution could result in
significant market disruptions that threaten the financial strength of similarly
situated financial institutions.”551 Both banks repaid TIP in December 2009.552 On
March 3, 2010, Treasury auctioned the Bank of America warrants it received under
TIP for $1.24 billion.553 On January 25, 2011, Treasury auctioned the Citigroup
warrants it had received under TIP for $190.4 million.554

Asset Guarantee Program
Under the Asset Guarantee Program (“AGP”), Treasury, the Federal Deposit
Insurance Corporation (“FDIC”), the Federal Reserve, and Citigroup agreed to
provide loss protection on a pool of Citigroup assets valued at approximately $301
billion. In return, as a premium, the Government received warrants to purchase
Citigroup common stock and $7 billion in preferred stock. The preferred stock was
subsequently exchanged for trust preferred securities (“TRUPS”).555
Treasury received $4 billion of the TRUPS and FDIC received $3 billion.556
Although Treasury’s asset guarantee was not a direct cash investment, it exposed
taxpayers to a potential TARP loss of $5 billion. On December 23, 2009, in
connection with Citigroup’s TIP repayment, Citigroup and Treasury terminated
the AGP agreement. Although at the time of termination the asset pool suffered
a $10.2 billion loss, this number was below the agreed-upon deductible and the
Government suffered no loss.557
At that time, Treasury agreed to cancel $1.8 billion of the TRUPS issued by
Citigroup, reducing the premium it received from $4 billion to $2.2 billion, in
exchange for the early termination of the loss protection. FDIC retained all of its
$3 billion in securities.558 Pursuant to that termination agreement, on December
28, 2012, FDIC transferred $800 million of those securities to Treasury because
Citigroup’s participation in FDIC’s Temporary Liquidity Guarantee Program closed
without a loss.559 On February 4, 2013, Treasury exchanged the $800 million of
securities it received from FDIC into Citigroup subordinated notes, which it then
sold for $894 million.560
Separately, on September 29, 2010, Treasury entered into an agreement with
Citigroup to exchange the remaining $2.2 billion in Citigroup TRUPS that it then
held under AGP for new TRUPS. Because the interest rate necessary to receive
par value was below the interest rate paid by Citigroup to Treasury, Citigroup
increased the principal amount of the securities sold by Treasury by an additional
$12 million, thereby enabling Treasury to receive an additional $12 million in

Trust Preferred Securities (“TRUPS”):
Securities that have both equity
and debt characteristics created by
establishing a trust and issuing debt
to it.

For a discussion of the basis of the
decision to provide Federal assistance
to Citigroup, see SIGTARP’s audit
report, “Extraordinary Financial
Assistance Provided to Citigroup,
Inc.,” dated January 13, 2011.

293

294

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

proceeds from the $2.2 billion sale of the Citigroup TRUPS, which occurred on
September 30, 2010.561 On January 25, 2011, Treasury auctioned the Citigroup
warrants it had received under AGP for $67.2 million.562 In addition to recovering
the full bailout amount, taxpayers have received $13.4 billion over the course of
Citigroup’s participation in AGP, TIP, and CPP, including dividends, other income,
and warrant sales.563
Bank of America announced a similar asset guarantee agreement with respect
to approximately $118 billion in Bank of America assets, but the final agreement
was never executed. Bank of America paid $425 million to the Government as a
termination fee.564 Of this $425 million, $276 million was paid to Treasury, $92
million was paid to FDIC, and $57 million was paid to the Federal Reserve.565

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

AUTOMOTIVE INDUSTRY SUPPORT PROGRAMS

During the financial crisis, Treasury, through TARP, launched three automotive
industry support programs: the Automotive Industry Financing Program (“AIFP”),
the Auto Supplier Support Program (“ASSP”), and the Auto Warranty Commitment
Program (“AWCP”). According to Treasury, these programs were established “to
prevent the collapse of the U.S. auto industry, which would have posed a significant
risk to financial market stability, threatened the overall economy, and resulted in
the loss of one million U.S. jobs.”566
On December 9, 2013, Treasury sold its remaining shares of General Motors
Company (“GM”) common stock.567 Separately, on March 20, 2014, Treasury
wrote off an $826 million administrative claim in the company’s 2009 bankruptcy,
ending all taxpayer involvement in GM.568 As of September 30, 2014, Ally Financial
Inc. (“Ally Financial”), formerly GMAC Inc., is the only remaining auto-related
company in which Treasury owns a stake, with $3.7 billion owed to taxpayers.
On August 14, 2014, Treasury announced that “it would continue to wind down
its investment in Ally Financial (Ally) by selling additional shares of common
stock through its first pre-defined written trading plan.”569 The first trading plan
concluded on September 12, 2014 with the sale of 8,890,000 shares, recovering
approximately $218.7 million and reducing Treasury’s stake to 13.8 %.570 Following
this transaction, Treasury held 66,175,340 shares of Ally Financial common
stock. On October 17, 2014, Treasury announced the conclusion of its second
trading plan with the sale of 11,249,044 shares, recovering approximately $245.5
million. Treasury now holds approximately 54.9 million shares of common stock, or
approximately 11.4% of Ally Financial.571 For the Government to break even on its
investment, Ally’s remaining shares would need to trade at approximately $64 per
share — triple the closing price per share of Ally Financial on October 17, 2014.572
Earlier, on January 23, 2014, Treasury sold 410,000 shares of Ally Financial
common stock for approximately $3 billion in a private placement, reducing its
stake to 37% of the company’s stock.573 Following this, on April 15, 2014, Treasury
sold 95 million shares of Ally common stock for approximately $2.4 billion ($25 per
share) as part of an initial public offering (“IPO”). Following the Ally Financial IPO,
Treasury reported that it would still hold 82,311,010 shares; reducing Treasury’s
stake in Ally to about 17%.574 Subsequently, on May 14, 2014 Treasury exercised its
over-allotment option to sell an additional 7,245,670 shares of Ally common stock
at the IPO price of $25, recovering $181 million and further reducing its stake to
approximately 16%. Following this transaction, Treasury was still owed $4 billion.575
As of September 30, 2014, taxpayers had lost $11.2 billion on the TARP
investment in GM from selling GM common stock at prices below the
Government’s cost basis, as well as from the write-off of its remaining investment
in Old GM in the amount of $826 million, according to Treasury.576 Additionally,
taxpayers lost $1.9 billion on the sale of Ally Financial’s common stock.577
Taxpayers also lost $2.9 billion on Treasury’s investment in Chrysler LLC, which
exited TARP in 2011. A fourth company, Chrysler Financial Services Americas LLC

For more information on GMAC/Ally
Financial, see “Taxpayers Continue to
Own 74% of GMAC (Rebranded as
Ally Financial Inc.) from the TARP
Bailouts,” in SIGTARP’s January 2013
Quarterly Report, pages 147-164.

295

296

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

(“Chrysler Financial”), repaid all its TARP money in 2009. AWCP and ASSP were
terminated in July 2009, and April 2010, respectively.
Treasury initially obligated approximately $84.8 billion in TARP funds through
the three auto assistance programs to GM, Ally Financial, Chrysler, and Chrysler
Financial.578 Ultimately, Treasury spent $79.7 billion in TARP funds on the auto
bailout after $2.1 billion in loan commitments to Chrysler were never drawn
down, and all available funding for the ASSP program was not used.579 As of
September 30, 2014, taxpayers were owed $17.8 billion, of which $16 billion in
losses have been realized or written off and will never be repaid, leaving $1.8 billion
outstanding.580
Treasury’s investments in AIFP and the two related programs and the
companies’ principal repayments are summarized in Table 4.53.
TABLE 4.53

TARP AUTOMOTIVE PROGRAM INVESTMENTS AND PRINCIPAL REPAYMENTS
AND RECOVERIES, AS OF 9/30/2014 ($ BILLIONS)
General
Motorsa

Ally
Financial
Inc.b

Chryslerc

Chrysler
Financial

Total

$49.5

$17.2

$10.5

$1.5

$78.6

38.3

13.4

7.6

1.5

60.8

Automotive Industry
Financing Program
Treasury Investment
Principal Repaid/
Recovered
Auto Supplier Support
Program
Treasury Investment

0.3

0.1

0.4

Principal Repaid/
Recovered

0.3

0.1

0.4

0.4

0.3

0.6

Auto Warranty
Commitment Program
Treasury Investment
Principal Repaid

0.4

0.3

0.6

Total Treasury Investment

$50.2

$17.2

$10.9

$1.5

$79.7

Total Principal Repaid/
Recovered

$38.9

$13.4

$8.0

$1.5

$61.9

Still Owed to Taxpayers

$11.2d

$3.7e

$2.9

$0.0

$17.8

($11.2d)

($1.9)

($2.9)

Realized Loss on
Investment

($16.0)

Notes: Numbers may not total due to rounding.
a
Principal repaid includes a series of debt payments totaling $160 million recovered from GM bankruptcy.
b
Investment includes an $884 million Treasury loan to GM, which GM invested in GMAC in January 2009.
c
Principal repaid includes $560 million Fiat paid in July 2011 for Treasury’s remaining equity stake in Chrysler and for Treasury’s
rights under an agreement with the UAW retirement trust related to Chrysler shares.
d
Realized loss on investment and amount still owed to taxpayers include the $826 million claim in GM’s bankruptcy, which Treasury
wrote off in the first quarter of 2014.
e
Amount still owed to taxpayers does not include subsequent recoveries from the second trading plan, which Treasury announced
concluded on October 17, 2014.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Daily TARP
Update, 10/1/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Automotive Industry Financing Program
AIFP, the largest of the three auto bailout programs, has not expended any
TARP funds for the automotive industry since December 30, 2009.581 Of AIFPrelated loan principal repayments and share sale proceeds, as of September
30, 2014, Treasury had received approximately $38.3 billion related to its GM
investment, $13.4 billion related to its Ally Financial/GMAC investment, $7.6
billion related to its Chrysler investment, and $1.5 billion related to its Chrysler
Financial investment.582 In addition to principal repayments, Treasury had received
approximately $5.6 billion in dividends and interest as of September 30, 2014.583

GM
Between September 26, 2013 and December 9, 2013, Treasury sold its remaining
101.3 million shares of GM common stock. As of September 30, 2014, taxpayers
had lost $11.2 billion on the investment in GM.584 Treasury provided approximately
$49.5 billion to GM through AIFP, the largest of the automotive rescue
programs.585 As a result of GM’s bankruptcy, Treasury’s investment was converted
to a 61% common equity stake in GM, $2.1 billion in preferred stock in GM, and
a $7.1 billion loan to GM ($6.7 billion through AIFP and $360.6 million through
AWCP).
Debt Repayments

As of September 30, 2014, GM had made approximately $756.7 million in
dividend and interest payments to Treasury under AIFP.586 GM repaid the $6.7
billion loan provided through AIFP with interest, using a portion of the escrow
account that had been funded with TARP funds. What remained in escrow was
released to GM with the final debt payment by GM.587
Sales of GM Stock

In November and December 2010, GM successfully completed an initial public
offering (“IPO”) in which GM’s shareholders sold 549.7 million shares of common
stock and 100 million shares of Series B mandatorily convertible preferred shares
(“MCP”) for total gross proceeds of $23.1 billion.588 As part of the IPO priced at
$33 per share, Treasury sold 412.3 million common shares for $13.5 billion in
net proceeds, reducing its number of common shares to 500.1 million and its
ownership in GM from 61% to 33%.589 On December 15, 2010, GM repurchased
Treasury’s Series A preferred stock (83.9 million shares) for total proceeds of
$2.1 billion and a capital gain to Treasury of approximately $41.9 million.590 In
early 2011, Treasury further diluted its ownership from 33% to 32% when GM
contributed 61 million of its common shares to fund GM’s pension plans.591
After that, Treasury continued to sell GM stock, both directly to GM and in
the public markets. On December 21, 2012, Treasury sold 200 million common
shares to GM at $27.50 per share, for total proceeds of $5.5 billion.592 On January
18, 2013, Treasury announced the first of four pre-arranged written trading plans
to divest its remaining shares.593 Under the first trading plan, which ended April

For more on the results of GM’s
November 2010 IPO, see SIGTARP’s
January 2011 Quarterly Report,
page 163.

297

298

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

17, 2013, Treasury sold 58.4 million shares at an average share price of $28.05 for
total proceeds of $1.6 billion.594 During Treasury’s second trading plan that ended
on September 13, 2013, it sold 110.3 million shares at an average share price
of $34.65, for total proceeds of $3.8 billion.595 In Treasury’s third trading plan,
ending on November 20, 2013, 70.2 million GM shares sold at an average share
price of $36.51, for proceeds of $2.6 billion.596 In the fourth and final trading plan,
between November 21, 2013, and December 9, 2013, Treasury sold its remaining
31.1 million GM shares for an average price of $38.82 per share, for proceeds of
$1.2 billion.597 In addition to the trading plans, on June 12, 2013, Treasury sold 30
million shares of common stock at $34.41 per share in a public equity offering that
raised $1 billion.598
As of September 30, 2014, taxpayers had realized losses from an accounting
standpoint of $10.3 billion on all GM common shares sold from November
2010 through December 9, 2013, according to Treasury.599 The losses are due to
Treasury’s sales of GM common shares at prices below its cost basis of $43.52
per share. In addition, Treasury’s write-off of an $826 million claim in GM’s
bankruptcy, brought the total loss to taxpayers to $11.2 billion.600

For a discussion of the history and
financial condition of Ally Financial,
see SIGTARP’s January 2013
Quarterly Report, pages 147-164.

Ally Financial, formerly known as GMAC
Ally Financial is still in TARP and as of September 30, 2014, taxpayers were
owed $3.7 billion for the TARP investment in it. In return for its investment, as
of September 30, 2014, Treasury held approximately 13.8% of Ally Financial’s
common stock.601 On January 23, 2014, Treasury sold 410,000 shares of Ally
Financial common stock for approximately $3 billion in a private placement, after
which its ownership stake was reduced from 63% to 37% of the company’s stock.
The stock sold at $7,375 per share.602 Following this, Treasury announced it would
sell 95 million shares of common stock for $2.4 billion in Ally’s IPO on April 10,
2014, further reducing taxpayers’ share to 82,311,010 shares, or 17%. Treasury’s
stake was further reduced to approximately 16% following the sale of 7,245,670
over-allotment shares of Ally common stock at the IPO price of $25.603 Treasury’s
share sales continued through its first trading plan, which concluded on September
12, 2014 with the sale of 8,890,000 shares, recovering approximately $218.7
million. This reduced Treasury’s stake to 13.8%.604 On October 17, 2014, Treasury
announced the conclusion of its second trading plan with the sale of 11,249,044
shares, recovering approximately $245.5 million. Treasury now holds approximately
54.9 million shares of common stock, or approximately 11.4 % of Ally Financial.605
For the Government to break even on its investment, Ally’s remaining shares would
need to trade at approximately $64 per share—triple the closing price per share of
Ally Financial on October 17, 2014.606
On November 20, 2013, Ally paid Treasury $5.2 billion to repurchase $5.938
billion par value of MCP, plus a payment of $725 million to terminate the share
adjustment right.607 As of September 30, 2014, Treasury has recovered $13.4
billion through stock sales and repayments of Ally Financial shares since providing
bailout assistance to the company five and a half years ago.608 The company
also had paid a total of $3.7 billion in quarterly dividends to Treasury through

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

September 30, 2014, as required by the terms of the preferred stock that Ally
Financial issued to Treasury.609
Ally Financial received $17.2 billion in three separate direct injections of TARP
funds, plus a TARP-funded capital injection from GM. On December 29, 2008,
Treasury purchased $5 billion in senior preferred equity from GMAC and received
an additional $250 million in preferred shares through warrants that Treasury
exercised immediately at a cost of $2,500.610 In January 2009, Treasury loaned
GM $884 million to invest in GMAC.611 In May 2009, Treasury exchanged this
$884 million debt for a 35% common equity ownership in GMAC.612 On May 21,
2009, Treasury made an additional investment in GMAC when it purchased $7.5
billion of MCP and received warrants that Treasury immediately exercised for an
additional $375 million in MCP at an additional cost of approximately $75,000.613
On December 30, 2009, Treasury invested another $3.8 billion in GMAC, and
Treasury received $2.5 billion in trust preferred securities (“TRUPS”) and $1.3
billion in MCP. Treasury also received warrants, which were immediately exercised,
to purchase an additional $127 million in TRUPS and $62.5 million in MCP at an
additional cost of approximately $1,270 and $12,500, respectively.614 Additionally,
Treasury converted $3 billion of its MCP into GMAC common stock, increasing
its common equity ownership from 35% to 56%.615 On May 10, 2010, GMAC
changed its name to Ally Financial Inc.616
On December 30, 2010, Treasury announced the conversion of $5.5 billion
of its MCP in Ally Financial to common equity, increasing Treasury’s ownership
stake in Ally Financial’s common equity from 56% to 74%.617 On March 7, 2011,
Treasury sold its $2.7 billion in TRUPS in Ally Financial in a public offering,
resulting in $2.5 billion in proceeds to Treasury.618
Following the conversion, the private equity firm Cerberus Capital
Management, L.P. (“Cerberus”) held 8.7%, third-party investors collectively held
7.6%, an independently managed trust owned by GM held 5.9%, and GM directly
held a 4% stake in Ally Financial’s common equity.619 Later, GM’s interests were
consolidated in the trust and on December 12, 2013, GM sold its stake for $0.9
billion.620 As of June 6, 2014, Treasury held a 15.6% stake in Ally’s common stock,
and Third Point Loan LLC and Cerberus held 9.5% and 8.7%, respectively.621 As of
September 30, 2014, Treasury held a 13.8% stake in Ally’s common stock.622
Ally Financial Sells Some Stock in Private Placement; Repurchases Preferred
Shares from Treasury

On November 20, 2013, Ally Financial closed two transactions that reduced
Treasury’s stake in the company from 74% to 63%.623 In one transaction, Ally
Financial completed a private placement of 216,667 shares of its common stock for
an aggregate purchase price of $1.3 billion. In the other transaction, Ally Financial
repurchased from Treasury all of its MCP and also terminated Treasury’s existing
share adjustment right associated with those shares.624 Ally said it paid Treasury
$5.2 billion to repurchase $5.938 billion par value of MCP, plus a payment of $725
million to terminate the share adjustment right.625

299

300

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

According to Treasury, under new agreements associated with these
transactions, Treasury had the right to designate a majority of the Ally Financial
Board of Directors as long as its ownership stake exceeded 50%, which it no longer
does.626 As of June 30, 2014, Treasury had designated six of the 11 directors,
however, two Treasury-appointed directors, Brian MacDonald and Henry S. Miller
retired from the Board at the time of its annual meeting on July 17, 2014.627 Also
at the Annual Meeting, Ally Financial’s Board nominated three former Treasury
designated board members to remain as directors: Robert T. Blakely, Gerald
Greenwald, and Marjorie Magner. Treasury designated an additional nominee,
former board member Mathew Pendo, for election at the 2014 annual meeting.628
On December 23, 2013, Ally Financial announced that the Federal Reserve
had granted the company financial holding company status, permitting it to engage
in a broader range of business activities, while continuing to operate its insurance
and remarketing businesses.629 In addition, on March 24, 2014 the Federal Reserve
announced that Ally Financial had passed its CCAR “stress test.”630
Ally Financial IPO

On April 9, 2014, Treasury announced an IPO of Ally Financial common stock,
reporting that it would sell 95 million shares of Ally stock with an option for the
purchase of an additional 14.3 million of Treasury’s shares.631 Treasury reported
that the shares would be offered at $25 per share for $2.375 billion in proceeds. In
addition, Treasury granted a 30-day option to purchase the additional shares, which
traded on the New York stock exchange.632
Ally had announced its IPO plans as early as March 31, 2011, by filing a
Form S-1 Registration statement for an IPO with the Securities and Exchange
Commission (“SEC”).633 The document includes a prospectus relating to the
issuance of Ally Financial common stock.634 The prospectus also outlines certain
aspects of Ally Financial’s business operations and risks facing the company.635
Ally Financial disclosed additional details about its IPO in several amended
Form S-1 Registration statements filed over time with the SEC, the most recent on
March 27, 2014.636
Ally Financial Released from Mortgage Claims of Bankrupt Subsidiary

On May 14, 2012, Ally Financial announced that its mortgage subsidiary,
Residential Capital, LLC (“ResCap”) filed for bankruptcy court relief under
Chapter 11 of the U.S. Bankruptcy Code, and that it was exploring strategic
alternatives for its international operations.637 As a result of the Chapter 11 filing,
Ally Financial said that it deconsolidated ResCap from its financial statements
and wrote down its equity interest in ResCap to zero.638 On June 26, 2013, the
U.S. Bankruptcy Court approved Ally Financial’s proposed settlement to pay
$2.1 billion to the ResCap estate for release from certain mortgage claims and
liabilities.639 As part of the settlement, ResCap on June 13, 2013, fully repaid Ally
Financial’s secured claim for $1.13 billion owed under existing credit facilities.640
Ally Financial recorded a charge of about $1.6 billion in the second quarter of
2013 related to the settlement, and said it would make its settlement payment

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

to the ResCap estate when the reorganization plan became effective.641 The U.S.
Bankruptcy Court approved the ResCap reorganization plan on December 11,
2013, marking the court’s formal approval of broad releases for all mortgage-related
claims against Ally Financial. The plan became effective December 17, 2013.642
Ally Financial Agrees to Sell International, Other Assets

On November 21, 2012, Ally Financial announced it had reached agreements
to sell its remaining international assets over time for $9.2 billion in proceeds.
According to Ally Financial, that included the sale of most of its operations in
Europe and Latin America to GM Financial Company, Inc. (“GM Financial”), and
a 40% stake in a joint venture in China. From this, Ally Financial received $2.6
billion in total proceeds.643 In June, 2013, Ally Financial said it completed the sale
of its business in France, and on October 1, 2013, it said it completed the sale
of its Brazil operations to GM Financial for $611 million.644 Ally Financial also
has said it expects the sale of a joint venture stake in China to close in 2014.645
In addition, it sold its Canadian auto finance operation to Royal Bank of Canada
for $4.1 billion and its Mexican insurance business to ACE Group for $865
million, in sales completed on February 1, 2013, and May 2, 2013, respectively.646
Additionally, Ally Financial’s subsidiary, Ally Bank, announced in March 2013 that
it agreed to sell its entire agency mortgage servicing rights to Ocwen Financial
and Quicken Loans.647 Both sales were completed on April 17, 2013, according to
Ally Bank, which said it received a combined $850 million in proceeds from the
transactions.648 Table 4.54 summarizes Ally Financial’s international and domestic
asset sales.
TABLE 4.54

ALLY FINANCIAL - 2013 ASSET SALES

($ MILLIONS)

Sale Proceeds

Buyer

Sale Closed

$4,100

Royal Bank of
Canada

2/1/13

N/A

Walter
Investment
Management

2/28/13

$2,600

GM Financial

4/2/13a

Ally Bank
mortgage
servicing

$850

Ocwen
Financial,
Quicken Loans

4/17/13

ABA Seguros
Insurance

$865

ACE Group

5/2/13

Brazilian
operations

$611

GM Financial

10/1/13

Ally Credit Canada,
ResMor Trust
Ally Bank
wholesale
mortgage unit
Units in Latin
America, Europe,
China

Total Proceeds:

$9,026

Notes: Numbers may not total due to rounding.
a
The closing on 4/2/2013 did not include China assets, which are expected to close in 2014.
Sources: Ally Financial SEC filings, press releases.

301

302

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Chrysler
Taxpayers suffered a $2.9 billion loss on the TARP investment in Chrysler. Through
October 3, 2010, Treasury made approximately $12.5 billion available to Chrysler:
$4 billion before bankruptcy to CGI Holding LLC, parent of Chrysler and Chrysler
Financial; $1.9 billion in financing to Chrysler during bankruptcy; and $6.6 billion
to Chrysler afterwards, in exchange for 10% of Chrysler common equity.649
In 2010, following the bankruptcy court’s approval of Chrysler’s liquidation
plan, the $1.9 billion loan was extinguished without repayment.650 As of September
30, 2014, Treasury had recovered approximately $57.4 million from asset sales
during bankruptcy.651 Of the $4 billion lent to Chrysler’s parent company, CGI
Holding LLC, $500 million of the debt was assumed by Chrysler while the
remaining $3.5 billion was held by CGI Holding LLC.652 Treasury later accepted
$1.9 billion in full satisfaction of the $3.5 billion loan.653
In spring 2011, Chrysler used the proceeds from a series of refinancing
transactions and an equity call option exercised by Fiat North America LLC (“Fiat”)
to repay the loans from Treasury.654
In mid-2011, Treasury sold to Fiat for $500 million Treasury’s remaining equity
ownership interest in Chrysler. Treasury also sold to Fiat for $60 million Treasury’s
rights to receive proceeds under an agreement with the United Auto Workers
(“UAW”) retiree trust pertaining to the trust’s shares in Chrysler.655
As of July 21, 2011, the Chrysler entities had made approximately $1.2 billion
in interest payments to Treasury under AIFP.656
Chrysler Financial
Chrysler Financial fully repaid the TARP investment, which included a Treasury
loan of $1.5 billion to support Chrysler Financial’s retail lending in January
2009. On July 14, 2009, Chrysler Financial fully repaid the loan in addition to
approximately $7.4 million in interest payments.657 Additionally, on May 14, 2010,
Treasury accepted $1.9 billion in full satisfaction of a $3.5 billion loan to CGI
Holding LLC, relinquishing any claim on Chrysler Financial.658 On December
21, 2010, TD Bank Group agreed to purchase Chrysler Financial from Cerberus,
the owner of CGI Holding LLC, for approximately $6.3 billion completing its
acquisition on April 1, 2011.659

Auto Supplier Support Program (“ASSP”) and Auto Warranty
Commitment Program (“AWCP”)
On March 19, 2009, Treasury committed $5 billion to ASSP to “help stabilize the
automotive supply base and restore credit flows,” with loans to GM ($290 million)
and Chrysler ($123.1 million) fully repaid in April 2010.660
AWCP guaranteed Chrysler and GM vehicle warranties during the companies’
bankruptcy, with Treasury obligating $640.8 million — $360.6 million for GM and
$280.1 million for Chrysler, both fully repaid to Treasury.661

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

ASSET SUPPORT PROGRAMS

Three TARP programs have focused on supporting markets for specific asset
classes: the Term Asset-Backed Securities Loan Facility (“TALF”), the PublicPrivate Investment Program (“PPIP”), and the Unlocking Credit for Small
Businesses (“UCSB”) program.
TALF was designed to support asset-backed securities (“ABS”) transactions
by providing eligible borrowers $71.1 billion in non-recourse loans through the
Federal Reserve Bank of New York (“FRBNY”) to purchase non-mortgage-backed
ABS and commercial mortgage-backed securities (“CMBS”).662 Treasury initially
obligated $4.3 billion in TARP funds to purchase and manage loan collateral from
any TALF loans that defaulted.663 As of February 6, 2013, all TARP funding for
TALF was either deobligated or recovered.664 Of the $71.1 billion in TALF loans,
none have defaulted and $14.3 million remained outstanding as of September 30,
2014.665
PPIP used nine Public-Private Investment Fund (“PPIF”) managers and a
combination of TARP and private equity funding to help financial institutions
trade in their legacy mortgage-backed securities (“MBS”). One PPIP manager,
The TCW Group, Inc. (“TCW”), withdrew soon after the program began. A total
of $18.6 billion in TARP funding was drawn down and fully repaid by PPIP
fund managers.666 As of September 30, 2014, the entire PPIP portfolio had been
liquidated, and seven PPIP funds were legally dissolved while the last remaining
fund was winding down operations.667
Through the UCSB loan support initiative, Treasury purchased $368.1 million
in 31 SBA 7(a) securities, which are securitized small-business loans.668 According
to Treasury, on January 24, 2012, Treasury sold its remaining securities and ended
the program with a total investment gain of about $9 million for all the securities,
including sale proceeds and payments of principal, interest, and debt.669

TALF
TALF, which was announced in November 2008, issued $71.1 billion in loans
collateralized by eligible ABS.670 According to FRBNY, TALF was “designed to
increase credit availability and support economic activity by facilitating renewed
issuance of consumer and business ABS.”671 TALF is divided into two parts:672
• a lending program, TALF, in which FRBNY originated and managed 3-5 year
non-recourse loans to eligible borrowers using eligible ABS and CMBS as
collateral. TALF’s lending program closed in 2010.
• an asset disposition facility, TALF LLC, to which Treasury provided $100
million in TARP funds (all of which was subsequently recovered) to purchase
collateral from FRBNY if borrowers chose to surrender it and walk away from
their loans or if the collateral is seized in the event of default.
The asset disposition facility, TALF LLC, is managed by FRBNY and remains in
operation until final TALF loans mature on October 29, 2014.673 TALF loans are

Non-Recourse Loan: Secured loan
in which the borrower is relieved of
the obligation to repay the loan upon
surrendering the collateral.
Collateral: Asset pledged by a
borrower to a lender until a loan is
repaid. Generally, if the borrower
defaults on the loan, the lender gains
ownership of the pledged asset and
may sell it to satisfy the debt. In TALF,
the ABS or CMBS purchased with
the TALF loan is the collateral that is
posted with FRBNY.

303

304

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

For a discussion of the credit rating
agency industry and an analysis of
the impact of nationally recognized
statistical rating organizations on TARP
and the overall financial market, see
SIGTARP’s October 2009 Quarterly
Report, pages 113–148.

Haircut: Difference between the value
of the collateral and the value of the
loan (the loan value is less than the
collateral value).
“Skin in the Game”: Equity stake in an
investment; down payment; the amount
an investor can lose.

non-recourse (unless the borrower has made any misrepresentations or breaches
warranties or covenants), which means that FRBNY cannot hold the borrower
liable for any losses beyond the surrender of collateral for the TALF loan.674
As of September 30, 2014, $14.3 million in TALF loans was outstanding.675
According to FRBNY, no TALF borrowers have surrendered collateral in lieu of
repayment and consequently no collateral has been purchased by TALF LLC since
its inception.676

Lending Program
TALF provided a total of $71.1 billion in loans through FRBNY. FRBNY lent
each borrower the amount of the market price of the pledged collateral minus the
haircut, subject to certain limitations.677 A haircut, which represents the amount of
money put up by the borrower (the borrower’s “skin in the game”), was required for
each TALF loan.678
TALF provided $59 billion of loans to purchase non-mortgage-backed ABS.
As of September 30, 2014, there were no ABS outstanding.679 Table 4.55 lists all
TALF loans collateralized by non-mortgage-backed ABS loans, by ABS sector.
TABLE 4.55

TALF LOANS BACKED BY ABS (NON-MORTGAGE-BACKED COLLATERAL)
($ BILLIONS)

ABS Sector
Auto Loans
Credit Card Receivables

$12.8
26.3

Equipment Loans

1.6

Floor Plan Loans

3.9

Premium Finance

2.0

Servicing Advance Receivables

1.3

Small-Business Loans

2.2

Student Loans

8.9

Total ABS

$59.0

Notes: Numbers may not total due to rounding. Data as of 9/30/2014.
Sources: FRBNY, “Term Asset-Backed Securities Loan Facility: non-CMBS,” no date, www.newyorkfed.org/markets/talf_operations.
html, accessed 10/1/2014; FRBNY, “Term Asset-Backed Securities Loan Facility: non-CMBS,” no date, www.newyorkfed.org/
markets/TALF_recent_operations.html, accessed 10/1/2014.

TALF also provided $12.1 billion of loans to purchase CMBS. Approximately
99% of which ($12 billion) was used to purchase legacy CMBS, the remaining 1%
($100 million) was used to purchase newly issued CMBS.680 As of September 30,
2014, $14.3 million was outstanding.681
As of September 30, 2014, $71.1 billion in TALF loans had been repaid.
According to FRBNY, the outstanding collateral on the remaining $14.3 million in
TALF loans was performing as expected.682

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Asset Disposition Facility
Through September 30, 2014, Treasury has received a total of $13 million in
interest from the Asset Disposition Facility.683 During the remaining two years of
the program, any interest, fees, and gains collected above the remaining principal
on outstanding TALF loans will be shared by Treasury (90%) and FRBNY (10%).684
As of September 30, 2014, Treasury had received $631.9 million in additional
gains and FRBNY had received $70.2 million.685

For detailed descriptions of the TALF
Lending Program and TALF Asset
Disposition Facility, see SIGTARP’s July
2014 Quarterly Report, pages 258–261.

305

306

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Legacy Securities: Real estate-related
securities originally issued before
2009 that remained on the balance
sheets of financial institutions because
of pricing difficulties that resulted from
market disruption.
Equity: Investment that represents an
ownership interest in a business.
Debt: Investment in a business that
is required to be paid back to the
investor, usually with interest.

For more information on the selection of
PPIP managers, see SIGTARP’s October
7, 2010, audit report entitled “Selecting
Fund Managers for the Legacy
Securities Public-Private Investment
Program.”
For more information on the withdrawal
of TCW as a PPIP manager, see
SIGTARP’s January 2010 Quarterly
Report, page 88.

Pro Rata: Refers to dividing something
among a group of participants according
to the proportionate share that each
participant holds as a part of the whole.

Public-Private Investment Program
According to Treasury, the purpose of the Public-Private Investment Program
(“PPIP”) was to purchase legacy securities from banks, insurance companies,
mutual funds, pension funds, and other eligible financial institutions as defined
in EESA, through Public-Private Investment Funds (“PPIFs”).686 PPIFs were
partnerships, formed specifically for this program, that invested in mortgage-backed
securities using equity capital from private-sector investors combined with TARP
equity and debt. A private-sector fund management firm oversaw each PPIF on
behalf of investors. According to Treasury, the aim of PPIP was to “restart the
market for legacy securities, allowing banks and other financial institutions to free
up capital and stimulate the extension of new credit.”687
Treasury selected nine fund management firms to establish PPIFs. One PPIP
manager, TCW, subsequently withdrew. As of September 30, 2014, the entire
PPIP portfolio had been liquidated, and seven PPIP funds were legally dissolved
while the other one was winding down operations. Private investors and Treasury
co-invested in the PPIFs to purchase legacy securities from financial institutions.
The fund managers raised private-sector capital. Treasury matched the privatesector equity dollar-for-dollar and provided debt financing in the amount of the
total combined equity. Each PPIP manager was also required to invest at least $20
million of its own money in the PPIF.688 Each PPIF was approximately 75% TARP
funded.
Under the program, Treasury, the PPIP managers, and the private investors
shared PPIF profits and losses on a pro rata basis based on their limited partnership
interests. Treasury also received warrants in each PPIF that gave Treasury the
right to receive an extra portion of the fund’s final profits that would otherwise be
distributed to the private investors.689
The PPIP portfolio consisted of eligible securities and cash assets. The
securities eligible for purchase by PPIFs (“eligible assets”) were non-agency
residential mortgage-backed securities (“non-agency RMBS”) and commercial
mortgage-backed securities (“CMBS”) that also met the following criteria: issued
before January 1, 2009 (legacy); rated when issued AAA or equivalent by two or
more credit rating agencies designated as nationally recognized statistical rating
organizations (“NRSROs”); secured directly by actual mortgages, leases, or other
assets, not other securities (other than certain swap positions, as determined by
Treasury); and located primarily in the United States (the loans and other assets
Limited Partnership: Partnership in which
there is at least one partner whose
liability is limited to the amount invested
(limited partner) and at least one partner
whose liability extends beyond monetary
investment (general partner).

Non-Agency Residential MortgageBacked Securities (“non-agency RMBS”):
Financial instrument backed by a group
of residential real estate mortgages (i.e.,
home mortgages for residences with up
to four dwelling units) not guaranteed
or owned by a Government-sponsored
enterprise (“GSE”), or a Government
agency.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

that secure the non-agency RMBS and CMBS); and purchased from financial
institutions eligible for TARP participation.690

PPIP Process
Funds chosen to participate in PPIP raised private capital, which Treasury
matched on a three to one basis (one part equity and two parts debt) up to a
preset maximum set by Treasury. To obtain obligated funds, PPIP managers sent a
notice to Treasury and the private investors requesting a “draw down” of portions
of obligated contributions in order to purchase specific investments or to pay
certain expenses and debts of the partnerships.691 After obtaining the funds, PPIP
managers were required to provide monthly portfolio reports to Treasury and other
investors.692
PPIF Purchasing Power

During the capital-raising period, the eight PPIP fund managers raised $7.4 billion
of private-sector equity capital, which Treasury matched with a dollar-for-dollar
obligation, for a total of $14.7 billion in equity capital. Treasury also obligated
$14.7 billion of debt financing, resulting in $29.4 billion of PPIF purchasing
power. PPIF fund-raising was completed in December 2009. After the capitalraising stage, Treasury obligated a total of $22.4 billion in a combination of
matching equity funds and debt financing for PPIP, which included funds for
TCW, which subsequently withdrew from the program. Table 4.56 shows equity
and debt committed by Treasury for the eight PPIFs that actively participated in
the program.

307

308

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 4.56

PUBLIC-PRIVATE INVESTMENT PROGRAM COMMITTED PURCHASING POWER

Manager
AG GECC PPIF Master Fund, L.P.

($ BILLIONS)

Private-Sector
Equity

Treasury
Equity

Treasury
Debt

Total
Purchasing
Powera

Purchasing
Power Used

$1.2

$1.2

$2.5

$5.0

90%

AllianceBernstein Legacy
Securities Master Fund, L.P.

1.2

1.2

2.3

4.6

92%

BlackRock PPIF, L.P.

0.7

0.7

1.4

2.8

76%

Invesco Legacy Securities Master
Fund, L.P.

0.9

0.9

1.7

3.4

68%

Marathon Legacy Securities
Public-Private Investment
Partnership, L.P.

0.5

0.5

0.9

1.9

100%

Oaktree PPIP Fund, L.P.

1.2

1.2

2.3

4.6

48%

RLJ Western Asset Public/Private
Master Fund, L.P.

0.6

0.6

1.2

2.5

100%

Wellington Management Legacy
Securities PPIF Master Fund, LP

1.1

1.1

2.3

4.6

100%

$7.4

$7.4

$14.7

$29.4

83%

Totals for Fundsb

Notes: Numbers may not total due to rounding. All PPIP fund managers have liquidated their portfolios. One fund was winding down operations and had not
been legally dissolved as of September 30, 2014: AG GECC.
a
Table shows the total amount of purchasing power committed and available to each PPIF during its investment period.
b
TCW raised $156 million in private-sector equity capital, which was matched by Treasury. Treasury also provided $200 million of debt. TCW repaid the
total amount committed by Treasury in early 2010. This is not included in the total purchasing power.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, Transactions Report, 3/31/2011; Treasury, response to SIGTARP data call, 10/6/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

The program gave each PPIP manager up to three years (the “PPIF investment
period”) from closing its first private-sector equity contribution to draw upon the
TARP funds obligated for the PPIF and buy legacy securities on behalf of private
and Government investors.693 During that investment period, the program sought
to maintain “predominantly a long-term buy and hold strategy.”694 The investment
periods for all PPIFs expired in 2012.695
Subsequently, fund managers had up to five years ending in 2017 to manage
and sell off the fund’s investment portfolio and return proceeds to taxpayers and
investors, with the ability to extend that period under certain circumstances.696
However, by June 30, 2013, all PPIP managers had liquidated their portfolios.
Amounts Drawn Down

The eight PPIP managers drew down a total of approximately $24.4 billion to buy
legacy securities during their investment periods, spending $6.1 billion in privatesector equity capital and $18.3 billion in TARP equity and debt funding.697 The
last fund’s investment period ended in December 2012.698 Treasury also disbursed
$356.3 million to TCW, which TCW fully repaid in early 2010 when it withdrew
from the program.699
As a group, the funds drew down and spent about 83% of the total money
available to them to invest in legacy real estate-backed securities.700 All unused
TARP debt financing has been deobligated by Treasury.701 Unused TARP equity
financing is deobligated when each fund is legally dissolved.

PPIP Fund Repayments and Liquidations
Throughout the program, PPIP managers were required to make TARP payments
to Treasury for debt principal, debt interest, and equity capital. Under the program,
the PPIP funds also shared profits from the investments with Treasury. All PPIFs
have fully repaid their TARP debt and equity financing.702 The nine PPIFs together
had repaid $12.4 billion in TARP debt and $6.3 billion in TARP equity, including
payments by TCW, as of September 30, 2014.
The PPIP managers wound down their portfolios as follows:
• In June 2013, Oaktree liquidated its remaining PPIP investments.703 According
to Treasury, Oaktree fully repaid Treasury’s equity investment of $555.9 million
and Treasury debt of $1.1 billion, with interest. On December 31, 2013,
Oaktree filed a formal certificate with the state of Delaware declaring that its
PPIF had been dissolved.704
• In June 2013, Marathon liquidated its remaining PPIP investments.705
According to Treasury, Marathon fully repaid Treasury’s equity investment of
$474.6 million and Treasury debt of $949 million, with interest. On June 10,
2014, Marathon filed a formal certificate with the state of Delaware declaring
that its PPIF had been dissolved.706
• In May 2013, AG GECC liquidated its remaining PPIP investments.707
According to Treasury, AG GECC fully repaid Treasury’s equity investment of
$1.1 billion and Treasury debt of $2.2 billion, with interest. As of September

309

310

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

•

•

•

•

•

30, 2014, AG GECC’s PPIF had approximately $0 in cash to pay for wind-down
expenses.708
In February 2013, Wellington liquidated its remaining PPIP investments.709
According to Treasury, Wellington fully repaid Treasury’s equity investment of
$1.1 billion and Treasury debt of $2.3 billion, with interest. On July 25, 2013,
Wellington filed a formal certificate with the state of Delaware declaring that its
PPIF had been dissolved.710
In November 2012, BlackRock liquidated its remaining PPIP investments.711
According to Treasury, BlackRock fully repaid Treasury’s equity investment of
$528.2 million and Treasury debt of $1.1 billion, with interest.712 On December
20, 2013, BlackRock filed a formal certificate with the state of Delaware
declaring that its PPIF had been dissolved.713
In September 2012, AllianceBernstein liquidated its remaining PPIP
investments.714 According to Treasury, AllianceBernstein fully repaid Treasury’s
equity investment of $1.1 billion and its Treasury debt of $2.1 billion, with
interest.715 On August 23, 2013, AllianceBernstein filed a formal certificate with
the state of Delaware declaring that its PPIF had been dissolved.716
In October 2012, RLJ Western liquidated its remaining PPIP investments.717
According to Treasury, RLJ Western fully repaid Treasury’s equity investment of
$620.6 million and Treasury debt of $1.2 billion, with interest.718 On December
31, 2012, RLJ Western filed a formal certificate with the state of Delaware
declaring that its PPIF had been dissolved.719
Invesco was the first of the PPIP funds to sell its portfolio, liquidating it in
March 2012.720 According to Treasury, Invesco fully repaid Treasury’s equity
investment of $581 million and Treasury debt of $1.2 billion, with interest.721
On October 3, 2012, Invesco filed a formal certificate with the state of
Delaware declaring that its PPIF had been dissolved.722

In addition to repaying Treasury’s $18.6 billion capital investments, PPIP
managers paid a total of $3.5 billion in gross income payments and capital gains
to the Government through September 30, 2014, as well as $87 million in
warrant proceeds.723 Table 4.57 shows each fund’s payments to Treasury through
September 30, 2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 4.57

PPIP MANAGERS’ PAYMENTS TO TREASURY, AS OF 9/30/2014

($ MILLIONS)

Debt
Principal
Payments

Debt
Interest
Payments

Equity
Capital
Paymentsa

Gross
Income
Payments
and Capital
Gains

$2,235

$66

$1,117

$778

$19

AllianceBernstein Legacy Securities
Master Fund, L.P.

2,128

58

1,064

481

12

BlackRock PPIF, L.P.

1,053

34

528

395

10

Invesco Legacy Securities Master Fund,
L.P.

1,162

18

581

139

3

949

28

475

364

9

Oaktree PPIP Fund, L.P.

1,111

17

556

232

6

RLJ Western Asset Public/Private Master
Fund, L.P.

1,241

37

621

421

11

200

0.3

156

20

0.5

2,299

61

1,149

651

16

$12,378

$320

$6,247

$3,481

$87

Manager
AG GECC PPIF Master Fund, L.P.

Marathon Legacy Securities Public-Private
Investment Partnership, L.P.

UST/TCW Senior Mortgage Securities
Fund, L.P.
Wellington Management Legacy Securities
PPIF Master Fund, LP
Totals for All Funds

Equity
Warrant
Paymentsb

Notes: Numbers may not total due to rounding. All PPIP fund managers have liquidated their portfolios. One fund was winding down operations and had not
been legally dissolved as of September 30, 2014: AG GECC.
a
In April 2012, Treasury reclassified about $1 billion in combined payments from five PPIFs as equity capital payments instead of equity distributions.
b
Treasury received equity warrants from the PPIFs, which give Treasury the right to receive a percentage of any profits that would otherwise be distributed to
the private partners in excess of their contributed capital.
Sources: Treasury, Transactions Report, 9/30/2014; Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Dividends and Interest Report,
10/10/2014.

311

312

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

For information on the securities
purchased by PPIFs, see SIGTARP’s
April 2014 Quarterly Report, pages
237-244.

Securities Purchased by PPIFs
According to their agreements with Treasury, PPIP managers invested in both
RMBS and CMBS, except for Oaktree, which invested only in CMBS.724 Figure
4.42 shows the collective value of securities held by all PPIFs at the end of each
calendar quarter from the beginning of the funds’ investment period, until all
securities were sold in the quarter ended June 30, 2013, broken down by RMBS
and CMBS.
FIGURE 4.42

INVESTMENTS BY PPIP FUNDS, 2009–2013 ($ BILLIONS)
25

20

15

10

5

0
Q409 Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Commercial Mortgage-Backed Securities Investments
Residential Mortgage-Backed Securities Investments
Notes: Numbers may not total due to rounding.
Sources: Treasury, PPIP Quarterly Reports, December 2009, March 2010, June 2010, September 2010, December 2010,
March 2011, June 2011, September 2011, December 2011, March 2012, June 2012, September 2012, December 2012,
March 2013, and June 2013.

PPIF investments were classified by underlying asset type. All non-agency
RMBS investments were considered residential because the underlying assets were
mortgages for residences with up to four dwelling units. For CMBS, the assets were
commercial real estate mortgages: office, retail, multi-family, hotel, industrial (such
as warehouses), mobile home parks, mixed-use (combination of commercial and/
or residential uses), and self-storage. Over the course of the program, the portfolio
held large concentrations of office and retail. Figure 4.43 breaks down CMBS
investment distribution by sector from December 31, 2009, through June 30,
2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.43

AGGREGATE CMBS SECTOR HOLDINGS BY MARKET VALUE, 2009–2013 ($ BILLIONS)
6
5
4
3
2
1
0
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Office
Retail

Multifamily
Industrial

Lodging/Hotel
Other

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

Non-agency RMBS and CMBS were classified by the degree of estimated
default risk (sometimes referred to as “quality”). In general, the highest-quality
rankings went to mortgages with the strictest requirements regarding borrower
credit, completeness of documentation, and underwriting standards. Treasury
characterized the investment-quality levels of risk for the types of mortgage loans
that support non-agency RMBS as follows:725
• Prime — mortgage loan made to a borrower with good credit that generally met
the lender’s strictest underwriting criteria.
• Alt-A — mortgage loan made to a borrower with good credit but with limited
documentation or other characteristics that do not meet the standards for prime
loans.
• Subprime — mortgage loan made to a borrower with a poor credit rating.
• Option Adjustable Rate Mortgage (“Option ARM”) — mortgage loan that
gave the borrower choices about how much interest and principal to pay each
month, which could result in an increasing loan principal balance over time.
• Other (RMBS) — RMBS that did not meet the definitions for prime, Alt-A,
subprime, or option ARM but met the definition of “eligible assets” above.
Treasury characterized CMBS according to the bond’s degree of “credit
enhancement,” i.e., the percentage of the underlying mortgage pool by balance that
must be written down before the bond had any losses.726

313

314

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

• Super Senior — most senior originally rated AAA bonds in a CMBS
securitization with the highest level of credit enhancement.
• AM (Mezzanine) — mezzanine-level originally rated AAA bond. Creditors
receive interest and principal payments after super senior creditors but before
junior creditors.727
• AJ (Junior) — the most junior bond in a CMBS securitization with a AAA rating
at issuance.
• Other (CMBS) — CMBS that did not meet the definitions for super senior,
AM, or AJ but met the definition of “eligible assets” above.
Figure 4.44 and Figure 4.45 show the distribution of non-agency RMBS and
CMBS investments held in PPIP by respective risk levels from December 31,
2009, through June 30, 2013, by market value, as reported by PPIP managers.
FIGURE 4.44

AGGREGATE RMBS QUALITY BY MARKET VALUE, 2009–2013 ($ BILLIONS)
20
18
16
14
12
10
8
6
4
2
0
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Prime
Alt-A

Subprime
Option Arm

Other – RMBS

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.45

AGGREGATE CMBS QUALITY BY MARKET VALUE, 2009–2013 ($ BILLIONS)
6
5

4
3
2
1
0
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Super Senior

AM

AJ

Other – CMBS

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

Figures 4.46 and 4.47 show the distribution of non-agency RMBS and CMBS
investments held in PPIP by respective risk levels from December 31, 2009,
through June 30, 2013, as a percentage of market value, as reported by PPIP
managers.

315

316

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.46

AGGREGATE RMBS QUALITY AS A PERCENTAGE OF MARKET VALUE, 2009–2013
100%

80%

60%

40%

20%

0%
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Prime
Alt-A

Subprime
Option Arm

Other – RMBS

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

FIGURE 4.47

AGGREGATE CMBS QUALITY AS A PERCENTAGE OF MARKET VALUE, 2009–2013
100%

80%

60%

40%

20%

0%
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Super Senior
AM

AJ
Other – CMBS

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Non-agency RMBS and CMBS can be classified geographically, according to
the states where the underlying mortgages are held. Figures 4.48 and 4.49 show
the states with the greatest representation in the underlying non-agency RMBS and
CMBS investments in PPIFs, as reported by PPIP managers from December 31,
2009, through June 30, 2013.
FIGURE 4.48

AGGREGATE RMBS GEOGRAPHIC DISTRIBUTION BY MARKET VALUE, 2009–2013
($ BILLIONS)
20
18
16
14
12
10
8
6
4
2
0
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

California
Florida

New York
Virginia/New Jersey

Other

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers. Virginia
ranked fourth from Q4 2009 – Q2 2012 and was replaced by New Jersey from Q3 2012 forward.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

317

318

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

FIGURE 4.49

AGGREGATE CMBS GEOGRAPHIC DISTRIBUTION BY MARKET VALUE, 2009–2013
($ BILLIONS)
6
5
4
3
2
1
0
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

California
New York

Texas
Florida

Other

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

Non-agency RMBS and CMBS can be classified by the delinquency of the
underlying mortgages. Figures 4.50 and 4.51 show the distribution of non-agency
RMBS and CMBS investments held in PPIP by delinquency levels, as reported by
PPIP managers from December 31, 2009, through June 30, 2013.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

FIGURE 4.50

AGGREGATE AVERAGE RMBS DELINQUENCIES BY MARKET VALUE, 2009–2013
($ BILLIONS)
20
18
16
14
12
10
8
6
4
2
0
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Current

30-59 Days

60+ Days

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

FIGURE 4.51

AGGREGATE AVERAGE CMBS DELINQUENCIES BY MARKET VALUE, 2009–2013
($ BILLIONS)
6
5
4
3
2
1
0
Q409* Q110 Q210 Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212 Q312 Q412 Q113 Q213

Current

30-59 Days

60+ Days

Notes: Numbers may not total due to rounding. Calculated based on monthly data supplied by the PPIF managers.
* Certain data for this period were incomplete. In the cases where data were incomplete, SIGTARP made estimates based on
the best information available. Estimates do not have a material effect on the presentations in this report.
Sources: SIGTARP Quarterly Reports, January 2010 through July 2013, PPIF Monthly Performance Reports.

319

320

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

7(a) Loan Program: SBA loan program
guaranteeing a percentage of loans for
small businesses that cannot otherwise
obtain conventional loans at reasonable
terms.
Pool Assemblers: Firms authorized
to create and market pools of SBAguaranteed loans.
SBA Pool Certificates: Ownership
interest in a bond backed by SBAguaranteed loans.

For more information on SBA 7(a)
Loan Program mechanics and
TARP support for the program, see
SIGTARP’s April 2010 Quarterly
Report, pages 105-106.
For a full listing of the SBA 7(a)
securities Treasury purchased through
UCSB, including investment amounts,
sales proceeds, and other proceeds
received by Treasury, see SIGTARP’s
April 2012 Quarterly Report, page
134.

Unlocking Credit for Small Businesses (“UCSB”)/Small
Business Administration (“SBA”) Loan Support Initiative
On March 16, 2009, Treasury announced the Unlocking Credit for Small
Businesses (“UCSB”) program, which according to Treasury was designed to
encourage banks to increase lending to small businesses. Through UCSB, Treasury
purchased $368.1 million in securities backed by pools of loans from the Small
Business Administration’s (“SBA”) 7(a) Loan Program.728
Treasury signed contracts with two pool assemblers, Coastal Securities, Inc.
(“Coastal Securities”), and Shay Financial Services, Inc. (“Shay Financial”), on
March 2, 2010, and August 27, 2010, respectively.729 Under the governing agreement, EARNEST Partners, on behalf of Treasury, purchased SBA pool certificates
from Coastal Securities and Shay Financial without confirming to the counterparties that Treasury was the buyer.730 From March 19, 2010, to September 28, 2010,
Treasury purchased 31 floating-rate 7(a) securities from Coastal Securities and
Shay Financial for a total of approximately $368.1 million.731
In a series of sales from June 2011 through January 2012, Treasury sold all its
SBA 7(a) securities, for total proceeds of $334.9 million, ending the program.732
According to Treasury, over the life of the program Treasury also had received
$29 million and $13.3 million in amortizing principal and interest payments,
respectively.733

SECT ION 5

TARP OPERATIONS AND
ADMINISTRATION

322

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Under the Emergency Economic Stabilization Act of 2008 (“EESA”), Congress
authorized the Secretary of the Treasury (“Treasury Secretary”) to create the
operational and administrative mechanisms to carry out the Troubled Asset Relief
Program (“TARP”). EESA established the Office of Financial Stability (“OFS”)
within the U.S. Department of the Treasury (“Treasury”). OFS is responsible for
administering TARP.734 Treasury has authority to establish program vehicles, issue
regulations, directly hire or appoint employees, enter into contracts, and designate
financial institutions as financial agents of the Government.735 In addition to using
permanent and interim staff, OFS relies on contractors and financial agents for
legal services, investment consulting, accounting, and other key services.

TARP ADMINISTRATIVE AND PROGRAM OPERATING
EXPENDITURES

As of September 30, 2014, Treasury has obligated $420 million for TARP
administrative costs and $1.1 billion in programmatic operating expenditures for
a total of $1.6 billion since the beginning of TARP. Of that, $176.4 million has
been obligated in the year since September 30, 2013. According to Treasury, as of
September 30, 2014, it had spent $381.5 million on TARP administrative costs
and $1.1 billion on programmatic operating expenditures, for a total of $1.5 billion
since the beginning of TARP. Of that, $185 million has been spent in the year since
September 30, 2013.736
Much of the work on TARP is performed by private vendors rather than
Government employees. Treasury reported that as of September 30, 2014,
it employs 33 career civil servants, 52 term appointees, and 22 reimbursable
detailees, for a total of 107 full-time employees.737 Between TARP’s inception in
2008 and September 30, 2014, Treasury had retained 156 private vendors — 21
financial agents and 135 contractors — to help administer TARP.738 According to
Treasury, as of September 30, 2014, 51 private vendors were active — 8 financial
agents and 43 contractors, some with multiple contracts.739 The number of privatesector staffers who provide services under these agreements dwarfs the number of
people working for OFS. According to Fannie Mae and Freddie Mac, as of June
30, 2014, together they had about 514 people dedicated to working on their TARP
contracts.740 According to Treasury, as of June 30, 2014, or September 30, 2014
— the latest numbers available vary due to reporting cycles — at least another 184
people were working on other active OFS contracts, including financial agent and
legal services contracts, for a total of approximately 698 private-sector employees
working on TARP.741
Table 5.1 provides a summary of the expenditures and obligations for TARP
administrative and programmatic operating costs through September 30, 2014.
The administrative costs are categorized as “personnel services” and “non-personnel
services.” Table 5.2 provides a summary of OFS service contracts, which include
costs to hire financial agents and contractors, and obligations through September

323

324

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

30, 2014, excluding costs and obligations related to personnel services, travel, and
transportation.
TABLE 5.1

TARP ADMINISTRATIVE AND PROGRAMMATIC OBLIGATIONS AND
EXPENDITURES
Budget Object Class Title

Obligations for Period Expenditures for Period
Ending 9/30/2014
Ending 9/30/2014

Administrative
Personnel Services
Personnel Compensation & Benefits
Total Personnel Services

$134,361,417

$134,361,417

$134,361,417

$134,361,417

$2,519,071

$2,511,120

11,960

11,960

715,716

715,716

Non-Personnel Services
Travel & Transportation of Persons
Transportation of Things
Rents, Communications, Utilities &
Misc. Charges
Printing & Reproduction

459

459

280,048,256

241,815,852

2,105,886

1,881,701

246,603

246,603

Land & Structures

—

—

Investments & Loans

—

—

Grants, Subsidies & Contributions

—

—

Other Services
Supplies & Materials
Equipment

Insurance Claims & Indemnities

—

—

634

634

$285,648,586

$247,184,045

$420,010,003

$381,545,462

Programmatic

$1,145,237,547

$1,092,291,489

Total Administrative and Programmatic

$1,565,247,550

$1,473,836,951

Dividends and Interest
Total Non-Personnel Services
Total Administrative

Notes: Numbers may not total due to rounding. The cost associated with “Other Services” under TARP Administrative Expenditures
and Obligations are composed of administrative services including financial, administrative, IT, and legal (non-programmatic) support.
Amounts are cumulative since the beginning of TARP.
Source: Treasury, response to SIGTARP data call, 10/10/2014.

FINANCIAL AGENTS

EESA requires SIGTARP to provide biographical information for each person or
entity hired to manage assets acquired through TARP.742 Treasury hired no new
financial agents in the quarter ended September 30, 2014.743

325

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 5.2

OFS SERVICE CONTRACTS
Date

Vendor

Purpose

10/9/2008

Simpson Thacher & Bartlett
MNP LLP

Legal services for the
implementation of TARP

10/10/2008

Ennis Knupp & Associates Inc.1

10/14/2008
10/15/2008

Type of
Transaction

Obligated Value

Expended Value

Contract

$931,090

$931,090

Investment and Advisory
Services

Contract

2,635,827

2,635,827

The Bank of New York Mellon
Corporation

Custodian

Financial
Agent

59,496,769

57,687,935

PricewaterhouseCoopers, LLP

Internal control services

Contract

34,980,857

33,505,992

10/16/2008

Turner Consulting Group, Inc.2

For process mapping consultant
services

Interagency
Agreement

9,000

—

10/17/2008

Ernst & Young LLP

Accounting Services

Contract

13,640,626

13,640,626

10/28/2008

Hughes Hubbard & Reed LLP

Legal services for the Capital
Purchase Program

Contract

2,835,357

2,835,357

10/28/2008

Squire Sanders & Dempsey LLP

Legal services for the Capital
Purchase Program

Contract

2,687,999

2,687,999

10/30/2008

Lindholm & Associates, Inc.

Human resources services

Contract

614,963

614,963

11/6/2008

Sonnenschein Nath & Rosenthal
LLP4

Legal services related to auto
industry loans

Contract

2,702,441

2,702,441

11/8/2008

Internal Revenue Service

Detailees

Interagency
Agreement

97,239

97,239

11/16/2008

Internal Revenue Service

CSC Systems & Solutions LLC2

Interagency
Agreement

8,095

8,095

11/24/2008

Department of the Treasury —
Departmental Offices

Administrative Support

Interagency
Agreement

16,131,121

16,131,121

12/2/2008

Trade and Tax Bureau —
Treasury

IAA — TTB Development, Mgmt
& Operation of SharePoint

Interagency
Agreement

67,489

67,489

12/4/2008

Washington Post3

Subscription

Interagency
Agreement

395

—

12/9/2008

Sonnenschein Nath & Rosenthal
LLP4

Legal services for the purchase
of asset-backed securities

Contract

102,769

102,769

12/9/2008

Thacher Proffitt & Wood4

Admin action to correct system
issue

Contract

—

—

12/14/2008

Office of Thrift Supervision

Detailees

Interagency
Agreement

164,823

164,823

12/15/2008

Department of Housing and
Urban Development

Detailees

Interagency
Agreement

—

—

12/21/2008

Office of Thrift Supervision

Detailees

Interagency
Agreement

—

—

12/23/2008

Cushman and Wakefield of VA
Inc.

Painting Services for TARP
Offices

Contract

8,841

8,841

1/5/2009

Securities and Exchange
Commission

Detailees

Interagency
Agreement

30,416

30,416

1/6/2009

Colonial Parking Inc.

Lease of parking spaces

Contract

275,217

244,017
Continued on next page

326

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

OFS SERVICE CONTRACTS

(CONTINUED)

Date

Vendor

Purpose

Type of
Transaction

1/26/2009

Cadwalader Wickersham & Taft
LLP

Bankruptcy Legal Services

1/26/2009

Whitaker Brothers Bus
Machines Inc.

1/29/2009

Obligated Value

Expended Value

Contract

$409,955

$409,955

Paper Shredder

Contract

$3,213

$3,213

Office of the Comptroller of the
Currency

Detailees

Interagency
Agreement

501,118

501,118

2/1/2009

Government Accountability
Office

IAA — GAO required by P.L. 110343 to conduct certain activities
related to TARP IAA

Interagency
Agreement

7,459,049

7,459,049

2/2/2009

Internal Revenue Service2

Detailees

Interagency
Agreement

242,499

242,499

2/8/2009

Pat Taylor & Associates, Inc.

Temporary Services for
Document Production, FOIA
assistance, and Program
Support

Contract

692,108

692,108

2/11/2009

Locke Lord Bissell & Liddell
LLP

Initiate Interim Legal Services in
support of Treasury Investments
under EESA

Contract

272,225

272,225

2/18/2009

Fannie Mae

Homeownership Preservation
Program

Financial
Agent

474,252,873

464,695,766

2/18/2009

Freddie Mac

Homeownership Preservation
Program

Financial
Agent

329,447,320

320,903,691

2/19/2009

Financial Clerk U.S. Senate

Congressional Oversight Panel

Interagency
Agreement

3,394,348

3,394,348

2/19/2009

Office of Thrift Supervision

Detailees

Interagency
Agreement

189,533

189,533

2/19/2009

Simpson Thacher & Bartlett
MNP LLP

Capital Assistance Program (I)

Contract

1,530,023

1,530,023

2/19/2009

Venable LLP

Capital Assistance Program (II)
Legal Services

Contract

1,394,724

1,394,724

2/25/2009

Securities and Exchange
Commission

Detailees

Interagency
Agreement

18,531

18,531

2/26/2009

Pension Benefit Guaranty
Corporation

Financial Advisory Services
Related to Auto Program

Interagency
Agreement

7,750,000

7,750,000

3/5/2009

The Boston Consulting Group
Inc.

Management Consulting relating
to the Auto industry

Contract

991,169

991,169

3/16/2009

Earnest Partners

Small Business Assistance
Program

Financial
Agent

2,947,780

2,947,780

3/29/2009

Bingham McCutchen LLP5

SBA Initiative Legal Services
— Contract Novated from TOFS09-D-0005 with McKee Nelson

Contract

273,006

143,893

3/29/2009

Cadwalader Wickersham & Taft
LLP

Auto Investment Legal Services

Contract

17,392,786

17,392,786

3/29/2009

Haynes and Boone, LLP

Auto Investment Legal Services

Contract

345,746

345,746

3/29/2009

McKee Nelson LLP5

SBA Initiative Legal Services
— Contract Novated to
TOFS-10-D-0001 with Bingham
McCutchen LLP

Contract

149,349

126,631
Continued on next page

327

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

OFS SERVICE CONTRACTS

(CONTINUED)

Date

Vendor

Purpose

Type of
Transaction

3/29/2009

Sonnenschein Nath & Rosenthal
LLP4

Auto Investment Legal Services

3/30/2009

FI Consulting Inc.

4/2/2009

Obligated Value

Expended Value

Contract

$1,834,193

$1,834,193

Credit Reform Modeling and
Analysis

Contract

4,867,118

4,071,602

American Furniture Rentals Inc.3

Furniture Rental 1801

Interagency
Agreement

35,190

25,812

4/2/2009

The Boston Consulting Group
Inc.

Management Consulting relating
to the Auto industry

Contract

4,100,195

4,099,923

4/16/2009

Bureau of Engraving and
Printing

Detailee for PTR Support

Interagency
Agreement

45,822

45,822

4/16/2009

Herman Miller Inc.

Aeron Chairs

Contract

53,799

53,799

51,457,781

50,188,970

4/21/2009

AllianceBernstein LP

Asset Management Services

Financial
Agent

4/21/2009

FSI Group, LLC

Asset Management Services

Financial
Agent

27,438,003

27,438,003

4/21/2009

Piedmont Investment Advisors,
LLC

Asset Management Services

Financial
Agent

12,896,927

12,896,927

4/29/2009

State Department

Detailees

Interagency
Agreement

—

—

5/4/2009

Federal Reserve Board

Detailees

Interagency
Agreement

48,422

48,422

5/12/2009

Department of the Treasury —
U.S. Mint

“Making Home Affordable” Logo
search

Interagency
Agreement

325

325

5/14/2009

Knowledgebank Inc.2

Executive Search and
recruiting Services — Chief
Homeownership Officer

Contract

124,340

124,340

5/15/2009

Phacil Inc.

Freedom of Information Act
(FOIA) Analysts to support the
Disclosure Services, Privacy and
Treasury Records

Contract

90,304

90,304

5/19/2009

Securities and Exchange
Commission

Support Services for Mark-tomarket study and FinSOB

Interagency
Agreement

430,000

430,000

5/21/2009

Department of Justice — ATF

Detailees

Interagency
Agreement

243,772

243,772

5/25/2009

Anderson, McCoy & Orta

Legal services for work under
Treasury’s Public-Private
Investment Funds (PPIF) program

Contract

2,286,996

2,286,996

5/25/2009

Simpson Thacher & Bartlett
MNP LLP

Legal services for work under
Treasury’s Public-Private
Investment Funds (PPIF) program

Contract

7,849,026

3,526,454

6/8/2009

Financial Management Service
(FMS)

Development of an Information
Management Plan (IMP)

Interagency
Agreement

89,436

89,436

6/28/2009

Department of the Interior

Federal Consulting Group
(Foresee)

Interagency
Agreement

49,000

49,000

7/16/2009

Korn/Ferry International

Executive search services for
the OFS Chief Investment Officer
position

Contract

74,023

74,023
Continued on next page

328

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

OFS SERVICE CONTRACTS

(CONTINUED)

Date

Vendor

Purpose

Type of
Transaction

7/29/2009

Cadwalader Wickersham & Taft
LLP

Restructuring Legal Services

7/29/2009

Debevoise & Plimpton LLP

7/29/2009

Obligated Value

Expended Value

Contract

$1,278,696

$1,278,696

Restructuring Legal Services

Contract

1,650

1,650

Fox, Hefter, Swibel, Levin &
Carol, LLP

Restructuring Legal Services

Contract

26,493

26,493

8/9/2009

Department of Justice

Detailees

Interagency
Agreement

54,569

54,679

8/9/2009

National Aeronautics and Space
Administration (NASA)

Detailees

Interagency
Agreement

140,889

140,889

8/17/2009

Mercer (US) Inc.

Executive Compensation Data
Subscription

Contract

3,000

3,000

8/24/2009

Department of Justice

Detailees

Interagency
Agreement

63,248

63,248

9/1/2009

Knowledge Mosaic Inc.

SEC filings subscription service

Contract

5,000

5,000

9/9/2009

Equilar, Inc.

Executive Compensation Data
Subscription

Contract

59,990

59,990

9/10/2009

PricewaterhouseCoopers, LLP

PPIP compliance

Contract

3,559,089

3,559,089

9/17/2009

Bureau of Public Debt (BPD)

Administrative Resource Center

Interagency
Agreement

436,054

436,054

9/29/2009

Immixtechnology Inc.3

EnCase eDiscovery ProSuite

Interagency
Agreement

210,184

—

9/29/2009

Immixtechnology Inc.3

Guidance Inc.

Interagency
Agreement

18,000

—

9/29/2009

NNA INC.

Newspaper Delivery

Contract

8,220

8,220

9/29/2009

SNL Financial LC

SNL Unlimited, a web-based
financial analytics service

Contract

460,000

460,000

11/8/2009

Department of the Treasury —
Departmental Offices

Administrative Support

Interagency
Agreement

18,239,373

17,772,584

12/15/2009

Internal Revenue Service

Detailees

Interagency
Agreement

—

—

12/21/2009

Hughes Hubbard & Reed LLP

Contract

1,653,289

896,050

12/22/2009

Avondale Investments, LLC

Asset Management Services

Financial
Agent

772,657

772,657

12/22/2009

Bell Rock Capital, LLC

Asset Management Services

Financial
Agent

2,815,292

2,815,292

12/22/2009

KBW Asset Management, Inc.

Asset Management Services

Financial
Agent

4,937,433

4,937,433

12/22/2009

Lombardia Capital Partners,
LLC

Asset Management Services

Financial
Agent

3,217,866

3,217,866

12/22/2009

Paradigm Asset Management
Co., LLC

Asset Management Services

Financial
Agent

4,813,771

4,661,730

12/22/2009

Raymond James (f/k/a Howe
Barnes Hoefer & Arnett, Inc.)

Asset Management Services

Financial
Agent

3,124,094

3,124,094

12/23/2009

Howe Barnes Hoefer & Arnett,
Inc.

Asset Management Services

Financial
Agent

3,124,094

3,124,094
Continued on next page

329

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

OFS SERVICE CONTRACTS
Date

(CONTINUED)

Type of
Transaction

Vendor

Purpose

1/13/2010

Government Accountability
Office

IAA — GAO required by P.L.110343 to conduct certain activities
related to TARP

Obligated Value

Expended Value

Interagency
Agreement

$7,304,722

$7,304,722

1/14/2010

Association of Government
Accountants

CEAR Program Application

Contract

5,000

5,000

2/15/2010

Internal Revenue Service

Detailees

Interagency
Agreement

52,742

52,742

2/15/2010

The MITRE Corporation

FNMA IR2 assessment — OFS
task order on Treasury MITRE
Contract

Contract

730,192

730,192

2/17/2010

Bureau of Public Debt (BPD)

Administrative Resource Center

Interagency
Agreement

1,221,140

1,221,140

3/7/2010

Qualx Corporation

FOIA Support Services

3/11/2010

Department of the Treasury —
Departmental Offices

Contract

549,518

549,518

Administrative Support

Interagency
Agreement

671,731

671,731

3/21/2010

Financial Management Service
(FMS)

IT Executives signature license

Interagency
Agreement

73,750

73,750

3/25/2010

Federal Maritime Commission
(FMC)

Detailees

Interagency
Agreement

158,600

158,600

3/29/2010

Morgan Stanley & Co.
Incorporated

Disposition Agent Services

Financial
Agent

16,685,290

16,685,290

4/1/2010

Financial Clerk U.S. Senate

Congressional Oversight Panel

Interagency
Agreement

4,797,556

4,797,556

4/7/2010

Squire Sanders & Dempsey LLP

Housing Legal Services

Contract

1,229,350

918,224

4/11/2010

Hewitt EnnisKnupp, Inc.

Investment Consulting Services

Contract

5,468,948

4,458,789

4/21/2010

Digital Management Inc.

Data and Document Management
Consulting Services

Contract

—

—

4/21/2010

MicroLink LLC

Data and Document Management
Consulting Services

Contract

17,260,533

15,783,325

4/22/2010

RDA Corporation

Data and Document Management
Consulting Services

Contract

10,297,246

9,124,852

5/3/2010

Internal Revenue Service

Detailees

Interagency
Agreement

1,320

1,320

5/17/2010

Lazard Fréres & Co. LLC

Transaction Structuring Services

Financial
Agent

14,222,312

14,222,312

6/23/2010

Reed Elsevier Inc (dba
LexisNexis)

Accurint subscription service for
one year — 4 users

Contract

8,208

8,208

6/29/2010

The George Washington
University

Financial Institution Management
& Modeling — Training course
(J.Talley)

Contract

5,000

5,000

7/20/2010

Navigant Consulting Inc.

Program Compliance Support
Services

Contract

5,613,246

1,831,889

7/20/2010

Regis & Associates PC

Program Compliance Support
Services

Contract

1,933,557

1,217,249

7/21/2010

Ernst & Young LLP

Program Compliance Support
Services

Contract

11,083,520

6,343,150

1

Continued on next page

330

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

OFS SERVICE CONTRACTS
Date

(CONTINUED)

Vendor

Purpose

7/21/2010

PricewaterhouseCoopers, LLP

Program Compliance Support
Services

7/21/2010

Schiff Hardin LLP

7/26/2010

Type of
Transaction

Obligated Value

Expended Value

Contract

$—

$—

Housing Legal Services

Contract

97,526

97,526

West Publishing Corporation

Subscription Service for 4 users

Contract

6,664

6,664

8/5/2010

Alston & Bird LLP

Omnibus procurement for legal
services

Contract

232,482

232,482

8/5/2010

Cadwalader Wickersham & Taft
LLP

Omnibus procurement for legal
services

Contract

6,367,027

3,706,654

8/5/2010

Fox, Hefter, Swibel, Levin &
Carol, LLP

Omnibus procurement for legal
services

Contract

150,412

150,412

8/5/2010

Haynes and Boone, LLP

Omnibus procurement for legal
services

Contract

—

—

8/5/2010

Hughes Hubbard & Reed LLP

Omnibus procurement for legal
services

Contract

2,817,792

1,359,797

8/5/2010

Love & Long LLP

Omnibus procurement for legal
services

Contract

—

—

8/5/2010

Orrick Herrington Sutcliffe LLP

Omnibus procurement for legal
services

Contract

—

—

8/5/2010

Paul, Weiss, Rifkind, Wharton &
Garrison LLP

Omnibus procurement for legal
services

Contract

10,147,314

6,919,484

8/5/2010

Perkins Coie LLP

Omnibus procurement for legal
services

Contract

—

—

8/5/2010

Seyfarth Shaw LLP

Omnibus procurement for legal
services

Contract

—

—

8/5/2010

Shulman, Rogers, Gandal,
Pordy & Ecker, PA

Omnibus procurement for legal
services

Contract

213,317

213,347

8/5/2010

Sullivan Cove Reign Enterprises
JV

Omnibus procurement for legal
services

Contract

—

—

8/5/2010

Venable LLP

Omnibus procurement for legal
services

Contract

498,100

960

8/11/2010

Knowledge Mosaic Inc.

SEC filings subscription service

Contract

5,000

5,000

8/29/2010

Department of Housing and
Urban Development

Detailees

Interagency
Agreement

29,915

—

8/31/2010

CQ-Roll Call Inc.

One-year subscription (3 users)
to the CQ Today Breaking News
& Schedules, CQ Congressional
& Financial Transcripts, CQ
Custom Email Alerts

Contract

7,500

7,500

9/16/2010

Bingham McCutchen LLP5

SBA 7(a) Security Purchase
Program

Contract

11,177

11,177

Davis Audrey Robinette

Program Operations Support
Services to include project
management, scanning and
document management and
correspondence

Contract

4,476,497

3,952,431

9/26/2010

Continued on next page

331

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

OFS SERVICE CONTRACTS
Date

(CONTINUED)

Type of
Transaction

Vendor

Purpose

9/29/2010

CCH Incorporated

GSA Task Order for procurement
books — FAR, T&M, Government
Contracts Reference, World
Class Contracting

Obligated Value

Expended Value

Contract

$2,430

$2,430

9/30/2010

Department of the Treasury —
Departmental Offices

Administrative Services

Interagency
Agreement

660,601

660,601

9/30/2010

Financial Clerk U.S. Senate

Congressional Oversight Panel

Interagency
Agreement

5,200,000

2,777,752

10/7/2010
10/7/2010

Management Concepts Inc.

Training Course - 11107705

Contract

995

995

Management Concepts Inc.

Training Course - CON 217

Contract

1,025

1,025

10/7/2010

Management Concepts Inc.

Training Course - CON 216

Contract

1,025

1,025

10/7/2010

Management Concepts Inc.

Training Course - CON 217

Contract

1,025

1,025

10/7/2010

Management Concepts Inc.

Training Course - Anlytc Boot

Contract

1,500

1,500

10/7/2010

Management Concepts Inc.

Training Course - CON 218

Contract

2,214

2,214

10/7/2010

Management Concepts Inc.

Training Course - CON 218

Contract

2,214

2,214

10/7/2010

Management Concepts Inc.

Training Course - CON 218

Contract

2,214

2,214

10/13/2010

Hispanic Association of
Colleges & Universities

Ratification - Internship program
for Aug – Dec 2009

Contract

12,975

12,975

10/25/2010

Government Accountability
Office

IAA — GAO required by P.L. 110343 to conduct certain activities
related to TARP

Interagency
Agreement

5,600,000

3,738,195

11/8/2010

The MITRE Corporation

FNMA IR2 assessment — OFS
task order on Treasury MITRE
Contract for cost and data
validation services related to
HAMP FA

Contract

2,288,166

1,850,677

11/18/2010

Greenhill & Co., Inc.

Structuring and Disposition
Services

Financial
Agent

6,139,167

6,139,167

12/2/2010

Addx Corporation

Acquisition Support Services —
PSD TARP (action is an order
against BPA)

Contract

1,299,002

1,299,002

12/28/2010

Reed Elsevier Inc. (dba
LexisNexis)

Accurint subscription services
one user

Contract

684

684

1/4/2011

Canon U.S.A. Inc.

Administrative Support

Interagency
Agreement

12,013

12,013

1/18/2011

Perella Weinberg Partners &
Co.

Structuring and Disposition
Services

Financial
Agent

5,542,473

5,542,473

1/23/2011

Treasury Franchise Fund —
BPD

Administrative Support

Interagency
Agreement

1,090,859

1,090,860

1/25/2011

Association of Government
Accountants

CEAR Program Application

Contract

5,000

5,000

2/23/2011

ESI International Inc.

Mentor Program Training (call
against IRS BPA)

Contract

6,563

6,563

2/27/2011

Department of the Treasury —
Departmental Offices

Administrative Services

Interagency
Agreement

13,523,880

13,001,815

3/2/2011

Equilar, Inc.

Executive Compensation Data
Subscription

Contract

59,995

59,995
Continued on next page

332

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

OFS SERVICE CONTRACTS
Date

(CONTINUED)

Vendor

Purpose

3/9/2011

Mercer (US) Inc.

Executive Compensation Data
Subscription

3/21/2011

Harrison Scott Publications Inc.

4/19/2011

Type of
Transaction

Obligated Value

Expended Value

Contract

$7,425

$3,600

Subscription Service

Contract

5,894

5,894

Federal Reserve Bank of New
York (FRBNY) HR

FRBNY monitoring and reporting
on financial conditions of AIG

Interagency
Agreement

1,300,000

1,004,063

4/25/2011

PricewaterhouseCoopers, LLP

Financial Services Omnibus

Contract

5,804,710

4,863,595

4/26/2011

ASR Analytics LLC

Financial Services Omnibus

Contract

5,356,872

2,855,305

4/26/2011

Ernst & Young LLP

Financial Services Omnibus

Contract

1,706,480

652,054

4/26/2011

FI Consulting, Inc.

Financial Services Omnibus

Contract

3,954,123

3,700,386

4/26/2011

Lani Eko & Company CPAs LLC

Financial Services Omnibus

Contract

50,000

—

4/26/2011

MorganFranklin Corporation

Financial Services Omnibus

Contract

1,187,957

648,452

4/26/2011

Oculus Group, Inc.

Financial Services Omnibus

Contract

4,069,893

2,830,809

4/27/2011

Booz Allen Hamilton, Inc.

Financial Services Omnibus

Contract

984,953

507,255

4/27/2011

KPMG LLP

Financial Services Omnibus

Contract

50,000

—

4/27/2011

Office of Personnel
Management (OPM) — Western
Management Development
Center

Leadership Training

Interagency
Agreement

21,300

—

5/30/2011

Reed Elsevier Inc (dba
LexisNexis)

Accurint subscriptions by
LexisNexis for 5 users

Contract

10,260

10,260

5/30/2011

West Publishing Corporation

Five (5) user subscriptions to
CLEAR by West Government
Solutions

Contract

7,515

7,515

6/1/2011

ESI International Inc.

Project Leadership, Management
and Communications Workshop

Contract

14,195

14,195

6/8/2011

CQ-Roll Call Inc.

One year subscription to the
CQ Today Breaking News &
Schedules, CQ Congressional &
Financial Transcripts, CQ Custom
Email Alerts

Contract

7,500

7,500

6/17/2011

Winvale Group LLC

Anti-Fraud Protection and
Monitoring Subscription Services

Contract

711,698

664,590

7/27/2011

Internal Revenue Service —
Procurement

Detailee

Interagency
Agreement

84,234

84,234

9/8/2011

Financial Management Service

NAFEO Internship Program

Interagency
Agreement

22,755

22,755

9/11/2011

ADC LTD NM

MHA Felony Certification
Background Checks (BPA)

Contract

339,489

339,489

9/14/2011

ABMI — All Business Machines,
Inc

4 Level 4 Security Shredders
and Supplies

Contract

4,392

4,392

9/28/2011

Knowledge Mosaic Inc.

Renewing TD010-F-249 SEC
filings Subscription Service

Contract

4,200

4,200

9/29/2011

Department of the Interior

Administrative Services

Interagency
Agreement

78,000

78,000

10/3/2011

Internal Revenue Service

Detailees

Interagency
Agreement

168,578

84,289
Continued on next page

333

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

OFS SERVICE CONTRACTS

(CONTINUED)

Date

Vendor

Purpose

10/19/2011

ABMI — All Business Machines,
Inc.

4 Level 4 Security Shredders
and Supplies

11/17/2011

Qualx Corporation

11/29/2011

Type of
Transaction

Obligated Value

Expended Value

Contract

$4,827

$4,827

FOIA Support Services

Contract

68,006

68,006

Houlihan Lokey, Inc.

Transaction Structuring Services

Financial
Agent

13,175,000

12,737,500

12/19/2011

The Allison Group LLC

Pre-Program and Discovery
Process Team Building

Contract

19,065

19,065

12/29/2011

Department of the Treasury

Administrative Support

Interagency
Agreement

901,433

899,268

12/29/2011

Department of the Treasury —
Departmental Offices

Administrative Services

Interagency
Agreement

15,098,746

10,127,276

1/3/2012

Government Accountability
Office

IAA — GAO required by P.L. 110343 to conduct certain activities
related to TARP IAA

Interagency
Agreement

2,500,000

2,475,936

1/4/2012

Office of Personnel
Management (OPM) — Western
Management Development
Center

Frontline Leadership Training
for OFS Managers (7/25/117/29/11)

Interagency
Agreement

31,088

—

2/1/2012

Moody’s Analytics Inc.

ABS/MBS Data Subscription
Services

Contract

2,575,713

2,575,712

2/7/2012

Greenhill & Co., LLC

Structuring and Disposition
Services

Financial
Agent

1,680,000

1,680,000

2/13/2012

Association of Goverment
Accountants

CEAR Program Application

Contract

$5,000

$5,000

2/26/2012

Diversified Search LLC

CPP Board Placement Services

Contract

346,112

296,112

3/5/2012

Integrated Federal Solutions,
Inc.

TARP Acquisition Support (BPA)

Contract

3,551,388

2,631,469

3/14/2012

Department of Interior

Federal Consulting Group

Interagency
Agreement

87,500

57,500

3/29/2012

Department of the Treasury —
Departmental Offices WCF

Administrative Support – Shared
infrastructure, financial systems,
OPA and DO by all employees

Interagency
Agreement

1,137,451

1,137,451

3/29/2012

E-Launch Multimedia, Inc.

Subscription Service

Contract

—

—

4/2/2012

Cartridge Technology, Inc.

Maintenance Agreement for
Canon ImageRunner

Contract

23,538

14,384

5/9/2012

Equilar Inc.

Executive Compensation Data
Subscription

Contract

44,995

44,995

6/11/2012

Department of Justice

Litigation support for No. 10-647
(Fed.Cl.) and No. 11-100 (Fed.
Cl.)

Interagency
Agreement

1,737,884

284,163

6/14/2012

Qualx Corporation

FOIA Support Services

Contract

104,112

104,112

6/30/2012

West Publishing Corporation

Subscription for Anti Fraud Unit
to Perform Background Research

Contract

8,660

8,660

7/25/2012

Knowledge Mosaic Inc.

SEC filings subscription service

Contract

4,750

4,750

COR Training

Interagency
Agreement

4,303

4,303

7/31/2012

Internal Revenue Service

Continued on next page

334

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

OFS SERVICE CONTRACTS
Date

(CONTINUED)

Type of
Transaction

Vendor

Purpose

8/2/2012

Harrison Scott Publications Inc.

Subscription to Commercial
Mortgage Alert Online Service

Obligated Value

Expended Value

Contract

$3,897

$3,897

9/18/2012

Treasury Franchise Fund —
BPD

Administrative Resource Center
(ARC)

Interagency
Agreement

826,803

826,803

9/27/2012

SNL Financial LC

Data Subscription Services for
Financial, Regulatory, and Market
Data and Services

Contract

180,000

180,000

11/18/2012

Government Accountability
Office

Oversight services

Interagency
Agreement

4,800,000

3,896,582

12/12/2012

Association of Government
Accountants

CEAR Program Application

Contract

5,000

5,000

12/18/2012

Department of the Treasury —
Departmental Offices

Administrative support services
for FY 2013

Interagency
Agreement

12,884,241

10,751,898

1/1/2013

Lazard Fréres & Co. LLC

Transaction Structuring Services

Financial
Agent

2,708,333

2,708,333

1/1/2013

Lazard Fréres & Co. LLC

Transaction Structuring Services

Financial
Agent

6,060,484

6,060,484

2/12/2013

Mercer (US) Inc.

Executive Compensation Data
Subscription

Contract

4,050

4,050

3/3/2013

Department of the Treasury —
Departmental Offices WCF

Administrative Support

Interagency
Agreement

1,159,268

1,159,268

3/6/2013

Department of Housing and
Urban Development

Research and Analysis Services

Interagency
Agreement

499,348

444,381

3/25/2013

Bloomberg Finance L.P.

Subscription

Contract

5,400

5,400

3/26/2013

IRS - Treasury Acquisition
Institute

COR Training - TAI

Interagency
Agreement

21,000

—

4/30/2013

Internal Revenue Service

Legal Services

Interagency
Agreement

88,854

88,854

5/9/2013

Equilar Inc.

Executive Compensation Data
Subscription

Contract

45,995

45,995

6/12/2013

West Publishing Corporation

Monthly subscription for 4 users

Contract

16,668

16,668

7/31/2013

Evolution Management Inc.

Outplacement Services for OFS

Contract

85,238

41,774

8/19/2013

Knowledge Mosaic Inc

Subscription service utilized by
the Chief Counsel’s Office for
OFS-related matters

Contract

4,500

4,500

9/24/2013

Government Accountability
Office

Administrative Support

Interagency
Agreement

644,988

644,998

9/26/2013

SNL Financial

Financial Data Subscription
Services — Information
Technology

Contract

420,000

200,000

11/21/2013

Department of the Treasury —
Departmental Offices

Administrative Support

Interagency
Agreement

9,453,973

8,191,848

11/21/2013

Internal Revenue Service

Legal Services

Interagency
Agreement

107,185

107,185

11/26/2013

Treasury Franchise Fund —
BPD

Administrative Support

Interagency
Agreement

1,886,578

1,884,147
Continued on next page

335

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

OFS SERVICE CONTRACTS

(CONTINUED)

Date

Vendor

Purpose

Type of
Transaction

12/11/2013

Association of Government
Accountants

CEAR Program Application

Contract

12/17/2013

Department of Justice

Litigation Services

3/5/2014

Department of Justice

3/12/2014

Obligated Value

Expended Value

$5,000

$5,000

Interagency
Agreement

1,459,000

—

Litigation Services

Interagency
Agreement

2,000,000

747,767

Department of the Treasury —
DO OCIO

Administrative Support

Interagency
Agreement

2,705,893

1,917,985

3/24/2014

Mercer (US) Inc.

On-line Subscription Service
Executive Compensation Data

Contract

4,472

—

4/14/2014

Bloomberg Finance L.P.

Administrative Support

Contract

5,700

5,700

6/13/2014

Winvale Group LLC

Administrative Support

Contract

174,067

41,561

$1,433,334,460

$1,353,142,562

Total

Notes: Numbers may not total due to rounding. Table 5.2 includes all vendor contracts administered under Federal Acquisition Regulations, interagency agreements, and financial agency agreements
entered into in support of OFS since the beginning of the program. The table does not include salary, benefits, travel, and other non-contract related expenses. For some contracts, $0 is obligated if no
task orders have been awarded and so those contracts are not reflected in this table.
1
EnnisKnupp Contract TOFS-10-D-0004, was novated to Hewitt EnnisKnupp (TOFS-10-D-0004).
2
Awarded by other agencies on behalf of OFS and are not administered by PSD.
3
Awarded by other branches within the PSD pursuant to a common Treasury service level and subject to a reimbursable agreement with OFS.
4
Thacher Proffitt & Wood, Contract TOS09-014B, was novated to Sonnenschein Nath & Rosenthal (TOS09-014C).
5
McKee Nelson Contract, TOFS-09-D-0005, was novated to Bingham McCutchen.
Source: Treasury, response to SIGTARP data call, 10/15/2014.

336

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

SECT IO N 6

MONITORING INTERCONNECTIONS
OF THE LARGEST TARP BANKS

338

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

MONITORING INTERCONNECTIONS OF THE
LARGEST TARP BANKS

Taxpayers were called upon to shoulder the more than $420 billion TARP bailout
because the financial stability of our country was threatened by the dangerously
interconnected nature of large financial institutions. The greatest lesson learned
from the financial crisis is the power that these too big to fail institutions had over
not just each other, but over our entire economy – the fates of Wall Street and
Main Street are tied together. These firms were tied as creditors and counterparties
to each other so that if one went down, it would not just pull the others down with
it, it would pull our entire economy down. Because our banking system was so
entangled, the impact of the crisis was felt by banks of all sizes, all over the country.
Taxpayers who funded TARP made a long-term investment to restore financial
stability now and for the future. They placed their money, confidence, and trust in
the hands of regulators and policy makers to first reestablish financial stability, and
then to begin the long and arduous task to uncover, unmask, and understand the
root causes of the financial crisis, to prevent similar threats and future bailouts.
The interconnections of the largest financial institutions, which can threaten
the economy, require constant monitoring to protect hardworking Americans. Even
if regulators may not be able to predict the nature of a future crisis.
By examining the past, we can take advantage of lessons learned to protect
taxpayers in the future. The institutions themselves must continue to assess how
interconnectedness caused the crisis, whether those same connections exist
today, and whether they still pose excessive risk. In order to address too big to fail,
regulators must understand, monitor, and address any interconnection that could
spiral one institution’s troubles into a threat to the entire country. Because not all
interconnections pose a dangerous threat, regulators should take advantage of the
opportunity now to use data they already collect from interconnected financial
institutions to assess whether the interconnections existing today pose a threat to
financial stability. The time to act is now, while the waters are relatively calm, not
when the storm begins and the flood levels start to rise.
An important part of SIGTARP’s mission is to protect taxpayers by bringing
transparency to Government decisions made in the wake of the financial crisis
because there are important implications for the future. For these reasons,
SIGTARP explored these interconnections further. SIGTARP conducted analysis
of some of the interconnections between six of the largest TARP recipients
(JPMorgan, Bank of America, Citigroup, Wells Fargo, Goldman Sachs, and Morgan
Stanley) in 2008 through 2014 from publicly available balance sheet information
for bank holding companies, collected by the Federal Reserve, to see what has
changed and what has stayed the same. Because Goldman Sachs and Morgan
Stanley did not report 2008 data, SIGTARP used their data starting in 2009. The
following provides an update to SIGTARP’s findings first published July 30, 2014.

339

340

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Size and Assets
Total Assets
What does this indicator demonstrate? This is a measure of a bank’s overall size.
When a bank acquires cash, securities (for example, bonds), loans, or other
investments as a result of its financial activities, it records them as assets on its
balance sheet; the sum of all a bank’s assets are its total assets.
How does it connect firms to each other? The largest banks share a network
of contractual links to each other as creditors and counterparties in financial
transactions. If one of these large banks experiences distress or fails, it can spread
consequences to the other large banks via these links.
How could it threaten financial stability? Uncertainty about the financial condition
of one institution can cause market participants to question the financial condition
of other large banks, called contagion. This can undermine confidence in these
institutions and the financial system as a whole.
How did it contribute to the financial crisis and TARP? As SIGTARP previously
reported, the first nine TARP institutions were selected in part because of their
size, as they held more than $11 trillion in banking assets – approximately 75% of
all assets held by U.S. owned banks as of June 30, 2008. Testifying about a small
number of large institutions holding a big share of financial assets, former Treasury
Secretary Paulson told the Financial Crisis Inquiry Commission in May of 2010,
such concentration “is a dangerous risk.”

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

What does this currently indicate about interconnectedness?
FIGURE 6.1

TOTAL CONSOLIDATED ASSETS ($ TRILLIONS)
$3.0

2.5

2.0

1.5

1.0

0.5

0.0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

Since June 2008, Wells Fargo (163%), Bank of America (26%), and JPMorgan
(42%) have all grown in asset size, due in part to acquisitions. Wells Fargo acquired
Wachovia, Bank of America acquired Merrill Lynch and JPMorgan acquired Bear
Stearns. Since June 2009, Morgan Stanley (22%) has also grown larger. Citigroup
and Goldman Sachs are smaller today, by 9% and 3%, respectively. The combined
assets of these six banks, as of June 30, 2014, totaled $9.9 trillion, totaling more
than half of the total assets held by the largest 100 bank holding companies in the
U.S.

Trading & Available-For-Sale Securities
What does this indicator demonstrate? When a bank invests in a financial security
(for example asset-backed or mortgage-backed bonds) to profit from the short-term
changes in its price, the bank holds that security on its balance sheet as a trading
asset. Similar financial securities that are not actively traded, but that the bank
intends to resell before that asset reaches maturity are categorized as available-forsale.
How does it connect firms to each other? Mark to market accounting rules require
a bank to value trading assets and available-for-sale securities on its balance sheet
at the price the bank would receive from selling that asset in an orderly market.
Because the largest banks hold similar securities on their balance sheets (as shown

341

342

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

in Figure 6.3 below), and the prices of these assets fluctuate in unison, distress at
one of the largest banks can cause the values of these assets to drop precipitously.
How could it threaten financial stability? If a large bank experiences financial
distress, it could be forced to reduce its risk by selling assets at fire sale prices. This
requires other large banks to revalue their similar assets to these lower fire sale
prices, potentially causing their own financial distress and forcing their own sale at
fire sale prices. The resulting downward spiral in asset prices erodes bank capital
levels, reduces earnings, and triggers the requirement that banks post additional
collateral, which leaves banks more vulnerable to additional stress.
How did it contribute to the financial crisis and TARP? In 2007 and 2008, rating
agencies downgraded mortgage backed securities (“MBS”) and collateralized
debt obligations (“CDOs”) reflecting the higher probability that the underlying
mortgages would default. As the crisis unfolded, the value of mortgage assets (like
MBS) that banks held, and had borrowed against, plunged. Concerns about banks’
financial condition mounted and investors grew increasingly reluctant to extend
credit to firms thought to have a high exposure to mortgage assets. In cases where
the banks pledged MBS and CDOs to secure short-term borrowings or other
transactions, these write-downs triggered collateral calls, requiring banks to provide
additional collateral to compensate for the increased risk. Investors panicked,
fearing more losses and that banks could not sell these troubled mortgage-related
assets in an illiquid market. Both the direct losses and the market-wide contagion
that ensued, risked leading to the failure or near failure of many large financial
firms across the system.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

What does this currently indicate about interconnectedness?
FIGURE 6.2

TRADING ASSETS AND AVAILABLE-FOR-SALE SECURITIES
COMBINED (AS A PERCENTAGE OF TOTAL ASSETS)
50%
45
40
35
30
25
20
15
10
5
0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2009 – June 2014. See pages 363-369 for more
information.

As of June 30, 2014, Goldman Sachs (39.8%), Morgan Stanley (37.9%),
and Citigroup (30.5%) had more than one-third of their assets in trading assets
and available-for-sale securities, at similar levels to June 2009 and 2010. Within
these categories, Morgan Stanley significantly increased its holdings of safer U.S.
Treasuries from 5% in June 2009 to 19% in June 2014, and remained at relatively
similar levels of holdings of mortgage-backed securities and asset-backed and
other debt securities. Goldman Sachs increased its holdings in trading assets and
available-for-sale securities from 38.4% in June 2009 to 39.8% in June 2014.
Citigroup demonstrated a decrease from 34.1% as a percentage of total assets
in June 2008 to 30.5% in June 2014. The largest percentage of these assets
held by Citigroup is in asset-backed and other debt securities at 39.2%, which
has remained at relatively similar levels since June 2008. Citigroup significantly
increased its levels of safer U.S. Treasuries from 2.5% in June 2008 to 18.4%
in June 2014, which exceeds its 12.5% holdings in mortgage-backed securities.
Wells Fargo increased assets in trading assets and available-for-sale securities from
16.6% in June 2008 to 20.1% in June 2014, with the largest increase in municipal
securities, followed by structured financial products. As a component of Wells
Fargo’s portfolio, mortgage-backed securities decreased from 67.5% in June 2008
to 50.6% in June 2014. Bank of America overall decreased its trading assets and
available-for-sale securities from 28.5% in June 2008 to 24.6% in June 2014. For

343

344

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

Bank of America, the largest portion of assets in these categories is in mortgagebacked securities, which has decreased from 53.1% in June 2008 to 42.3% in June
2014.
FIGURE 6.3

COMPOSITION OF TRADING ASSETS AND AVAILABLE-FOR-SALE SECURITIES (BY BANK)
BANK OF AMERICA

CITIGROUP

JPMORGAN

100%

100%

100%

90

90

90

80

80

80

70

70

70

60

60

60

50

50

50

40

40

40

30

30

30

20

20

20

10

10

10

0

0
2008

2009

2010

2011

2012

2013

2014

0
2008

2009

2010

2011

2012

2013

2014

2008

2009

GOLDMAN SACHS

MORGAN STANLEY

WELLS FARGO

100%

100%

100%

90

90

90

80

80

80

70

70

70

60

60

60

50

50

50

40

40

40

30

30

30

20

20

20

10

10

10

0

0
2008

2009

2010

2011

2012

2013

Derivatives with positive fair value
Other trading assets
Loans
Investments in equity securities/funds

2014

2010

2011

2012

2013

2014

2010

2011

2012

2013

2014

0
2008

2009

2010

2011

2012

2013

2014

Structured financial products
Asset-backed securities and other debt securities
Mortgage-backed securities
Municipal obligations

2008

2009

U.S. Government Agency Obligations
U.S. Treasuries

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Level 3 Assets
What does this indicator demonstrate? Assets that are illiquid and difficult to value
are deemed “Level 3 assets” because their fair value cannot be determined using
observable measures, such as market prices. Rather, banks calculate prices for
these securities using their own best estimates derived from internal models. On
a balance sheet these assets are included in the following categories: available-forsale securities, loans and leases held for sale or held for investment, and trading
assets, and can include asset-backed securities, mortgage-backed securities, or
derivatives with a positive fair value. A derivative might be considered a Level l asset
if it trades through a clearing house where there is an observable price. However,
the pricing becomes more opaque if a derivative does not trade through a clearing
house. Then the derivative might be valued according to internal corporate models
and considered a Level 3 asset.
How does it connect firms to each other? Level 3 asset values rely on internal
corporate models. As then-Chairman of the Federal Reserve Bernanke testified
before Congress in requesting TARP, “because nobody knows what the true hold
to maturity price is, without a market to determine that price, investors would have
to trust the internal estimate of banks.” If a bank with a high proportion of Level 3
assets on its balance sheet faces severe problems, market confidence in the bank
and its internal estimates could rapidly decrease, which can spread to its creditors
and counterparties.
How could it threaten financial stability? Uncertainty about the value of a bank’s
assets can deter investors and lenders from providing capital or credit. Potential
write-downs on these assets reduce earnings and capital, and can trigger collateral
calls, which can further drain liquidity. The loss of funding can force fire sales and
heightens counterparty credit risk as the troubled bank may be unable to pay its
contractual promises to other banks, putting those institutions at risk of losses and
eroding market confidence.
How did it contribute to the financial crisis and TARP? In requesting TARP
authority, then-Treasury Secretary Henry Paulson testified before Congress
on September 24, 2008, “if there are failing institutions, we can address those
individually. But more broadly, the problem is that with the complexity of these
securities and the difficulty of valuation, nobody knows what the banks are worth,
and therefore it is very difficult for private capital to come in to create more balance
sheet capacity so banks can make loans.” The largest banks had to write-down
billions in mark-to-market losses for these securities that they owned.

345

346

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

What does this currently indicate about interconnectedness?
FIGURE 6.4

LEVEL 3 ASSETS
(AS A PERCENTAGE OF TOTAL ASSETS)
10%
9
8
7
6
5
4
3
2
1
0
2009

2010

Bank of America
Citigroup

2011

2012

JPMorgan
Goldman Sachs

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

Since June 2009, each of these large banks has decreased their Level 3 assets
as a percentage of total assets. While most of the banks cut these levels at least in
half, only Goldman Sachs has not. Level 3 assets at Goldman Sachs account for
5% of total assets in June 2014, down from 7% in June 2008, but are nearly double
each of the other banks as a percentage of total assets.

Liabilities
Borrowing
What does this indicator demonstrate? When a bank borrows money, it records these
transactions as liabilities on its balance sheet, although off-balance sheet leverage
can also be significant and not easily detected. Banks typically engage in leverage
by borrowing to acquire more assets, with the aim of increasing their profits.
How does it connect firms to each other? Leverage amplifies the impact of a bank’s
distress on other banks, both directly, by increasing the amount of exposure that
other banks have as creditors, and indirectly, by increasing the size of any asset
liquidation that a bank is forced to undertake as it comes under financial pressure.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

How could it threaten financial stability? Leverage allows a bank to increase its
potential gains or losses on an investment beyond what would be possible through
a direct investment of its own funds. Therefore, if a bank experiences losses, having
used financial leverage, it will sustain larger losses. By increasing its exposure
relative to capital, leverage raises the likelihood that a bank will suffer losses
exceeding its capital. Leverage also increases a bank’s dependence on its creditors’
willingness and ability to fund its balance sheet.
How did it contribute to the financial crisis and TARP? Excessive leverage by banks
was a major contributor to the financial crisis. As then-Treasury Secretary Paulson
testified before the Financial Crisis Inquiry Commission, “we are living beyond
our means on borrowed money and borrowed time….Our financial institutions,
including commercial and investment banks, were notable examples of this
overleveraging. In general, these institutions did not maintain sufficient highquality capital, which left them unable to absorb the significant losses they incurred
as the housing bubble burst. Many of them did not understand their liquidity
positions fully.” In the years before the crisis, many of the largest banks borrowed
to the hilt, on dangerously weak capital levels, leaving them more exposed to
financial distress or collapse if their investments declined in value. Former Treasury
Secretary Geithner testified before Congress on financial reforms on September
23, 2009, “The biggest part of the failure of our system was to allow very large
institutions to take on leverage without constraint. And that is what really causes
crises, what makes them so powerful. And that is why a centerpiece of any reform
effort has to be the establishment of more conservative constraints on leverage
applied to institutions whose future could be critical to the economy as a whole.”

Other Borrowed Money & Subordinated Notes
What does this indicator demonstrate? Banks with a large amount of outstanding
debt are generally more interconnected with the broader financial system, in part
because financial institutions hold a large proportion of outstanding debt.

347

348

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

What does this currently indicate about interconnectedness?
FIGURE 6.5

OTHER BORROWED MONEY & SUBORDINATED NOTES
(AS A PERCENTAGE OF TOTAL LIABILITIES)
35%

30

25

20

15

10

5

0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

Each of these large banks decreased their levels of other borrowed money and
subordinated notes as a percentage of total liabilities from June 2008 (June 2009
for Goldman Sachs and Morgan Stanley) to June 2014. Goldman Sachs has the
highest levels of other borrowed money and subordinated notes of the six financial
institutions at 30.3% of total liabilities in June 2014 (a decrease from 31.1% in
June 2009). Morgan Stanley has the next highest levels at 21.9% of total liabilities
(down from 30.3% in June 2009). The largest reduction came from Wells Fargo,
which decreased its percentage of other borrowed money and subordinated notes
from 31.7% of total liabilities in June 2008 to 13% in June 2014. Bank of America
also reduced its levels from 24.6% of liabilities in June 2008 to 15.7% in June
2014. Citigroup reduced its levels from 27.2% in June 2008 to 16.9% in June
2014.

Derivatives
Firms can be interconnected to each other in many ways related to derivatives. For
example, as SIGTARP previously reported, according to a Federal Reserve Board
memorandum assessing Citigroup’s systemic risk, Citigroup was a major player
in a wide range of derivatives markets, both as a counterparty to over-the-counter
trades, and as a broker and clearing firm for trades on exchanges.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Derivative Liabilities
What does this indicator demonstrate? Derivatives can come in the form of liabilities
in the cost that the bank would incur to exit its interest, foreign exchange,
commodity, equity, and credit derivative contracts held for trading.
How does it connect firms to each other? A bank that has a greater level of derivative
liabilities poses higher counterparty risk throughout the financial system.
How could it threaten financial stability? Counterparty risk is the risk that a
counterparty to a transaction could default before the final settlement of the
contract. Counterparty risk of derivative financial instruments arises when the
derivatives position held by a firm is “in the money” and there is the risk of
nonpayment from the associated counterparty.
How did it contribute to the financial crisis and TARP? Then-Treasury Secretary
Paulson testified before the Financial Crisis Inquiry Commission, “Derivative
contracts, including excessively complex financial products, exacerbated the
problems. These instruments embedded leverage in the institutions’ balance
sheets, along with risks which were so obscured that at times they were not fully
understood by investors, creditors, rating agencies, regulators, or the managements
themselves.”

349

350

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

What does this currently indicate about interconnectedness?
FIGURE 6.6

DERIVATIVE LIABILITIES
(AS A PERCENTAGE OF TOTAL LIABILITIES)
10%
9
8
7
6
5
4
3
2
1
0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

Wells Fargo has the smallest amount of derivatives liabilities, historically near
or less than 1% of total liabilities. By far, Goldman Sachs and Morgan Stanley have
the highest levels of derivative liabilities as a percentage of total liabilities, and
these have decreased from 8.2% for Goldman Sachs in June 2009 to 5.9% in June
2014, and 6.9% in June 2009 for Morgan Stanley to 4.7% in June 2014. Citigroup
and JPMorgan had significant drops in their derivative liabilities as a percentage of
total liabilities. Citigroup went from 5.9% in June 2008, down more than half to
2.8% in June 2014, with most of that reduction coming at the time of Citigroup’s
second TARP bailout in June 2009. JPMorgan also cut their derivative liability as
a percentage of total liabilities by more than half from 5.9% in June 2008 to 2.2%
in June 2014, most of the reduction taking place in 2009. Bank of America has a
smaller percentage of derivative liabilities, but that percentage rose from 1.3% as
a percentage of total liabilities in June 2008 to 2.9% in June 2010, then dropped
down to 1.8% in June 2014.
Derivative holdings may not fully expose dangerous risk. As then-Treasury
Secretary Geithner testified before Congress on financial reforms about derivatives,
“the people who provide that protection, write those commitments, whatever
the form is, they need to hold margin and capital so it allows them to meet those
commitments. And that was the big failure in the system.”

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

Credit Derivatives
A credit derivative is an agreement that shifts credit risk from one party to
another. The party selling protection (acting as a guarantor) takes on the risk that
a “reference entity” (which can be a security, such as a bond, or an individual
company, such as a bank) will default from the protection buyer (acting as a
beneficiary). Most of the credit derivatives held by the largest banks are credit
default swaps. A credit default swap (“CDS”) is an insurance-like contract where
the protection buyer pays a periodic fee to the protection seller in return for
compensation if a reference entity defaults.
Credit Derivatives Sold
What does this indicator demonstrate? After a financial company sells credit
protection, it is obligated to make an insurance-like payment if a specified credit
event occurs.
How did it contribute to the financial crisis and TARP? Beginning in 2007,
insurance giant AIG began experiencing a significant drain on its finances when,
among other things, the company began paying increasing amounts of cash
collateral to counterparties that had purchased CDS from AIG’s Financial Products
group. The problem according to then-Chairman Bernanke in testimony to
Congress on March 24, 2009, was that AIG was essentially using these swaps to
sell insurance against which they neither had the capital to cover, nor had hedged.
By September 2008, bankruptcy loomed for AIG, in part because AIG was
unlikely to be able to raise the capital needed to meet additional calls for large
collateral payments in the case of an anticipated downgrade in its credit rating. On
September 15, 2008, the three largest credit rating agencies downgraded AIG. The
next day, because of concerns that an AIG bankruptcy could cause systemic risk
to the entire financial system, the Federal Reserve, with the support of Treasury,
authorized The Federal Reserve Bank of New York to lend up to $85 billion to
the firm under its emergency powers. Including $68 billion in TARP, AIG’s total
Government bailout package ultimately totaled $182 billion.

351

352

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

What does this currently indicate about interconnectedness?
FIGURE 6.7

CREDIT DERIVATIVES SOLD ($ TRILLIONS)
$6

5

4

3

2

1

0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

As the seller of derivatives, the bank effectively serves as a guarantor, requiring
the bank to make a significant payment if a triggering event occurs. Wells Fargo,
which had the lowest levels of credit derivatives sold in June 2008 at about $1
billion, increased that to $15.6 billion by June 2014. JPMorgan had by far the
highest levels of credit derivatives sold at more than $5 trillion in June 2008. While
it remains at much higher levels than the other banks, it has reduced its levels to
$2.4 trillion by June 2014. The next highest levels of credit derivatives sold were
Goldman Sachs (at $3.0 trillion in June 2009), followed by Morgan Stanley (at
$2.8 trillion in June 2009) and Bank of America (at $2.6 trillion in June 2009).
Both Goldman Sachs and Morgan Stanley have reduced credit derivatives sold
since June 2009 to $1.3 trillion and $1.1 trillion in June 2014, respectively. Bank
of America had a spike in the amount of credit derivatives sold in June 2009 after
purchasing Merrill Lynch, which later decreased, but still left it similar to June
2013 at $1.3 trillion. In June 2008, Citigroup had $1.7 trillion in credit derivatives
sold, which decreased to $1.1 trillion in June 2014.

Credit Derivatives Bought
What does this indicator demonstrate? The protection buyer pays premiums to
the protection seller for credit protection. By purchasing a CDS, the buyer is

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

transferring the risk that a reference entity will default to the protection seller. The
buyer receives a significant payment upon a triggering event.
How did it contribute to the financial crisis and TARP? Each of the largest banks
included in this analysis, or a company they acquired, were counterparties to AIG,
having bought CDS protection leading up to the crisis. They soon learned that the
protection they bought was only as good as the strength of their counterparty.
What does this currently indicate about interconnectedness?
FIGURE 6.8

CREDIT DERIVATIVES BOUGHT ($ TRILLIONS)
$6

5

4

3

2

1

0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

Of the six banks, JPMorgan has had the highest levels of credit derivatives
bought since June 2008. JPMorgan has significantly brought down its credit
derivatives bought from $5.2 trillion in June 2008 to $2.7 trillion in June 2014.
However, this amount is still more than $1 trillion above what the other largest
banks have. Bank of America had a spike in credit derivatives bought from slightly
more than $1.3 trillion in June 2008 to $2.7 trillion in June 2009 after acquiring
Merrill Lynch, which it has reduced each year, but in June 2014 at $1.3 trillion was
similar to June 2008. Although Goldman Sachs and Morgan Stanley did not report
2008 data, both reduced the amount of credit derivatives bought from $3.1 trillion
(Goldman Sachs) and $2.9 trillion (Morgan Stanley) in June 2009 to $1.4 trillion
(Goldman Sachs) and $1.1 trillion (Morgan Stanley) in June 2014. Citigroup has
lowered its credit derivatives bought, initially starting off smaller than some of the

353

354

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

banks at $1.9 trillion in June 2008 to $1.2 trillion in June 2014. Wells Fargo had
a significantly smaller amount of credit derivatives bought compared to the other
big banks in June 2008 ($2.4 billion in June 2008), and the bank has increased its
holding to $19.7 billion in June 2014.

CDS Outstanding for which the Bank is a Reference Entity
What does this indicator demonstrate? One of the components involved in a credit
derivative contract is the reference entity. The reference entity is not a counterparty
to a CDS – it is neither the protection buyer nor seller. Rather, a default by the
reference entity triggers a payment from the seller to the buyer. The amount of
CDS written on a bank identifies the scale of contracts that would be triggered if
the bank defaults.
How does it connect firms to each other? If a credit event occurs, for example the
reference defaults on its bonds, the buyer of the CDS receives payment from the
seller. If the amount of CDS sold on a particular bank is high, this indicates that
a large number of institutions may be exposed to that bank and that if the bank
defaults on its bonds or fails, a significant number of financial market participants
may be affected.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

What does this currently indicate about interconnectedness?
FIGURE 6.9

GROSS NOTIONAL VALUE OF CDS WRITTEN ON THE
BANK ($ BILLIONS)
$140

120

100

80

60

40

20

0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: This data is publically available in DTCC’s trade information warehouse. It can be
accessed at www.dtcc.com/repository-otc-data.aspx. See pages 363-369 for more
information.

In these transactions, two independent parties are betting on whether the bank
will fulfill its obligations to its creditors. A default by the bank triggers payment
from the protection seller to the protection buyer. Since June 2009, counterparties
have reduced the amount of CDS outstanding where each bank serves as a
reference entity. In June 2014, market participants were less exposed than in June
2009, but still significantly exposed, ranging from a gross notional $30 billion to
$54.7 billion, on whether these banks will fulfill their obligations.

Leverage (Short Term Funding)
Regulators were caught unaware of how much the largest banks had leveraged
themselves using short-term borrowing (like commercial paper and repurchase
agreements (repos)) and derivatives. Even a modest drop in the value of a bank’s
assets would severely deplete its capital. When uncertainty led to disruptions in the
short-term funding markets, some institutions that relied on these channels to fund
their operations faced liquidity challenges, and later failed or had to be rescued.
These markets and other interconnections, created contagion, as the crisis spread
even to markets and companies with little or no direct exposure to the mortgage
market.

355

356

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

As former Chairman Bernanke testified on September 24, 2008, when
requesting TARP from Congress,
While perhaps manageable in itself, Lehman’s default was combined
with the unexpectedly rapid collapse of AIG, which together
contributed to the development last week of extraordinarily turbulent
conditions in global financial markets. These conditions caused
equity prices to fall sharply, the cost of short-term credit, where
available, to spike upward, and the liquidity to dry up in many
markets. Losses at a large money market mutual fund sparked
extensive withdrawals from a number of such funds. A marked
increase in the demand for safe assets, a flight to quality, sent the
yield on Treasury bills down to a few hundredths of a percent. By
further reducing asset values and potentially restricting the flow
of credit to households and businesses, these developments pose a
direct threat to economic growth.
Former Treasury Secretary Timothy Geithner testified before Congress in
September 2009, that systemic risk included “the extent to which we are reliant on
very short-term funding that can flee in a heartbeat. And that is what brought the
system crashing down.” He further explained, “How you are funded is as important
to how much risk you take. In fact, they are totally and completely related. And it is
this mismatch between very short-term liabilities that can run and long-term assets
that are liquid that allow the risk in them that creates the inherent vulnerability to
crisis.”

Commercial Paper
What does this indicator demonstrate? Commercial paper is a form of short-term
debt issued by large banks and corporations that matures in 270 days or less. It
may be backed by other financial assets or unsecured. Companies with strong
credit may issue unsecured commercial paper that is not backed by collateral.
Firms generally “roll over” outstanding issues of commercial paper, selling new
commercial paper to pay off previously issued, maturing paper.
How does it connect firms to each other? A bank’s ability to borrow from other
institutions in the commercial paper market expands its available funding beyond
traditional channels, like deposits, allowing that bank to leverage up its balance
sheet. Banks can use their borrowings to acquire riskier assets that earn higher
profits.
How could it threaten financial stability? Commercial paper is considered “hot
money” because borrowers repeatedly roll them over when the loan comes due.
Banks that are overly reliant on “wholesale” funding (including commercial paper,
repos, and brokered deposits, rather than traditional deposits) using short-term
liabilities to fund long-term assets, are exposed to wholesale funding markets that

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

are subject to runs, and liquidity freezes, requiring banks to either raise capital or
sell assets to meet short-term debt requirements.
How did it contribute to the financial crisis and TARP? Money market funds are
the largest buyers of commercial paper. As then-Treasury Secretary Paulson
testified before Congress in requesting TARP authorization, “There is $1.7 trillion
of commercial paper even in the money markets. Commercial paper is shortterm lending for businesses and businesses need this money to flow, to fund daily
operations. If they can’t use that, it all goes back on the banks and it creates a big
problem.”
When Lehman Brothers failed, the Reserve Primary Fund – a prime money
market mutual fund that had $785 million in exposure to Lehman Brothers –
“broke the buck” when its net asset value (“NAV”) fell below $1, to 97 cents per
share. Although Lehman Brother’s commercial paper represented only a small
portion of the Reserve Fund’s total assets (about 1.2%), investors were concerned
about the value of the fund’s other holdings. Fearing for the value of their
investments, worried investors pulled their money out of the fund, which saw its
assets decline by nearly two thirds in about 24 hours. Disruptions quickly spread
to other parts of the money market. In a flight to quality, investors dumped their
commercial paper holdings and increased their holdings in seemingly safer money
market funds and Treasury bonds.
After Lehman Brothers failed, investors lost the appetite to hold unsecured
commercial paper from any large financial institution. Then-Chairman Bernanke
testified to Congress about AIG’s bailout, “Money market mutual funds and others
that held AIG’s roughly $20 billion of commercial paper would also have taken
losses ... [AIG’s] failure would have exacerbated the problems of the money market
mutual funds.”
An unprecedented increase in the rates on commercial paper soon followed,
creating problems for borrowers, particularly for financial companies, as well as
for nonfinancial corporations that used commercial paper to pay their immediate
expenses such as payroll. The broad-based run on commercial paper markets raised
the prospect of some of the largest companies in the United States losing the
capacity to fund and access commercial paper markets.

357

358

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

What does this currently indicate about interconnectedness?
FIGURE 6.10

COMMERCIAL PAPER
(AS A PERCENTAGE OF TOTAL LIABILITIES)
4%

3

2

1

0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

JPMorgan has significantly higher commercial paper outstanding than the
other banks, a level that has increased from 2.3% of liabilities in June 2009 to 3.2%
of liabilities in June 2014. In June 2008, Bank of America’s commercial paper
outstanding was higher than the other banks at 3.9% of liabilities, but it reduced it
to virtually zero in June 2014. The bank with the third highest level of commercial
paper outstanding in June 2008 was Wells Fargo at 1.9%, which it has reduced to
0.3% in June 2014. Citigroup has decreased its commercial paper outstanding from
1.7% in June 2008 to 0.9% in June 2014, which is the second highest level of usage
for these banks. Morgan Stanley and Goldman Sachs have historically had very low
levels of commercial paper outstanding.

Securities Sold Under Agreements To Repurchase — Repo Borrowing
(A Liability)
What does this indicator demonstrate? Used to borrow cash short-term, in this
transaction (also called a repurchase agreement, or “repo”), the borrowing
bank agrees to “sell” securities temporarily and to “repurchase” the securities,
or equivalent ones, from the lender at a later date. Under the agreement, the
borrowing bank hands over securities as collateral and a fee to the lender. The
bank selling the security, agreeing to repurchase it in the future, considers this

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

transaction a repo; the other party buying the security, agreeing to sell it in the
future, deems it a reverse repo.
How does it connect firms to each other? A bank’s ability to borrow from other
institutions in the short-term repo market expands its available funding beyond
traditional channels, like deposits, allowing that bank to leverage up its balance
sheet. Banks can use these borrowings to acquire riskier assets that earn higher
profits.
How could it threaten financial stability? Repos are renewed, or “rolled over,”
frequently and, for that reason, can be considered “hot money” because lenders can
quickly move in and out of these investments on short-notice. When a bank relies
on short-term funding (such as overnight) to finance its longer-term positions, a
sudden loss of funding can force the bank to sell assets at low market prices (fire
sales), or potentially suffer through collateral pressure.
How did it contribute to the financial crisis and TARP? Banks often used mortgagerelated securities as collateral to obtain repo loans. When the market value of
the collateral fell, the repo lenders demanded more collateral from the borrower
to back the repo loan. As the quality of mortgage-related assets deteriorated and
confidence in these financial products plummeted, repo lenders became less and
less willing to accept any collateral with potential subprime exposure, or to extend
credit to banks that appeared to be exposed to the mortgage market. Repo lenders
cared just as much about the health of the repo borrower as about the quality of
the collateral. Repo lenders also insisted on ever-shorter maturities, eventually of
just one day – an inherently destabilizing stipulation, because it gave lenders the
option to quickly pull their funding if they lost confidence in the borrower. Former
Treasury Secretary Paulson explained to the Financial Crisis Inquiry Commission
in May 2010, “the lending practices were very sloppy and borrowing practices....
If I’m repoing a mortgage security, and you’re giving me 100% of the value lending
on that, and not asking for a haircut, that’s sloppy. And so, what happened was,
there was an assumption you could keep borrowing at ‘full value’ on these securities
when they were dropping in value.”

359

360

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

What does this currently indicate about interconnectedness?
FIGURE 6.11

REPO BORROWING
(AS A PERCENTAGE OF TOTAL LIABILITIES)
30%

25

20

15

10

5

0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

Morgan Stanley and Goldman Sachs continue with the highest levels of repo
borrowings. Morgan Stanley started off with 17.6% of liabilities in repo borrowing
in June 2009, had a sharp increase in June 2010 to 28.2%, which decreased to
18.9% in June 2014. Goldman Sachs increased its repo borrowing over these
years from 18.5% of total liabilities in June 2009 to 20.9% in June 2013, before
decreasing to 15% in June 2014. Citigroup’s repo borrowing increased to 12.9% of
liabilities in June 2013 from 12.4% in June 2008, but also decreased to 10.8% in
June 2014. Bank of America’s repo borrowing spiked in June 2012, but overall has
slightly decreased from 14.1% of liabilities in June 2008 to 11.3% in June 2014.
JPMorgan has had the most fluctuations over these years, but has slightly reduced
its use from 11.2% of liabilities in June 2008 to 9.4% in June 2014. Wells Fargo
does not have as much repo borrowing as the other five banks, but increased its
usage from 1.1% in June 2008 to 3.1% in June 2014.

Securities Purchased Under Agreements To Resell — Repo Lending
(An Asset)
What does this indicator demonstrate? Used as a way to lend cash short-term, in
this transaction (also called a reverse repurchase agreement or reverse repo), the
lending bank agrees to “purchase” securities temporarily from the borrower and
to resell the securities, or equivalent ones, back to the borrower at a later date. In

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

exchange, the lending bank receives both securities as collateral and a fee from the
borrower.
How does it connect firms to each other? A repo agreement effectively creates a
secured loan with the securities as collateral. A repo borrower can use the cash
it obtains to buy higher yielding securities, while the repo lender can sell the
collateral if the borrower fails to pay. Experience has shown, however, that the
collateral securities may not serve as sufficient protection to the repo lender if the
repo borrower becomes insolvent or fails.
How could it threaten financial stability? Repos are typically undertaken on the
basis that the repo lender will sell collateral securities immediately following a
borrower’s default in order to be able to recover its cash. Collateral fire sales may
lead to market turmoil, especially if the defaulting repo borrower’s pool of collateral
assets is large relative to the market and concentrated in less liquid asset classes.
The sudden influx of collateral assets for sale puts downward pressure on prices,
with contagion to other financial institutions that have used similar securities as
collateral or hold them in their trading portfolios.
How did it contribute to the financial crisis and TARP? The $2.8 trillion “tri-party”
repo market started to break down as short-term lenders began demanding more
collateral. This made it increasingly difficult for some banks to finance themselves
and created more and more liquidity pressure on them. Regulators arranged
support to Bear Stearns because they believed the bank’s collapse threatened to
freeze the tri-party repo market, leaving short-term lenders with collateral they
would try to dump on the market causing a significant drop in asset prices. As
Former Chairman Bernanke explained to the Financial Crisis Inquiry Commission,
“Another element…that comes up a lot is interconnectedness. Which means,
for example, Bear Stearns, which is not that big a firm, our view on why it was
important to save it—you may disagree—but our view was that because it was so
essentially involved in this critical repo financing market, that its failure would have
brought down that market, which would have had implications for other firms.”

361

362

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

What does this currently indicate about interconnectedness?
FIGURE 6.12

REVERSE REPOS
(AS A PERCENTAGE OF TOTAL ASSETS)
45%
40
35
30
25
20
15
10
5
0
2008

2009

Bank of America
Citigroup

2010

2011

JPMorgan
Goldman Sachs

2012

2013

2014

Morgan Stanley
Wells Fargo

Source: FR Y-9C data, June 2008 – June 2014. See pages 363-369 for more
information.

Morgan Stanley and Goldman Sachs have consistently had higher levels of
repo lending than the other banks. Goldman Sachs had the highest levels of repo
lending at 32.5% of total assets in June 2014. Goldman Sachs repo lending stayed
near 40% of total assets between June 2009 and June 2011, before dropping
beginning in June 2012. Morgan Stanley’s repo lending dropped from 40% in
June 2010 to 31% of total assets in June 2014. Citigroup’s levels of repo lending
increased from 10.5% in June 2008 to 14.5% of total assets in June 2011, before
decreasing during the next three years to 13.1% in June 2014. Bank of America’s
repo lending spiked from 6.2% in June 2008 to 11.5% in June 2011, before
decreasing slightly to 11.1% in June 2014, still above June 2009 levels. JPMorgan’s
repo lending fluctuated, decreasing one year, then increasing the next between
June 2008 to June 2012, before it decreased in June 2013, and again in June 2014
to 14.4% of assets. Wells Fargo has not engaged in a significant amount of repo
lending compared to the other banks and was at 1.9% of total assets in June 2014.

363

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

INDICATORS OF INTERCONNECTEDNESS
This information is collected from publicly available data submitted by JPMorgan (JPM), Bank of America (BAC),
Citigroup (C), Wells Fargo (WFC), Goldman Sachs (GS), and Morgan Stanley (MS) to the Federal Reserve (in quarterly
Consolidated Financial Statements known as “FR Y-9C” reports), indicating how the banks remain interconnected to each
in June 2014, as they were in June 2008.
TABLE 6.1

TOTAL ASSETS
BAC

(000’s)

2008

2009

2010

2011

2012

2013

2014

$1,723,269,816

$2,256,059,674

$2,370,594,235

$2,264,435,837

$2,162,083,396

$2,125,686,000

$2,172,001,000

C

2,100,385,000

1,851,914,000

1,937,656,000

1,956,626,000

1,916,451,000

1,883,988,000

1,909,715,000

JPM

1,775,670,000

2,026,642,000

2,014,019,000

2,246,764,000

2,290,146,000

2,439,494,000

2,520,336,000

GS

N/A

890,137,000

883,529,000

937,192,000

948,981,000

938,611,000

860,008,000

MS

N/A

676,957,000

808,930,000

830,747,000

748,517,000

802,691,000

826,568,000

609,074,000

1,284,176,000

1,225,862,000

1,259,734,000

1,336,204,000

1,440,563,000

1,598,874,000

WFC
TABLE 6.2

TRADING ASSETS AND AVAILABLE-FOR-SALE SECURITIES (AS A PERCENTAGE
OF TOTAL ASSETS)
2008

2009

2010

2011

2012

2013

2014

BAC

28.5%

24.1%

25.2%

26.7%

26.1%

24.8%

24.6%

C

34.1%

28.3%

29.9%

31.0%

30.8%

31.0%

30.5%

JPM

36.4%

37.0%

35.1%

34.6%

33.5%

30.9%

28.0%

N/A

38.4%

36.9%

38.6%

40.9%

39.5%

39.8%

N/A

43.4%

39.9%

35.3%

33.4%

35.7%

37.9%

16.6%

19.2%

16.7%

19.1%

21.8%

21.4%

20.1%

GS
MS
WFC

364

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 6.3

BANK OF AMERICA (COMPOSITION OF TRADING ASSETS AND AVAILABLE-FOR-SALE
SECURITIES)
2008

2009

2010

2011

2012

2013

2014

U.S. Treasuries

4.4%

4.7%

12.6%

11.9%

13.1%

8.3%

13.0%

U.S. Govt Agency
Obligations

2.5%

1.8%

2.0%

1.0%

1.3%

0.9%

1.1%

Municipal obligations

3.5%

3.6%

4.1%

3.0%

2.4%

2.2%

2.8%

Mortgage-backed
securities (MBS)

53.1%

42.2%

43.3%

46.3%

49.1%

49.8%

42.3%

Asset-backed securities
(ABS) and other debt
securities

15.3%

16.9%

17.1%

17.1%

17.5%

17.5%

18.6%

N/A

1.1%

0.9%

0.5%

0.4%

0.9%

1.0%

Investments in equity
securities/funds

5.9%

2.2%

0.6%

3.4%

0.2%

0.8%

1.1%

Loans

0.6%

1.4%

0.8%

0.6%

0.6%

1.2%

1.6%

Other trading assets

5.0%

7.6%

5.4%

7.1%

5.7%

8.8%

10.5%

Derivatives with
positive fair value

9.6%

18.5%

13.4%

9.0%

9.5%

9.6%

8.0%

Structured financial
products

CITIGROUP (COMPOSITION OF TRADING ASSETS AND AVAILABLE-FOR-SALE SECURITIES)
2008

2009

2010

2011

2012

2013

2014

U.S. Treasuries

2.5%

3.3%

10.6%

9.5%

13.1%

14.3%

18.4%

U.S. Govt Agency
Obligations

4.4%

4.0%

8.4%

8.2%

5.9%

4.2%

2.9%

Municipal obligations

4.2%

4.5%

3.8%

3.3%

4.0%

3.7%

2.7%

Mortgage-backed
securities (MBS)

14.3%

15.1%

11.0%

11.9%

14.9%

16.2%

12.5%

Asset-backed securities
(ABS) and other debt
securities

39.2%

41.5%

43.8%

46.2%

39.5%

37.9%

39.2%

N/A

2.2%

2.5%

1.1%

0.9%

1.5%

1.5%

0.6%

1.2%

1.0%

1.0%

0.6%

0.7%

1.0%

Structured financial
products
Investments in equity
securities/funds
Loans

5.4%

3.7%

2.6%

2.8%

2.4%

2.3%

2.2%

Other trading assets

15.0%

10.6%

6.4%

6.9%

8.3%

9.6%

11.0%

Derivatives with
positive fair value

14.5%

13.8%

9.7%

9.0%

10.3%

9.7%

8.7%
Continued on next page

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

JPMORGAN (COMPOSITION OF TRADING ASSETS AND AVAILABLE-FOR-SALE SECURITIES)
2008

2009

2010

2011

2012

2013

2014

U.S. Treasuries

4.3%

2.3%

3.0%

2.5%

4.0%

7.2%

7.1%

U.S. Govt Agency
Obligations

1.4%

5.6%

3.1%

1.2%

1.2%

0.8%

0.5%

Municipal obligations

2.4%

2.1%

2.1%

2.6%

4.9%

4.9%

5.0%

Mortgage-backed
securities (MBS)

20.6%

33.6%

30.1%

28.3%

27.1%

26.5%

22.4%

Asset-backed securities
(ABS) and other debt
securities

22.0%

28.3%

29.9%

29.7%

29.1%

27.5%

28.1%

N/A

2.4%

2.7%

2.8%

4.1%

3.8%

4.2%

0.3%

0.3%

0.3%

0.4%

0.3%

0.3%

0.5%

Loans

10.4%

4.2%

4.5%

4.7%

4.5%

5.1%

4.7%

Other trading assets

19.6%

8.4%

13.0%

17.9%

13.9%

14.1%

18.7%

Derivatives with
positive fair value

19.0%

13.0%

11.3%

9.8%

10.8%

9.8%

8.8%

Structured financial
products
Investments in equity
securities/funds

GOLDMAN SACHS (COMPOSITION OF TRADING ASSETS AND AVAILABLE-FOR-SALE
SECURITIES)
2009

2010

2011

2012

2013

2014

U.S. Treasuries

7.6%

11.7%

9.2%

11.6%

14.5%

12.8%

U.S. Govt Agency
Obligations

4.7%

3.9%

2.4%

3.6%

1.5%

1.7%

Municipal obligations

0.9%

0.7%

0.9%

0.9%

0.4%

0.4%

Mortgage-backed
securities (MBS)

17.5%

15.5%

16.8%

16.2%

14.5%

14.4%

Asset-backed securities
(ABS) and other debt
securities

22.8%

23.6%

24.2%

23.9%

22.8%

21.5%

Structured financial
products

0.3%

0.5%

0.9%

0.8%

0.8%

0.7%

Investments in equity
securities/funds

0.2%

0.1%

0.0%

0.1%

0.0%

0.0%

Loans

7.5%

6.8%

6.1%

3.3%

4.0%

2.7%

Other trading assets

18.5%

20.5%

24.5%

21.8%

23.3%

30.0%

Derivatives with
positive fair value

20.1%

16.6%

15.0%

17.8%

18.0%

15.8%
Continued on next page

365

366

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

MORGAN STANLEY (COMPOSITION OF TRADING ASSETS AND AVAILABLE-FORSALE SECURITIES)
2009

2010

2011

2012

2013

2014

U.S. Treasuries

5.0%

10.7%

7.7%

14.9%

14.4%

19.0%

U.S. Govt Agency
Obligations

8.9%

6.4%

1.7%

3.3%

2.1%

1.0%

Municipal obligations

1.5%

1.0%

1.1%

1.1%

0.6%

0.5%

Mortgage-backed
securities (MBS)

10.3%

10.7%

13.2%

15.5%

14.6%

11.0%

Asset-backed securities
(ABS) and other debt
securities

21.5%

22.6%

27.8%

23.1%

20.8%

18.8%

Structured financial
products

0.6%

1.2%

1.3%

0.9%

1.0%

0.9%

Investments in equity
securities/funds

0.0%

0.1%

0.0%

0.0%

0.0%

0.0%

Loans

11.0%

7.7%

4.1%

3.2%

2.5%

3.1%

Other trading assets

21.2%

22.9%

27.9%

24.8%

31.0%

35.7%

Derivatives with
positive fair value

19.8%

16.7%

15.3%

13.2%

13.1%

10.0%

WELLS FARGO (COMPOSITION OF TRADING ASSETS AND AVAILABLE-FOR-SALE SECURITIES)
2008

2009

2010

2011

2012

2013

2014

U.S. Treasuries

0.7%

1.0%

1.5%

1.4%

2.0%

2.4%

4.2%

U.S. Govt Agency
Obligations

1.0%

1.9%

2.2%

5.5%

1.5%

3.0%

3.1%

Municipal obligations

7.5%

5.5%

8.7%

11.0%

13.7%

14.1%

14.7%

Mortgage-backed
securities (MBS)

67.5%

64.4%

53.3%

50.8%

52.7%

51.4%

50.6%

Asset-backed securities
(ABS) and other debt
securities

13.2%

13.9%

17.7%

16.2%

16.0%

14.9%

11.2%

N/A

1.6%

2.7%

3.5%

3.4%

6.1%

7.0%

Investments in equity
securities/funds

3.6%

2.4%

2.5%

1.8%

1.0%

0.9%

1.2%

Loans

0.0%

0.0%

0.0%

0.0%

0.0%

0.4%

0.6%

Other trading assets

2.0%

1.1%

1.5%

2.2%

1.9%

2.2%

3.6%

Derivatives with
positive fair value

4.5%

8.2%

10.0%

7.5%

7.8%

4.6%

3.9%

Structured financial
products

367

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 6.4

LEVEL 3 ASSETS (AS A PERCENTAGE OF TOTAL ASSETS)
2009

2010

2011

2012

2013

2014

BAC

5.4%

3.8%

3.2%

1.9%

1.5%

1.3%

C

6.1%

4.3%

3.3%

2.7%

2.4%

2.3%

JPM

6.8%

5.9%

4.9%

4.5%

2.8%

2.4%

GS

7.0%

5.8%

5.5%

5.3%

4.9%

5.0%

MS

8.7%

6.7%

5.7%

4.8%

3.1%

2.7%

WFC

4.8%

3.9%

3.8%

3.7%

2.9%

2.2%

TABLE 6.5

OTHER BORROWED MONEY & SUBORDINATED NOTES (AS A PERCENTAGE OF TOTAL
LIABILITIES)
2008

2009

2010

2011

2012

2013

2014

BAC

24.6%

27.2%

26.4%

23.4%

17.7%

16.3%

15.7%

C

27.2%

26.8%

28.6%

23.9%

20.1%

16.6%

16.9%

JPM

22.6%

21.9%

22.9%

20.7%

17.5%

18.3%

18.1%

N/A

31.1%

29.8%

30.6%

27.3%

26.7%

30.3%

N/A

30.3%

24.9%

29.1%

27.6%

24.0%

21.9%

31.7%

23.0%

18.4%

14.5%

12.2%

11.1%

13.0%

GS
MS
WFC
TABLE 6.6

DERIVATIVE LIABILITIES (AS A PERCENTAGE OF TOTAL LIABILITIES)
2008

2009

2010

2011

2012

2013

2014

BAC

1.3%

2.5%

2.9%

2.5%

2.6%

2.4%

1.8%

C

5.9%

3.8%

3.3%

3.7%

3.4%

3.1%

2.8%

JPM

5.9%

3.6%

3.3%

3.1%

3.6%

2.9%

2.2%

GS

N/A

8.2%

7.1%

5.5%

6.0%

6.0%

5.9%

MS

N/A

6.9%

6.4%

5.3%

5.1%

5.7%

4.7%

WFC

0.2%

0.6%

0.8%

0.9%

1.2%

0.6%

0.5%

TABLE 6.7

CREDIT DERIVATIVES SOLD
BAC

(000’s)

2008

2009

2010

2011

2012

2013

2014

$1,356,142,973

$2,647,500,566

$2,444,637,106

$2,031,317,220

$1,646,433,518

$1,560,454,000

$1,302,648,000

C

1,726,043,000

1,365,688,000

1,181,324,000

1,352,785,000

1,383,774,000

1,360,849,000

1,107,165,000

JPM

5,007,989,000

3,326,008,000

2,746,166,000

3,092,913,000

3,013,849,000

3,102,861,000

2,434,227,000

GS

N/A

2,977,776,000

2,145,116,000

2,081,314,000

1,871,017,000

1,709,995,000

1,338,608,000

MS

N/A

2,789,703,000

2,234,662,000

2,866,302,000

2,160,584,000

1,740,881,000

1,122,335,000

1,025,000

105,173,000

59,743,000

44,536,000

29,551,000

22,527,000

15,612,000

WFC

368

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

TABLE 6.8

CREDIT DERIVATIVES BOUGHT

(000’s)

2008

2009

2010

2011

2012

2013

2014

BAC

1,337,181,255

2,650,678,318

2,444,185,049

2,107,064,575

1,683,485,453

1,568,773,000

1,328,216,000

C

1,874,595,000

1,480,266,000

1,290,479,000

1,472,477,000

1,489,129,000

1,427,296,000

1,169,586,000

JPM

5,224,083,000

3,487,227,000

2,697,695,000

3,012,524,000

3,001,170,000

3,132,788,000

2,665,454,000

N/A

3,149,806,000

2,291,587,000

2,222,651,000

1,980,549,000

1,790,159,000

1,416,260,000

N/A

2,895,483,000

2,285,865,000

2,887,766,000

2,146,260,000

1,717,922,000

1,117,048,000

2,379,000

116,517,000

62,190,000

42,516,000

31,491,000

26,239,000

19,683,000

GS
MS
WFC
TABLE 6.9

CDS OUTSTANDING FOR WHICH THE BANK IS A REFERENCE ENTITY (GROSS NOTIONAL)
2008

2009

2010

2011

2012

2013

2014

BAC

N/A 101,671,155,302

76,869,071,074

79,766,387,586

85,827,723,648

58,042,670,084

54,728,891,766

C

N/A

56,186,042,866

53,252,443,648

55,622,112,811

64,975,971,946

48,032,222,237

38,251,674,130

JPM

N/A 119,233,578,679

81,346,125,810

83,393,010,123

82,593,442,781

56,234,013,304

44,414,999,405

GS

N/A

68,046,203,478

63,869,374,264

68,545,728,444

75,738,112,171

58,662,039,398

42,227,236,738

MS

N/A

71,333,226,421

66,025,144,827

72,138,088,976

82,301,264,223

62,112,044,546

42,666,038,163

WFC

N/A

95,022,067,874

58,472,934,008

61,598,271,285

57,745,932,380

43,443,110,071

30,044,687,963

TABLE 6.10

COMMERCIAL PAPER (AS A PERCENTAGE OF TOTAL LIABILITIES)
2008

2009

2010

2011

2012

2013

2014

BAC

3.9%

0.7%

1.1%

0.3%

0.0%

0.0%

0.0%

C

1.7%

1.7%

2.0%

1.3%

1.2%

1.1%

0.9%

JPM

3.1%

2.3%

2.2%

2.5%

2.9%

3.2%

3.2%

GS

N/A

0.1%

0.2%

0.1%

0.1%

0.2%

0.1%

MS

N/A

0.1%

0.1%

0.1%

0.0%

0.0%

0.0%

WFC

1.9%

0.6%

0.6%

0.3%

0.4%

0.3%

0.3%

TABLE 6.11

REPOS (AS A PERCENTAGE OF TOTAL LIABILITIES)
2008

2009

2010

2011

2012

2013

2014

BAC

14.1%

13.1%

14.3%

11.7%

14.8%

12.3%

11.3%

C

12.4%

10.8%

11.0%

11.4%

12.3%

12.9%

10.8%

JPM

11.2%

15.7%

12.6%

12.2%

12.4%

11.6%

9.4%

GS

N/A

18.5%

19.9%

19.7%

19.4%

20.9%

15.0%

MS

N/A

17.6%

28.2%

22.2%

20.6%

23.0%

18.9%

WFC

1.1%

1.4%

2.5%

3.1%

2.9%

2.9%

3.1%

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

TABLE 6.12

REVERSE REPOS (AS A PERCENTAGE OF TOTAL ASSETS)
BAC

2008

2009

2010

2011

2012

2013

2014

6.2%

8.7%

11.3%

11.5%

11.2%

11.1%

11.1%

C

10.5%

9.9%

11.9%

14.5%

14.2%

14.0%

13.1%

JPM

17.8%

14.2%

15.9%

14.9%

17.2%

15.1%

14.4%

N/A

41.9%

42.8%

38.6%

36.8%

36.1%

32.5%

MS

N/A

33.9%

40.0%

37.7%

37.7%

33.8%

31.0%

WF

0.3%

0.9%

1.0%

2.0%

2.5%

2.3%

1.9%

GS

369

ENDNOTES
370

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

1.

2.
3.
4.
5.
6.

7.
8.
9.
10.

11.

12.
13.
14.
15.
16.
17.
18.
19.
20.
21.
22.
23.
24.
25.
26.
27.
28.

29.
30.

Treasury, Treasury Notes, “Expanding our efforts to help more homeowners and strengthen hard-hit communities,” 1/27/2012, www.treasury.
gov/connect/blog/Pages/Expanding-our-efforts-to-help-more-homeowners-and-strengthen-hard-hit-communities.aspx, accessed 10/6/2014;
Treasury, “Obama Administration Extends Deadline for Making Home Affordable Program,” 5/30/2013, www.makinghomeaffordable.gov/aboutmha/latest-news/Pages/Obama-Administration-Extends-Deadline-for-Making-Home-Affordable-Program.aspx, accessed 10/6/2014; Treasury
Press Release, “Secretary Lew Unveils New Efforts to Assist Struggling and Prospective Homeowners, Provide More Affordable Options for
Renters,” 6/26/2014, www.treasury.gov/press-center/press-releases/Pages/jl2444.aspx, accessed 10/6/2014.
SIGTARP, “Reports & Audits,” www.sigtarp.gov/pages/reportsaudits.aspx, accessed 10/6/2014.
Treasury Press Release, “Secretary Lew Unveils New Efforts to Assist Struggling and Prospective Homeowners, Provide More Affordable
Options for Renters,” 6/26/2014, www.treasury.gov/press-center/press-releases/Pages/jl2444.aspx, accessed 10/6/2014.
SIGTARP, analysis of complaints received from homeowners participating in or seeking MHA assistance.
SIGTARP, analysis of complaints received from homeowners participating in or seeking MHA assistance.
SIGTARP Press Statement, “$320 Million Non-Prosecution Agreement Reached with TARP Recipient SunTrust Bank for Harming
Homeowners Who Sought HAMP Home Loan Modifications,” 7/3/2014, www.sigtarp.gov/Statements/Romero_Remarks_on_SunTrust_
Nonprosecution_Agreement.pdf, accessed 10/6/2014.
Consumer Financial Protection Bureau, “CFPB Bulletin 2013-01,” 2/11/2013, files.consumerfinance.gov/f/201302_cfpb_bulletin-on-servicingtransfers.pdf, accessed 10/6/2014.
Consumer Financial Protection Bureau, “Bulletin 2014-01,” 8/19/2014, files.consumerfinance.gov/f/201408_cfpb_bulletin_mortgage-servicingtransfer.pdf, accessed 10/6/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, pp.24 - 28, www.
hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/6/2014.
SIGTARP, analysis of Treasury Press Releases, www.treasury.gov/press-center/Pages/default.aspx, accessed 10/6/2014; SIGTARP, analysis of
“Making Home Affordable Program Performance Reports,” (including Quarterly Servicer Assessments), www.treasury.gov/initiatives/financialstability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, pp.24 - 28, www.
hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/6/2014; SIGTARP, analysis of Treasury Press Releases,
www.treasury.gov/press-center/Pages/default.aspx, accessed 10/6/2014; SIGTARP, analysis of “Making Home Affordable Program Performance
Reports,” (including Quarterly Servicer Assessments), www.treasury.gov/initiatives/financial-stability/reports/Pages/Making-Home-AffordableProgram-Performance-Report.aspx, accessed 10/6/2014.
SIGTARP, analysis of MHA Compensation Matrix, www.hmpadmin.com/portal/programs/docs/hamp_servicer/
mhacompensationmatrix01242014.pdf, accessed 10/6/2014.
Treasury, Transactions Report-Housing Programs, 9/29/2014, www.treasury.gov/initiatives/financial-stability/reports/Pages/TARP-HousingTransaction-Reports.aspx accessed 10/17/2014.
Treasury, “Commitment to Purchase Financial Instrument and Servicer Participation Agreement,” pp.9 -10, www.hmpadmin.com/portal/
programs/docs/hamp_servicer/servicerparticipationagreement.pdf, accessed 10/6/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, pp.24 - 28, www.
hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/6/2014.
Treasury, “Commitment to Purchase Financial Instrument and Servicer Participation Agreement,” pp.9 - 10, www.hmpadmin.com/portal/
programs/docs/hamp_servicer/servicerparticipationagreement.pdf, accessed 10/6/2014.
SIGTARP, analysis of complaints received from homeowners participating in or seeking MHA assistance.
SIGTARP, “Quarterly Report to Congress,” 10/26/2010, www.sigtarp.gov/Quarterly%20Reports/October2010_Quarterly_Report_to_Congress.
pdf, accessed 10/6/2014.
SIGTARP, analysis of complaints received from homeowners participating in or seeking MHA assistance.
U.S. Department of Justice, Restitution and Remediation Agreement with SunTrust, www.sec.gov/Archives/edgar/
data/750556/000075055614000139/hampfinalagreementcombined.htm, accessed 10/6/2014.
U.S. Department of Justice, Restitution and Remediation Agreement with SunTrust, www.sec.gov/Archives/edgar/
data/750556/000075055614000139/hampfinalagreementcombined.htm, accessed 10/6/2014.
U.S. Department of Justice, Restitution and Remediation Agreement with SunTrust, www.sec.gov/Archives/edgar/
data/750556/000075055614000139/hampfinalagreementcombined.htm, accessed 10/6/2014.
Treasury, Supplemental Directive 11-12, “Making Home Affordable Program – Servicing Transfers,” 12/27/2011, available at www.hmpadmin.
com/portal/programs/docs/hamp_servicer/sd1112.pdf, accessed 9/26/2014.
Pursuant to Supplemental Directive 11-12, transfers resulting from mergers, acquisitions or other changes of control of the original servicer
were required to be provided “as soon as legally possible.”
SIGTARP, analysis of “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, pp.110-112,
www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/6/2014.
Consumer Financial Protection Bureau, “CFPB Bulletin 2013-01,” 2/11/2013, files.consumerfinance.gov/f/201302_cfpb_bulletin-on-servicingtransfers.pdf, accessed 10/6/2014.
Consumer Financial Protection Bureau, “Bulletin 2014-01,” 8/19/2014, files.consumerfinance.gov/f/201408_cfpb_bulletin_mortgage-servicingtransfer.pdf, accessed 10/6/2014.
Treasury, “Making Home Affordable Program Performance Reports,” (including Q2 2014 MHA Servicer Assessments), www.treasury.gov/
initiatives/financial-stability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014; Treasury, “Citizens’
Report,” Fiscal Year 2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/Citizens_Report_FY2013-1-28-14.pdf, accessed
10/6/2014.
Treasury, “MHA Servicing Transfers and Job Aid,” www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhaservicingtransfers.pdf, accessed
10/6/2014.
Treasury, “Making Home Affordable Program Performance Reports,” (including Q2 2014 MHA Servicer Assessments), www.treasury.gov/
initiatives/financial-stability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014; Treasury, “Citizens’

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

31.
32.

33.
34.

35.

36.
37.
38.

39.

40.
41.
42.
43.
44.
45.
46.
47.
48.

49.

50.
51.
52.
53.
54.
55.
56.
57.
58.
59.
60.

Report,” Fiscal Year 2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/Citizens_Report_FY2013-1-28-14.pdf, accessed
10/6/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, pp.35-36, www.
hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/6/2014.
Treasury, “Making Home Affordable Program Performance Reports,” (including Q2 2014 MHA Servicer Assessments), www.treasury.gov/
initiatives/financial-stability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014; Treasury, “Citizens’
Report,” Fiscal Year 2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/Citizens_Report_FY2013-1-28-14.pdf, accessed
10/6/2014.
U.S. Department of Justice, Restitution and Remediation Agreement with SunTrust, www.sec.gov/Archives/edgar/
data/750556/000075055614000139/hampfinalagreementcombined.htm, accessed 10/6/2014.
Consumer Financial Protection Bureau, “CFPB Bulletin 2013-01,” 2/11/2013, files.consumerfinance.gov/f/201302_cfpb_bulletin-on-servicingtransfers.pdf, accessed 10/6/2014; Consumer Financial Protection Bureau, “Bulletin 2014-01,” 8/19/2014, files.consumerfinance.gov/f/201408_
cfpb_bulletin_mortgage-servicing-transfer.pdf, accessed 10/6/2014.
SIGTARP, analysis of Treasury Press Releases, www.treasury.gov/press-center/Pages/default.aspx, accessed 10/6/2014; SIGTARP, analysis of
“Making Home Affordable Program Performance Reports,” (including Quarterly Servicer Assessments), www.treasury.gov/initiatives/financialstability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014.
SIGTARP, “Factors Affecting Implementation of the Home Affordable Modification Program,” 3/25/2010, www.sigtarp.gov/Audit%20Reports/
Factors_Affecting_Implementation_of_the_Home_Affordable_Modification_Program.pdf, accessed 10/6/2014.
Treasury, “Making Home Affordable, Program Performance Report Through April 2011,” www.treasury.gov/initiatives/financial-stability/reports/
Documents/April%202011%20MHA%20Report%20FINAL.PDF, accessed 10/6/2014.
Treasury, “Making Home Affordable Program Performance Reports,” (including Q2 2014 MHA Servicer Assessments), www.treasury.gov/
initiatives/financial-stability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014; Treasury, “Citizens’
Report,” Fiscal Year 2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/Citizens_Report_FY2013-1-28-14.pdf, accessed
10/6/2014.
Treasury, “Making Home Affordable Program Performance Reports,” (including Q2 2014 MHA Servicer Assessments), www.treasury.gov/
initiatives/financial-stability/reports/Pages/Making-Home-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014; Treasury, “Citizens’
Report,” Fiscal Year 2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/Citizens_Report_FY2013-1-28-14.pdf, accessed
10/6/2014.
Urban Institute, “Nonbank Specialty Servicers: What’s the Big Deal?,” August 2014, www.urban.org/UploadedPDF/413198-Nonbank-SpecialityServicers-Whats-the-Big-Deal.pdf, accessed 10/17/2014.
SEC EDGAR database, Q2 2011 and Q2 2014, Quarterly Financial Report (10-Q) filings of Ocwen Financial Corp., Nationstar Mortgage
Holdings Inc., and Walter Investment Management Corp, www.sec.gov, accessed 10/17/2014.
Treasury, “HAMP 1MP: Program Volumes - Combined Tier 1/Tier 2: Top 25 HAMP Servicers – August 2014,” accessed 10/15/2014.
Treasury response to SIGTARP data call 10/10/2014.
Treasury, “Making Home Affordable, Program Performance Report Through April 2011,” www.treasury.gov/initiatives/financial-stability/reports/
Documents/April%202011%20MHA%20Report%20FINAL.PDF, accessed 10/6/2014.
Treasury response to SIGTARP data call 10/10/2014.
Treasury, “HAMP Reporting System Servicer Release Notes,” 6/17/2013, www.hmpadmin.com//portal/programs/docs/hamp_servicer/release_
notes/hampreleasenotes080113.pdf, accessed 10/6/2014.
Treasury, “MHA Servicing Transfers and Job Aid,” www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhaservicingtransfers.pdf, accessed
10/6/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, pp.24 - 28, www.
hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/6/2014; Treasury, “Making Home Affordable Program
Performance Reports,”(including Q2 2014 MHA Servicer Assessments), www.treasury.gov/initiatives/financial-stability/reports/Pages/MakingHome-Affordable-Program-Performance-Report.aspx, accessed 10/6/2014; Treasury, “Citizens’ Report,” Fiscal Year 2013, www.treasury.gov/
initiatives/financial-stability/reports/Documents/Citizens_Report_FY2013-1-28-14.pdf, accessed 10/6/2014.
Consumer Financial Protection Bureau, “CFPB Bulletin 2013-01,” 2/11/2013, files.consumerfinance.gov/f/201302_cfpb_bulletin-on-servicingtransfers.pdf, accessed 10/6/2014; Consumer Financial Protection Bureau, “Bulletin 2014-01,” 8/19/2014, files.consumerfinance.gov/f/201408_
cfpb_bulletin_mortgage-servicing-transfer.pdf, accessed 10/6/2014.
Emergency Economic Stabilization Act of 2008, P.L. 110-343, 10/3/2008, p. 1.
Emergency Economic Stabilization Act of 2008, P.L. 110-343, 10/3/2008, pp. 2, 16.
Treasury Press Release, “Treasury Department Releases Text of Letter from Secretary Geithner to Hill Leadership on Administration’s Exit
Strategy for TARP,” 12/9/2009, www.treasury.gov/press-center/press-releases/Pages/tg433.aspx, accessed 10/1/2014.
Emergency Economic Stabilization Act of 2008, P.L. 110-343, 10/3/2008, p. 9.
Dodd-Frank Wall Street Reform and Consumer Protection Act, P.L. 111-203, 7/21/2010, pp. 1, 759.
Helping Families Save Their Homes Act of 2009, P.L. 111-22, 5/20/2009, §202; Dodd-Frank Wall Street Reform and Consumer Protection Act,
P.L. 111-203, 7/21/2010, §1302.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/1/2014.
Treasury, Section 105(a) Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Final%20September%20
2014%20Monthly%20Report%20to%20Congress.pdf, accessed 10/10/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/Daily_TARP_Update%20-%2010.01.2014.pdf, accessed 10/1/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/1/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/1/2014.

371

372

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

61.
62.
63.
64.
65.
66.
67.

68.
69.
70.
71.

72.
73.
74.
75.
76.
77.
78.

79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.

90.
91.
92.
93.
94.
95.
96.
97.
98.

Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Section 105(a) Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Final%20September%20
2014%20Monthly%20Report%20to%20Congress.pdf, accessed 10/10/2014.
CBO, “Director’s Blog: Troubled Asset Relief Program,” 4/17/2009, www.cbo.gov/publication/24884, accessed 10/1/2014; OMB, “Analytical
Perspectives: Budget of the U.S. Government – Fiscal Year 2011,” 2/1/2010, www.gpoaccess.gov/usbudget/fy11/pdf/spec.pdf, accessed
10/1/2014.
OMB, “Analytical Perspectives, Budget of the United States Government, Fiscal Year 2015,” 3/4/2014, www.whitehouse.gov/sites/default/files/
omb/budget/fy2015/assets/topics.pdf, accessed 10/1/2014.
OMB, “Analytical Perspectives, Budget of the United States Government, Fiscal Year 2014,” 4/10/2013, www.whitehouse.gov/sites/default/files/
omb/budget/fy2014/assets/econ_analyses.pdf, accessed 10/1/2014.
OMB, “Analytical Perspectives, Budget of the United States Government, Fiscal Year 2015,” 3/4/2014, www.whitehouse.gov/sites/default/files/
omb/budget/fy2015/assets/topics.pdf, accessed 10/1/2014.
CBO, “Report on the Troubled Asset Relief Program—April 2014,” www.cbo.gov/sites/default/files/cbofiles/attachments/45260-TARP.
pdf, accessed 10/1/2014; CBO, “Report on the Troubled Asset Relief Program—May 2013,” www.cbo.gov/sites/default/files/cbofiles/
attachments/44256_TARP.pdf, accessed 10/1/2014.
Treasury, “Office of Financial Stability – Troubled Asset Relief Program Agency Financial Report Fiscal Year 2013,” 12/11/2013, www.treasury.
gov/initiatives/financial-stability/reports/Documents/AFR_FY2013_TARP-12-11-13_Final.pdf, accessed 10/1/2014.
Treasury, “Office of Financial Stability – Troubled Asset Relief Program Agency Financial Report Fiscal Year 2013,”12/11/2013, www.treasury.
gov/initiatives/financial-stability/reports/Documents/AFR_FY2013_TARP-12-11-13_Final.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury Press Release, “Relief for Responsible Homeowners One Step Closer Under New Treasury Guidelines,” 3/4/2009, www.treasury.gov/
press-center/press-releases/Pages/tg48.aspx, accessed 10/1/2014.
Treasury, “Office of Financial Stability, Agency Financial Report —Troubled Asset Relief Program, Fiscal Year 2013,” 12/11/2013, www.treasury.
gov/initiatives/financial-stability/reports/Documents/AFR_FY2013_TARP-12-11-13_Final.pdf, accessed 10/1/2014.
Treasury, “Home Affordable Modification Program — Programs,” no date, www.hmpadmin.com/portal/programs/index.jsp, accessed 10/1/2014;
Treasury, “Principal Reduction Alternative (PRA),” no date, www.makinghomeaffordable.gov/programs/lower-payments/Pages/pra.aspx, accessed
10/1/2014; Treasury, “Treasury Announces Home Price Decline Protection Incentives,” 7/31/2009, www.hmpadmin.com/portal/news/docs/2009/
hpdprelease073109.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
SIGTARP, “Quarterly Report to Congress,” 7/30/2014; www.sigtarp.gov/Quarterly%20Reports/July_30_2014_Report_to_Congress.pdf, accessed
10/8/2014; Treasury, “HAMP 1MP: Program Volumes - Program Type & Payor by Tier - September 2014,” accessed 10/21/2014.
The White House, “President Obama Announces Help for Hardest Hit Housing Markets,” 2/19/2010, www.whitehouse.gov/the-press-office/
president-obama-announces-help-hardest-hit-housing-markets, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, briefing to SIGTARP and other Federal agency staff, 3/8/2013; Treasury, “AMENDMENT NO.1 TO FACILITY PURCHASE
AGREEMENT,” 3/4/2013, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/mha/Documents_Contracts_Agreements/
Citi%20Amendment%201%20to%20Facility%20Purchase%20Agreement.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Emergency Economic Stabilization Act of 2008, P.L. 110-343, 10/3/2008, p. 3.
Treasury, “Factsheet on Capital Purchase Program,” 3/17/2009, www.treasury.gov/initiatives/financial-stability/programs/investment-programs/
cpp/Pages/capitalpurchaseprogram.aspx, accessed 10/1/2014.
Treasury, “Investment Programs, Capital Purchase Program, Key Information,” 3/17/2009, www.treasury.gov/initiatives/financial-stability/
programs/investment-programs/cpp/Pages/capitalpurchaseprogram.aspx, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

99.

100.

101.
102.
103.
104.
105.
106.
107.
108.
109.
110.
111.
112.
113.
114.
115.
116.
117.
118.
119.
120.

121.
122.
123.
124.
125.
126.
127.

128.

129.

reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Section 105(a) Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Final%20September%20
2014%20Monthly%20Report%20to%20Congress.pdf, accessed 10/10/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/
initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed
10/2/2014.
Treasury, Section 105(a) Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Final%20September%20
2014%20Monthly%20Report%20to%20Congress.pdf, accessed 10/10/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/
initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed
10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP draft report, 10/8/2010.
Treasury, “Community Development Capital Initiative,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/bankinvestment-programs/cdci/Pages/Overview.aspx, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/11/2014.
Treasury, “Programs,” 5/7/2009, www.treasury.gov/initiatives/financial-stability/programs/Other%20Programs/AIG/Pages/default.aspx, accessed
10/1/2014.
Treasury, Treasury Notes, “Infographic: Overall $182 Billion Committed to Stabilize AIG During the Financial Crisis is Now Fully Recovered,”
9/11/2012, www.treasury.gov/connect/blog/Pages/aig-182-billion.aspx, accessed 10/1/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/1/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/1/2014.
Treasury Press Release, “Financial Stability Oversight Council Makes First Nonbank Financial Company Designations to Address Potential
Threats to Financial Stability,” 7/9/2013, www.treasury.gov/press-center/press-releases/Pages/jl2004.aspx, accessed 10/1/2014.
Treasury, “Agency Financial Report: Fiscal Year 2009,” 12/10/2009, www.treasury.gov/about/organizational-structure/offices/Mgt/Documents/
OFS%20AFR%2009_24.pdf, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, “Agency Financial Report: Fiscal Year 2009,” 12/10/2009, www.treasury.gov/about/organizational-structure/offices/Mgt/Documents/
OFS%20AFR%2009_24.pdf, accessed 10/1/2014.
Treasury Press Release, “U.S. Government Finalizes Terms of Citi Guarantee Announced in November,” 1/16/2009, www.treasury.gov/presscenter/press-releases/Pages/hp1358.aspx, accessed 10/1/2014.
U.S. Senate, “Report Pursuant to Section 129 of the Emergency Economic Stabilization Act of 2008: Authorization to Provide Residual
Financing to Citigroup, Inc. For a Designated Asset Pool,” 11/23/2008, www.banking.senate.gov/public/_files/Sec129ReportCitigroupDec12008.
pdf, accessed 10/1/2014.
Treasury, “Treasury Prices Sale of Citigroup Subordinated Notes for Proceeds of $894 Million, Providing an Additional Profit for Taxpayers on
TARP Citigroup Investment,” 2/5/2013, www.treasury.gov/press-center/press-releases/Pages/tg1841.aspx, accessed 10/1/2014.
Treasury, “Treasury Prices Sale of Citigroup Subordinated Notes for Proceeds of $894 Million, Providing an Additional Profit for Taxpayers on
TARP Citigroup Investment,” 2/5/2013, www.treasury.gov/press-center/press-releases/Pages/tg1841.aspx, accessed 10/1/2014.
Treasury, “Guidelines for Automotive Industry Financing Program,” no date, www.treasury.gov/initiatives/financial-stability/programs/Other%20
Programs/aifp/Documents_Contracts_Agreements/AIFP_guidelines.pdf, accessed 10/1/2014.
Treasury, “Guidelines for Automotive Industry Financing Program,” no date, www.treasury.gov/initiatives/financial-stability/programs/Other%20
Programs/aifp/Documents_Contracts_Agreements/AIFP_guidelines.pdf, accessed 10/1/2014.
Treasury Press Release, “Taxpayers Recover $245.5 Million from Second Ally Trading Plan,” 10/17/2014, www.treasury.gov/press-center/pressreleases/Pages/jl2668.aspx, accessed on 10/20/2014.
SIGTARP calculation based on Treasury Press release of 10/17/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury Press Release, “Taxpayers to Receive $3.0 Billion from Sale
of Ally Financial Common Stock,” 1/16/2014, www.treasury.gov/press-center/press-releases/Pages/jjl2258.aspx, accessed 10/1/2014.
Treasury response to SIGTARP data call, 10/6/2014; Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/Daily_TARP_Update%20-%2010.01.2014.pdf, accessed 10/1/2014; Treasury, “Office of Financial Stability – Troubled Asset
Relief Program Agency Financial Report Fiscal Year 2013,” 12/11/2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/
AFR_FY2013_TARP-12-11-13_Final.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/

373

374

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

130.
131.

132.
133.
134.
135.
136.

137.
138.

139.
140.
141.
142.
143.
144.
145.
146.
147.
148.

149.
150.

151.
152.
153.
154.
155.
156.
157.
158.
159.
160.

reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, Daily
TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%2010.01.2014.pdf,
accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/11/2014; Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financialstability/reports/Documents/Daily_TARP_Update%20-%2010.01.2014.pdf, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Blog Posting, “Taxpayers Are One Step Closer to Exiting Ally,” www.treasury.gov/connect/blog/Pages/Taxpayers-are-One-Step-Closerto-Exiting-Ally.aspx, accessed 10/1/2014; Ally Financial Press Release, “Ally Announces Private Placement of Common Stock and Plan to
Repurchase Securities from U.S. Treasury,” 8/20/2013, media.ally.com/2013-08-20-Ally-Announces-Private-Placement-of-Common-Stock-andPlan-to-Repurchase-Securities-from-U-S-Treasury, accessed 10/1/2014.
Treasury, Daily TARP Update, 1/2/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
1.2.2014.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financialstability/reports/Documents/Daily_TARP_Update%20-%2010.01.2014.pdf, accessed 10/1/2014.
Treasury Press Release, “Taxpayers to Recover $2.375 Billion from Ally Initial Public Offering,” 4/10/2014, www.treasury.gov/press-center/pressreleases/Pages/jl2351.aspx, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury Press Release, “Treasury Exits Investment in Chrysler Group LLC,” 7/21/2011, www.treasury.gov/press-center/press-releases/Pages/
tg1253.aspx, accessed 10/1/2014.
Treasury, Section 105(a) Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Final%20September%20
2014%20Monthly%20Report%20to%20Congress.pdf, accessed 10/10/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Federal Reserve Press Release, untitled, 11/25/2008, www.federalreserve.gov/newsevents/press/monetary/20081125a.htm, accessed 10/1/2014.
FRBNY, “Term Asset-Backed Securities Loan Facility: CMBS,” no date, www.newyorkfed.org/markets/cmbs_operations.html, accessed
10/1/2014.
FRBNY, “Term Asset-Backed Securities Loan Facility: non-CMBS,” no date, www.newyorkfed.org/markets/talf_operations.html, accessed
10/1/2014; FRBNY, “Term Asset-Backed Securities Loan Facility: non-CMBS, Recent Operations,” no date, www.newyorkfed.org/markets/
TALF_recent_operations.html, accessed 10/1/2014; FRBNY, “Term Asset-Backed Securities Loan Facility: CMBS,” no date, www.newyorkfed.
org/markets/cmbs_operations.html, accessed 10/1/2014; FRBNY, “Term Asset-Backed Securities Loan Facility: CMBS, Recent Operations,” no
date, www.newyorkfed.org/markets/CMBS_recent_operations.html, accessed 10/1/2014; FRBNY, response to SIGTARP data call, 10/6/2014.
FRBNY, response to SIGTARP data call, 10/9/2014.
Treasury Press Release, “Treasury Announces Full Repayment with Interest for Investment Through TALF Financial Crisis Response Program
Designed to Unlock Credit for Consumers, Businesses,” 1/15/2013, www.treasury.gov/press-center/press-releases/Pages/tg1821.aspx, accessed
10/1/2014.
FRBNY, response to SIGTARP data call, 10/9/2014.
Treasury Press Release, “Treasury Department Releases Details on Public Private Partnership Investment Program,” 3/23/2009, www.treasury.
gov/press-center/press-releases/Pages/tg65.aspx, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury Press Release, “Unlocking Credit for Small Businesses Fact Sheet,” 3/16/2009, www.treasury.gov/press-center/press-releases/Pages/
tg58.aspx, accessed 10/1/2014.
Treasury Press Release, “Treasury Completes Wind Down of TARP Small Business Program, Realizes $8 Million Gain for Taxpayers,”1/25/2012,
www.treasury.gov/press-center/press-releases/Pages/tg1398.aspx, accessed 10/1/2014.
Obama, Barack, “Remarks by the President on the Home Mortgage Crisis,” 2/18/2009, www.whitehouse.gov/the_press_office/Remarks-by-thePresident-on-the-mortgage-crisis/, accessed 10/1/2014.
Treasury Press Release, “Homeowner Affordability and Stability Plan: Executive Summary,” 2/18/2009, www.treasury.gov/press-center/pressreleases/Pages/tg33.aspx, accessed 10/1/2014.
Treasury, “Home Affordable Modification Program: Overview,” no date, www.hmpadmin.com/portal/programs/hamp.jsp, accessed 8/20/2010.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

161.
162.
163.
164.
165.

166.
167.
168.
169.
170.
171.
172.
173.
174.
175.
176.
177.
178.
179.
180.
181.
182.
183.

184.
185.
186.
187.
188.

portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury Press Release: “Secretary Lew Unveils New Efforts to Assist Struggling and Prospective Homeowners, Provide More Affordable
Options for Renters,” 6/26/2014, www.treasury.gov/press-center/press-releases/Pages/jl2444.aspx, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 6/25/2013.
Congressional Budget Office, “Report on the Troubled Asset Relief Program,” 3/2010, www.cbo.gov/sites/default/files/cbofiles/ftpdocs/112xx/
doc11227/03-17-tarp.pdf, accessed 10/1/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/8/2014; Treasury, Transactions Report-Housing Programs, 9/29/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/Housing%20Transactions%20Report%20as%20of%2009.29.2014.pdf, accessed 10/8/2014.
Treasury, “Home Affordable Modification Program: Overview,” no date, www.hmpadmin.com/portal/programs/hamp.jsp, accessed 10/1/2014.
Treasury, “Office of Financial Stability Agency Financial Report — Fiscal Year 2010,” 11/15/2010, www.treasury.gov/initiatives/financial-stability/
briefing-room/reports/agency_reports/Documents/2010%20OFS%20AFR%20Nov%2015.pdf, accessed 10/1/2014.
Treasury, “HAMP 1MP: Program Volumes - Program Type & Payor by Tier - September 2014,” accessed 10/21/2014.
Fannie Mae, response to SIGTARP vetting draft, 10/6/2010.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, “Secretaries Geithner, Donovan Announce New Details of Making Home Affordable Program, Highlight Implementation Progress,”
5/14/2009, www.treasury.gov/press-center/press-releases/Pages/tg131.aspx, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Home Affordable Unemployment Program NON GSE Forbearance Plans Worksheet – August 2014,” accessed 10/21/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “HAMP 1MP: Program Volumes - Program Type & Payor by Tier - September 2014,” accessed 10/21/2014.
Treasury, “Home Affordable Foreclosure Alternatives Program: Overview,” no date, www.hmpadmin.com/portal/programs/foreclosure_
alternatives.jsp, accessed 10/1/2014.
Treasury, “HAFA Program Inventory – Program Type – September 2014,” accessed 10/23/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, “2MP Program Inventory – Program Type by Payor – September 2014,” accessed 10/23/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014; Department of Veterans Affairs, “Revised VA Making Home
Affordable Program, Circular 26-10-6,” 7/5/2012, www.benefits.va.gov/HOMELOANS/circulars/26_10_6_change1.pdf, accessed 10/1/2014.
VA, response to SIGTARP data call, 10/23/2014; Treasury, “FHA & RD HAMP Trial Starts – Program Summary – September 2014,” accessed
10/23/2014.
Treasury, “Office of Financial Stability Agency Financial Report — Fiscal Year 2010,” 11/15/2010, www.treasury.gov/initiatives/financial-stability/
briefing-room/reports/agency_reports/Documents/2010%20OFS%20AFR%20Nov%2015.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, “Office of Financial Stability Agency Financial Report — Fiscal Year 2010,” 11/15/2010, www.treasury.gov/initiatives/financial-stability/
briefing-room/reports/agency_reports/Documents/2010%20OFS%20AFR%20Nov%2015.pdf, accessed 10/1/2014.
Treasury, responses to SIGTARP data call, 10/6/2014; Treasury, “HFA Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/
initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014; Alabama
Housing Finance Authority, “Hardest Hit Alabama, Treasury Reports,” no date, www.hardesthitalabama.com/resources/treasury_reporting.
aspx, accessed 10/1/2014; Arizona (Home) Foreclosure Prevention Funding Corporation, “Hardest Hit Fund Reporting [quarterly performance
reports],” no date, www.azhousing.gov/ShowPage.aspx?ID=405&CID=11, accessed 10/1/2014; CalHFA Mortgage Assistance Corporation, “Keep
Your Home California, Reports & Statistics, Quarterly Reports,” no date, keepyourhomecalifornia.org/quarterly-reports/, accessed 10/1/2014;
Florida Housing Finance Corporation, “Florida Hardest Hit Fund (HHF) Information, Quarterly Reports,” no date, apps.floridahousing.org/
StandAlone/FHFC_ECM/ContentPage.aspx?PAGE=0277, accessed 10/1/2014; GHFA Affordable Housing Inc., “HomeSafe Georgia, US
Treasury Reports,” no date, www.dca.state.ga.us/housing/homeownership/programs/treasuryReports.asp, accessed 10/1/2014; Illinois Housing
Development Authority, “Illinois Hardest Hit Program, Reporting,” no date, www.illinoishardesthit.org/spv-7.aspx, accessed 10/1/2014;
Indiana Housing and Community Development Authority, “Indiana’s Hardest Hit Fund, Quarterly Reports to the U.S. Treasury,” no date,
www.877gethope.org/reports/, accessed 10/1/2014; Kentucky Housing Corporation, “American Recovery and Reinvestment Act and Troubled
Asset Relief Program, Kentucky Unemployment Bridge Program [quarterly reports],” no date, www.kyhousing.org/page.aspx?id=3165, accessed
10/1/2014; Michigan Homeowner Assistance Nonprofit Housing Corporation, “Hardest Hit U.S. Treasury Reports,” no date, www.michigan.
gov/mshda/0,4641,7-141-45866_62889_47905-250571--,00.html, accessed 10/1/2014; Mississippi Home Corporation, “Financial Disclosures,
Hardest Hit Fund, HFA Performance Data Report[s],” no date, www.mshomecorp.com/about%20mhc/disclosures.htm, accessed 10/1/2014;
Nevada Affordable Housing Assistance Corporation, “Nevada Hardest Hit Fund, US Treasury Reports,” no date, nevadahardesthitfund.
nv.gov/, accessed 10/1/2014; New Jersey Housing and Mortgage Finance Agency, “The New Jersey HomeKeeper Program, About the Program,
Performance Reports,” no date, www.njhomekeeper.com/spv-55.aspx, accessed 10/1/2014; North Carolina Housing Finance Agency, “Hardest
Hit Fund™ & Performance Reporting, …Quarterly Reports,” no date, www.ncforeclosureprevention.gov/hardest_hit_funds.aspx, accessed
10/1/2014; Ohio Homeowner Assistance LLC, “Save the Dream Ohio: Quarterly Reports,” ohiohome.org/savethedream/quarterlyreports.aspx,
accessed 10/1/2014; Oregon Affordable Housing Assistance Corporation, “Oregon Homeownership Stabilization Initiative, Reporting,” no
date, www.oregonhomeownerhelp.org/en/reporting, accessed 10/1/2014; Rhode Island Housing and Mortgage Finance Corporation, “Hardest

375

376

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

189.

190.
191.
192.
193.
194.
195.

196.

197.
198.
199.
200.
201.
202.
203.

204.

205.
206.
207.

208.
209.
210.
211.
212.
213.
214.
215.
216.
217.

218.
219.

Hit Fund – Rhode Island, About HHFRI, REPORTS,” no date, www.hhfri.org/HHFRI_Dynamic_Content.aspx?id=10737418256&ekmense
l=c580fa7b_10737418238_10737418240_btnlink, accessed 10/1/2014; SC Housing Corp, “SC HELP, Reports,” no date, www.schelp.gov/
Resources/Reports.aspx, accessed 10/1/2014; Tennessee Housing Development Agency, “Keep My Tennessee Home, Reports,” no date, www.
keepmytnhome.org/news-and-reports/, accessed 10/1/2014; District of Columbia Housing Finance Agency, “HomeSaver – A Foreclosure
Prevention Program[quarterly performance reports],” www.dchfa.org/DCHFAHome/Homebuyers/ForeclosurePrevention/QuarterlyReports/
tabid/219/Default.aspx, accessed 10/1/2014; SIGTARP analysis of HFA quarterly performance reports.
Treasury, briefing to SIGTARP and other Federal agency staff, 3/8/2013; Treasury, “AMENDMENT NO.1 TO FACILITY PURCHASE
AGREEMENT,” 3/4/2013, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/mha/Documents_Contracts_Agreements/
Citi%20Amendment%201%20to%20Facility%20Purchase%20Agreement.pdf, accessed 10/8/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/8/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/8/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report-Housing Programs, 9/29/2014, www.treasury.gov/initiatives/
financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2009.29.2014.pdf, accessed 10/8/2014.
Treasury, responses to SIGTARP data calls, 7/8/2014 and, 10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013, 10/3/2013, 10/17/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA
Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20
Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014.
Treasury, Daily TARP Update, 10/1/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Daily_TARP_Update%20-%20
10.01.2014.pdf, accessed 10/8/2014; Treasury, Daily TARP Update, 4/1/2013, www.treasury.gov/initiatives/financial-stability/reports/Documents/
Daily%20TARP%20Update%20-%2004%2001%202013.pdf, accessed 10/1/2014; Treasury, briefing to SIGTARP and other Federal agency
staff, 3/8/2013; Treasury, “AMENDMENT NO.1 TO FACILITY PURCHASE AGREEMENT,” 3/4/2013, www.treasury.gov/initiatives/financialstability/TARP-Programs/housing/mha/Documents_Contracts_Agreements/Citi%20Amendment%201%20to%20Facility%20Purchase%20
Agreement.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
SIGTARP, “Quarterly Report to Congress,” 10/26/2010, www.sigtarp.gov/Quarterly%20Reports/October2010_Quarterly_Report_to_Congress.
pdf, accessed 10/1/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, responses to SIGTARP data call 10/6/2014; Treasury, “HAMP 1MP: Program Volumes - Program Type & Payor by Tier - September
2014,” accessed 10/21/2014.
Treasury, Transactions Report-Housing Programs, 9/29/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2009.29.2014.pdf, accessed 10/8/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report-Housing Programs, 9/29/2014, www.treasury.gov/initiatives/
financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2009.29.2014.pdf, accessed 10/8/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013, 10/3/2013, 10/17/2013, 1/17/2014, 4/9/2014 7/8/2014, and 10/6/2014; Treasury, “HFA
Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20
Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014.
Treasury, briefing to SIGTARP and other Federal agency staff, 3/8/2013; Treasury, “AMENDMENT NO.1 TO FACILITY PURCHASE
AGREEMENT,” 3/4/2013, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/mha/Documents_Contracts_Agreements/
Citi%20Amendment%201%20to%20Facility%20Purchase%20Agreement.pdf, accessed 10/1/2014.
Treasury, responses to SIGTARP data calls, 10/6/2014 and 10/10/2014.
Treasury, HAMP (UP) Tables, August 2014, accessed 10/16/2014.
Borrowers who were in a UP plan as of October 1, 2011 were required to be considered for a mandatory extension of forbearance to an
aggregate total minimum of 12 months. Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version
4.4,” Chapter III: UP, 3/3/2014, www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/17/2014;
Treasury, “Program Guidance,” www.hmpadmin.com/portal/programs/guidance.jsp, accessed 10/17/2014; SIGTARP Letter to Treasury, “The
Proposed Unemployed Forbearance May Not Be of Sufficient Duration,” April 20, 2010.
Treasury, HAMP (UP) Tables, August 2014, accessed 10/16/2014.
Treasury, HAMP (UP) Tables, August 2014, accessed 10/16/2014.
Treasury, HAMP (UP) Tables, August 2014, accessed 10/16/2014.
Treasury, HAMP (UP) Tables, August 2014, accessed 10/16/2014.
Treasury, HAMP (UP) Tables, August 2014, accessed 10/16/2014.
Treasury, HAMP (UP) Tables, August 2014, accessed 10/16/2014.
Treasury, “Home Affordable Modification Program: Overview,” no date, www.hmpadmin.com/portal/programs/hamp.jsp, accessed 8/20/2010.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “HAMP 1MP: Program Volumes - Program Type & Payor by Tier - September 2014,” accessed 10/21/2014; Treasury, “HAMP
1MP Modification Statistics - All Active Permanent Modifications: Modification Characteristics by Occupancy- September 2014,” accessed
10/22/2014.
SIGTARP, “Quarterly Report to Congress,” 7/30/2014; www.sigtarp.gov/Quarterly%20Reports/July_30_2014_Report_to_Congress.pdf, accessed
10/8/2014; Treasury, “HAMP 1MP Program Volumes – Program Type and Payor by Tier – September 2014,” accessed 10/21/2014.
SIGTARP, “Quarterly Report to Congress,” 7/30/2014; www.sigtarp.gov/Quarterly%20Reports/July_30_2014_Report_to_Congress.pdf, accessed
10/8/2014; Treasury, “HAMP 1MP Program Volumes – Program Type and Payor by Tier – September 2014,” accessed 10/21/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

220.
221.
222.
223.
224.
225.
226.
227.
228.
229.
230.
231.
232.
233.
234.
235.
236.
237.

238.
239.
240.
241.
242.
243.
244.
245.
246.
247.
248.
249.
250.
251.
252.
253.
254.
255.
256.
257.
258.
259.
260.
261.
262.

Treasury, “Home Affordable Modification Program: Overview,” no date, www.hmpadmin.com/portal/programs/hamp.jsp, accessed 10/1/2014;
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Freddie Mac, “Primary Mortgage Market Survey Archives,” www.freddiemac.com/pmms/pmms_archives.html, accessed 10/1/2014; SIGTARP
analysis of Treasury HAMP data.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
SIGTARP analysis of Treasury HAMP data.
Treasury, “HAMP 1MP Program Volumes – Program Type and Payor by Tier – September 2014,” accessed 10/21/2014; OCC, “Mortgage
Metrics Report, Second Quarter 2014,” June 2014, www.occ.gov/publications/publications-by-type/other-publications-reports/mortgagemetrics-2014/mortgage-metrics-q2-2014.pdf, accessed 10/10/2014; In its “Mortgage Metrics Report, Second Quarter 2014,” OCC compared a
snapshot of HAMP permanent modifications and private modifications, from the first quarter of 2013 through the first quarter of 2014, between
three and 15 months after the modifications became effective, and 60 or more days late on payments.
Treasury, response to SIGTARP data call, 10/10/2014; Treasury, “HAMP 1MP Program Volumes – Program Type and Payor by Tier – September
2014,” accessed 10/21/2014.
Treasury, “HAMP 1MP: Program Volumes Supplemental - Current Delinquency Status - September 2014,” accessed 10/23/2014.
Treasury, HAMP Redefault Tables 1-16 - September 2014 - Delinquency Status by Vintage - September 2014,” accessed 10/23/2014.
Treasury, HAMP Redefault Tables 1-16 - September 2014 - Delinquency Status by Vintage - September 2014,” accessed 10/23/2014.
Treasury, response to SIGTARP data call 10/22/2014.
“SIGTARP, “Quarterly Report to Congress,” 7/30/2014; www.sigtarp.gov/Quarterly%20Reports/July_30_2014_Report_to_Congress.pdf, accessed
10/8/2014; Treasury, “HAMP 1MP Program Volumes – Program Type and Payor by Tier – September 2014,” accessed 10/21/2014.
Fannie Mae, response to SIGTARP data call 10/22/2014.
Treasury, “HAMP 1MP: Program Volumes - Combined Tier 1/Tier 2: Top 25 HAMP Servicers – September 2014,” accessed 10/21/2014.
Treasury, “HAMP 1MP: Program Volumes - Combined Tier 1/Tier 2: Top 25 HAMP Servicers – September 2014,” accessed 10/21/2014.
Treasury, response to SIGTARP data call 10/10/2014; Treasury, “HAMP 1MP Program Volumes – Program Type and Payor by Tier – September
2014,” accessed 10/21/2014.
Treasury, response to SIGTARP data call 10/10/2014; Treasury, “HAMP 1MP Program Volumes – Program Type and Payor by Tier – September
2014,” accessed 10/21/2014
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, “HAMP 1MP: Program Volumes Supplemental - Tier 1: State - September 2014,” accessed 10/23/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.

377

378

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

263.
264.
265.
266.
267.
268.
269.
270.
271.
272.
273.
274.
275.
276.
277.
278.
279.
280.
281.
282.
283.
284.
285.
286.
287.
288.
289.
290.
291.
292.
293.
294.
295.
296.
297.
298.
299.
300.
301.

Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
SIGTARP, “Factors Affecting Implementation of the Home Affordable Modification Program,” 3/25/2010, www.sigtarp.gov/Audit%20Reports/
Factors_Affecting_Implementation_of_the_Home_Affordable_Modification_Program.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “HAMP 1MP Conversion Metrics - Conversion Rate by Servicer - Program to Date – September 2014,” accessed 10/21/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
SIGTARP, “Factors Affecting Implementation of the Home Affordable Modification Program,” 3/25/2010, www.sigtarp.gov/Audit%20Reports/
Factors_Affecting_Implementation_of_the_Home_Affordable_Modification_Program.pdf, accessed 10/1/2014.
SIGTARP, “Factors Affecting Implementation of the Home Affordable Modification Program,” 3/25/2010, www.sigtarp.gov/Audit%20Reports/
Factors_Affecting_Implementation_of_the_Home_Affordable_Modification_Program.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Supplemental Directive 13-08, Making Home Affordable Program – Borrower Post-Modification Counseling and Servicer Incentives,”
9/30/2013, www.hmpadmin.com/portal/programs/docs/hamp_servicer/sd1308.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report-Housing Programs, 9/29/2014, www.treasury.gov/initiatives/
financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2009.29.2014.pdf, accessed 10/8/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Expanding our efforts to help more homeowners and strengthen hard-hit communities,” 1/27/2012, www.treasury.gov/connect/blog/
Pages/Expanding-our-efforts-to-help-more-homeowners-and-strengthen-hard-hit-communities.aspx, accessed 10/10/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “HAMP 1MP Program Volumes – Tier 1 Activity on Tier 2 Trial Starts– September 2014,” accessed 10/21/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 11/2/2012.
Treasury, “HAMP 1MP Program Volumes – Tier 2 Property Type – September 2014,” accessed 10/21/2014.
Treasury, “HAMP 1MP Program Volumes – Tier 2 Property Type – September 2014,” accessed 10/21/2014.
Treasury, “HAMP 1MP Program Volumes – Tier 2 Property Type – September 2014,” accessed 10/21/2014.
Treasury, “HAMP 1MP Program Volumes – Tier 2 Property Type – September 2014,” accessed 10/21/2014.
Treasury, “HAMP 1MP Program Volumes – Tier 2 Property Type – September 2014,” accessed 10/21/2014.
Treasury, “HAMP 1MP Program Volumes – Tier 2 Property Type – September 2014,” accessed 10/21/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Supplemental Directive 14-02, Making Home Affordable Program – Administrative Clarifications,” 4/22/2014, www.hmpadmin.com/

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

302.
303.
304.
305.

306.

307.

308.

309.
310.
311.
312.

313.

314.

315.

316.

portal/programs/docs/hamp_servicer/sd1402.pdf, accessed 10/9/2014;Treasury, “Making Home Affordable Program Handbook for Servicers
of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed
10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014.
Treasury, “MEMORANDUM OF AGREEMENT Between the U.S. Department of the Treasury and NeighborWorks America,” 2/14/2013,
www.treasury.gov/initiatives/financial-stability/Documents/NeighborWorks%20America%20Memorandum%20of%20Agreement.pdf, accessed
10/1/2014.
Treasury, “MEMORANDUM OF AGREEMENT Between the U.S. Department of the Treasury and NeighborWorks America,” 2/14/2013,
www.treasury.gov/initiatives/financial-stability/Documents/NeighborWorks%20America%20Memorandum%20of%20Agreement.pdf, accessed
10/1/2014.
Treasury, “Making Home Affordable Program Handbook for Servicers of Non-GSE Mortgages, Version 4.4,” 3/3/2014, www.hmpadmin.com/
portal/programs/docs/hamp_servicer/mhahandbook_44.pdf, accessed 10/1/2014; NeighborWorks, “Making Home Affordable Outreach and
Intake Project Funding Announcement, Revised,” 3/7/2013, www.neighborworks.org/Documents/HomeandFinance_Docs/Foreclosure_Docs/
ModificationAssistance_Docs/MHAOutreachandIntakeProjectFundingAnnouncementRevi.aspx, accessed 10/2/2014; NeighborWorks, “Making
Home Affordable Outreach and Intake Project Eligible Applicant Briefing for NeighborWorks Organizations,” 3/6/2013.
Treasury, “MEMORANDUM OF AGREEMENT Between the U.S. Department of the Treasury and NeighborWorks America,” 2/14/2013,
www.treasury.gov/initiatives/financial-stability/Documents/NeighborWorks%20America%20Memorandum%20of%20Agreement.pdf, accessed
10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
The White House, “Help for the Hardest Hit Housing Markets,” 2/19/2010, www.whitehouse.gov/the-press-office/help-hardest-hit-housingmarkets, accessed 10/2/2014; Treasury, “White House: Help for the Hardest Hit Housing Markets,” 2/19/2010, www.makinghomeaffordable.
gov/about-mha/latest-news/Pages/pr_02192010.aspx, accessed 10/2/2014.
The White House, “Help for the Hardest Hit Housing Markets,” 2/19/2010, www.whitehouse.gov/the-press-office/help-hardest-hit-housingmarkets, accessed 10/2/2014; Treasury, “White House: Help for the Hardest Hit Housing Markets,” 2/19/2010, www.makinghomeaffordable.
gov/about-mha/latest-news/Pages/pr_02192010.aspx, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 10/7/2013, 10/17/2013, 7/8/2014 and 10/8/2014; The White House, “Help for the Hardest Hit
Housing Markets,” 2/19/2010, www.whitehouse.gov/the-press-office/help-hardest-hit-housing-markets, accessed 10/2/2014; www.treasury.gov/
initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; Treasury, “White House: Help
for the Hardest Hit Housing Markets,” 2/19/2010, www.makinghomeaffordable.gov/about-mha/latest-news/Pages/pr_02192010.aspx, accessed
10/2/2014; Treasury, “Hardest Hit Fund Program Guidelines Round 1,” 2/19/2010, www.treasury.gov/initiatives/financial-stability/TARPPrograms/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; Treasury, “Update on HFA Hardest-Hit Fund,” 3/5/2010, www.
makinghomeaffordable.gov/about-mha/latest-news/Pages/pr_03052010.aspx, accessed 10/2/2014; Treasury, “HFA Hardest-Hit Fund Frequently
Asked Questions,” 3/5/3010, www.makinghomeaffordable.gov/programs/Documents/HFA%20FAQ%20--%20030510%20FINAL%20(Clean).pdf,
accessed 10/2/2014; Treasury, “Administration Announces Second Round of Assistance for Hardest-Hit Housing Markets,” 3/29/2010, www.
treasury.gov/press-center/press-releases/Pages/tg618.aspx, accessed 10/2/2014; Treasury, “Hardest Hit Fund Program Guidelines Round 2,”
3/29/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014;
Treasury, “Obama Administration Announces Additional Support for Targeted Foreclosure-Prevention Programs to Help Homeowners Struggling
with Unemployment,” 8/11/2010, www.treasury.gov/press-center/press-releases/Pages/tg1042.aspx, accessed 10/2/2014; Treasury, “Hardest Hit
Fund Program Guidelines Round 3,” 8/11/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20
Proposal%20Guidelines%20Third%20Funding%20FINAL.pdf, accessed 10/2/2014; Treasury, “Obama Administration Approves State Plans for
Use of $1.5 Billion in ‘Hardest Hit Fund’ Foreclosure-Prevention Funding,” 6/23/2010, www.treasury.gov/press-center/press-releases/Pages/
tg757.aspx, accessed 10/2/2014; Treasury, “Obama Administration Approves State Plans For $600 million of ‘Hardest Hit Fund’ Foreclosure
Prevention Assistance,” 8/4/2010, www.treasury.gov/press-center/press-releases/Pages/tg813.aspx, accessed 10/2/2014; Treasury, Transactions
Report, 9/29/2010, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-1-10%20Transactions%20Report%20as%20of%20
9-29-10.pdf, accessed 10/2/2014; Treasury, “HFA Hardest-Hit Fund Program Summary,” 11/3/2010, www.ncsha.org/system/files/resources/
Treas_Overview_11.03.10.pdf, accessed 10/2/2014.
Treasury, “HFA Hardest-Hit Fund Frequently Asked Questions,” 3/5/3010, www.makinghomeaffordable.gov/programs/Documents/HFA%20
FAQ%20--%20030510%20FINAL%20(Clean).pdf, accessed 10/2/2014; Treasury, “Administration Announces Second Round of Assistance
for Hardest-Hit Housing Markets,” 3/29/2010, www.treasury.gov/press-center/press-releases/Pages/tg618.aspx, accessed 10/2/2014; Treasury,
“Obama Administration Announces Additional Support for Targeted Foreclosure-Prevention Programs to Help Homeowners Struggling with
Unemployment,” 8/11/2010, www.treasury.gov/press-center/press-releases/Pages/tg1042.aspx, accessed 10/2/2014; Treasury, Transactions Report,
9/29/2010, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-1-10%20Transactions%20Report%20as%20of%209-29-10.pdf,
accessed 10/2/2014.
Treasury, “Hardest Hit Fund Program Guidelines Round 1,” 2/19/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/
housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; Treasury, “Update on HFA Hardest-Hit Fund,” 3/5/2010, www.
makinghomeaffordable.gov/about-mha/latest-news/Pages/pr_03052010.aspx, accessed 10/2/2014; Treasury, “Hardest Hit Fund Program
Guidelines Round 2,” 3/29/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx,
accessed 10/2/2014; Treasury, “Hardest Hit Fund Program Guidelines Round 3,” 8/11/2010, www.treasury.gov/initiatives/financial-stability/
TARP-Programs/housing/Documents/HFA%20Proposal%20Guidelines%20Third%20Funding%20FINAL.pdf, accessed 10/2/2014; Treasury,

379

380

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

317.

318.
319.
320.
321.
322.

323.

324.
325.
326.

327.
328.
329.

330.

331.

332.
333.

334.

335.

“Obama Administration Approves State Plans for Use of $1.5 Billion in ‘Hardest Hit Fund’ Foreclosure-Prevention Funding,” 6/23/2010, www.
treasury.gov/press-center/press-releases/Pages/tg757.aspx, accessed 10/2/2014; Treasury, “Obama Administration Approves State Plans For
$600 million of ‘Hardest Hit Fund’ Foreclosure Prevention Assistance,” 8/4/2010, www.treasury.gov/press-center/press-releases/Pages/tg813.
aspx, accessed 10/2/2014; Treasury, “HFA Hardest-Hit Fund Program Summary,” 11/3/2010, www.ncsha.org/system/files/resources/Treas_
Overview_11.03.10.pdf, accessed 10/2/2014.
Treasury, “Hardest Hit Fund Program Guidelines Round 1,” 2/19/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/
housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; Treasury, “Update on HFA Hardest-Hit Fund,” 3/5/2010, www.
makinghomeaffordable.gov/about-mha/latest-news/Pages/pr_03052010.aspx, accessed 10/2/2014; Treasury, “Hardest Hit Fund Program
Guidelines Round 2,” 3/29/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx,
accessed 10/2/2014; Treasury, “Hardest Hit Fund Program Guidelines Round 3,” 8/11/2010, www.treasury.gov/initiatives/financial-stability/
TARP-Programs/housing/Documents/HFA%20Proposal%20Guidelines%20Third%20Funding%20FINAL.pdf, accessed 10/2/2014; Treasury,
“Obama Administration Approves State Plans for Use of $1.5 Billion in ‘Hardest Hit Fund’ Foreclosure-Prevention Funding,” 6/23/2010,
www.treasury.gov/press-center/press-releases/Pages/tg757.aspx, accessed 10/2/2014; Treasury, “Obama Administration Approves State Plans
For $600 million of ‘Hardest Hit Fund’ Foreclosure Prevention Assistance,” 8/4/2010, www.treasury.gov/press-center/press-releases/Pages/
tg813.aspx, accessed 10/2/2014; Treasury, “HFA Hardest-Hit Fund Program Summary,” 11/3/2010, www.ncsha.org/system/files/resources/
Treas_Overview_11.03.10.pdf, accessed 10/2/2014; Treasury, “Hardest Hit Fund, Archived Program Information, Participation Agreements,
Amendments, and Initial Program Guidelines,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/
Archival-information.aspx, accessed 10/2/2014; SIGTARP analysis of HFA participation agreements and amendments.
Treasury, “Obama Administration Approves State Plans for Use of $1.5 Billion in ‘Hardest Hit Fund’ Foreclosure-Prevention Funding,”
6/23/2010, www.treasury.gov/press-center/press-releases/Pages/tg757.aspx, accessed 10/2/2014.
Treasury, “Obama Administration Approves State Plans for Use of $1.5 Billion in ‘Hardest Hit Fund’ Foreclosure-Prevention Funding,”
6/23/2010, www.treasury.gov/press-center/press-releases/Pages/tg757.aspx, accessed 10/2/2014.
Treasury, “Administration Announces Second Round of Assistance for Hardest-Hit Housing Markets,” 3/29/2010, www.treasury.gov/presscenter/press-releases/Pages/tg618.aspx, accessed 10/2/2014.
National Council of State Housing Agencies, “Hardest Hit Foreclosure Initiative,” no date, www.ncsha.org/advocacy-issues/hardest-hitforeclosure-initiative, accessed 10/2/2014.
HUD, “Obama Administration Announces Additional Support for Targeted Foreclosure-Prevention Programs to Help Homeowners Struggling
with Unemployment,” 8/11/2010, portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2010/HUDNo.10-176, accessed
10/2/2014.
HUD, “Obama Administration Announces Additional Support for Targeted Foreclosure Prevention Programs to Help Homeowners Struggling
With Unemployment,” 8/11/2010, portal.hud.gov/hudportal/HUD?src=/press/press_releases_media_advisories/2010/HUDNo.10-176, accessed
10/2/2014.
Treasury, Transactions Report-Housing Programs, 12/27/2012, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2012.27.2012.pdf, accessed 10/2/2014.
Treasury, “TARP: Two Year Retrospective,” 10/5/2010, pp. 76, 98, www.treasury.gov/initiatives/financial-stability/briefing-room/reports/agency_
reports/Documents/TARP%20Two%20Year%20Retrospective_10%2005%2010_transmittal%20letter.pdf, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 10/3/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “Hardest Hit Fund, Archived
Program Information, Participation Agreements, Amendments, and Initial Program Guidelines,” no date, www.treasury.gov/initiatives/financialstability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; SIGTARP analysis of HFA participation agreements
and amendments.
Treasury, “Hardest Hit Fund: Program Purpose and Overview,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/
hhf/Pages/default.aspx, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 10/3/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, Monthly Report to Congress, July 2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/July%202014%20
Monthly%20Report%20to%20Congress.pdf accessed 10/23/2014; Treasury Monthly Report to Congress, August 2014,www.treasury.gov/
initiatives/financial-stability/reports/Documents/August%202014%20Monthly%20Report%20to%20Congress.pdf accessed 10/8/2014.
Treasury, Monthly Report to Congress, July 2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/July%202014%20
Monthly%20Report%20to%20Congress.pdf accessed 10/23/2014; Treasury, Monthly Report to Congress, September 2014, www.treasury.
gov/initiatives/financial-stability/reports/Documents/Final%20September%202014%20Monthly%20Report%20to%20Congress.pdf accessed
10/23/2014.
Treasury, Transactions Report-Housing Programs, 9/29/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2009.29.2014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 10/3/2013,
1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, responses to SIGTARP data calls, 10/3/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013, 10/3/2013, 10/17/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA
Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20
Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 10/3/2013,
1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, responses to SIGTARP data calls, 10/3/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate Quarterly
Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/1/2014; Alabama Housing Finance Authority, “Hardest Hit Alabama, Treasury Reports,” no date, www.
hardesthitalabama.com/resources/treasury_reporting.aspx, accessed 10/2/2014; Arizona (Home) Foreclosure Prevention Funding Corporation,
“Hardest Hit Fund Reporting [quarterly performance reports],” no date, www.azhousing.gov/ShowPage.aspx?ID=405&CID=11, accessed

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

336.
337.
338.
339.

340.

341.

342.

10/2/2014; CalHFA Mortgage Assistance Corporation, “Keep Your Home California, Reports & Statistics, Quarterly Reports,” no date,
keepyourhomecalifornia.org/quarterly-reports/, accessed 10/2/2014; Florida Housing Finance Corporation, “Florida Hardest Hit Fund
(HHF) Information, Quarterly Reports,” no date, apps.floridahousing.org/StandAlone/FHFC_ECM/ContentPage.aspx?PAGE=0277, accessed
10/2/2014; GHFA Affordable Housing Inc., “HomeSafe Georgia, US Treasury Reports,” no date, www.dca.state.ga.us/housing/homeownership/
programs/treasuryReports.asp, accessed 10/2/2014; Illinois Housing Development Authority, “Illinois Hardest Hit Program, Reporting,” no date,
www.illinoishardesthit.org/spv-7.aspx, accessed 10/2/2014; Indiana Housing and Community Development Authority, “Indiana’s Hardest Hit
Fund, Quarterly Reports to the U.S. Treasury,” no date, www.877gethope.org/reports/, accessed 10/2/2014; Kentucky Housing Corporation,
“American Recovery and Reinvestment Act and Troubled Asset Relief Program, Kentucky Unemployment Bridge Program [quarterly reports],”
no date, www.kyhousing.org/page.aspx?id=3165, accessed 10/2/2014; Michigan Homeowner Assistance Nonprofit Housing Corporation,
“Hardest Hit U.S. Treasury Reports,” no date, www.michigan.gov/mshda/0,4641,7-141-45866_62889_47905-250571--,00.html, accessed
10/2/2014; Mississippi Home Corporation, “Financial Disclosures, Hardest Hit Fund, HFA Performance Data Report[s],” no date, www.
mshomecorp.com/about%20mhc/disclosures.htm, accessed 10/2/2014; Nevada Affordable Housing Assistance Corporation, “Nevada Hardest
Hit Fund, US Treasury Reports,” no date, nevadahardesthitfund.nv.gov/, accessed 10/2/2014; New Jersey Housing and Mortgage Finance
Agency, “The New Jersey HomeKeeper Program, About the Program, Performance Reports,” no date, www.njhomekeeper.com/spv-55.aspx,
accessed 10/2/2014; North Carolina Housing Finance Agency, “Hardest Hit Fund™ & Performance Reporting, …Quarterly Reports,” no date,
www.ncforeclosureprevention.gov/hardest_hit_funds.aspx, accessed 10/2/2014; Ohio Homeowner Assistance LLC, “Save the Dream Ohio:
Quarterly Reports,” ohiohome.org/savethedream/quarterlyreports.aspx, accessed 10/2/2014; Oregon Affordable Housing Assistance Corporation,
“Oregon Homeownership Stabilization Initiative, Reporting,” no date, www.oregonhomeownerhelp.org/en/reporting, accessed 10/2/2014; Rhode
Island Housing and Mortgage Finance Corporation, “Hardest Hit Fund – Rhode Island, About HHFRI, REPORTS,” no date, www.hhfri.org/
HHFRI_Dynamic_Content.aspx?id=10737418256&ekmensel=c580fa7b_10737418238_10737418240_btnlink, accessed 10/2/2014; SC
Housing Corp, “SC HELP, Reports,” no date, www.schelp.gov/Resources/Reports.aspx, accessed 10/2/2014; Tennessee Housing Development
Agency, “Keep My Tennessee Home, Reports,” no date, www.keepmytnhome.org/news-and-reports/, accessed 10/2/2014; District of Columbia
Housing Finance Agency, “HomeSaver – A Foreclosure Prevention Program[quarterly performance reports],” www.dchfa.org/DCHFAHome/
Homebuyers/ForeclosurePrevention/QuarterlyReports/tabid/219/Default.aspx, accessed 10/2/2014; SIGTARP analysis of HFA quarterly
performance reports.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013, 10/3/2013, 10/17/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA
Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20
Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014.
Treasury, “Hardest Hit Fund, Archived Program Information, Participation Agreements and Initial Program Guidelines,” no date, www.treasury.
gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; SIGTARP analysis of HFA
participation agreements and amendments.
Treasury, “Hardest Hit Fund, Archived Program Information, Participation Agreements and Initial Program Guidelines,” no date, www.treasury.
gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; SIGTARP analysis of HFA
participation agreements and amendments.
Treasury, “Hardest Hit Fund Program Guidelines Round 1,” 2/19/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/
hhf/Pages/Archival-information.aspx, accessed 10/2/2014; Treasury, “Hardest Hit Fund Program Guidelines Round 2,” 3/29/2010, www.
treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; Treasury, “Hardest
Hit Fund Program Guidelines Round 3,” 8/11/2010, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/
HFA%20Proposal%20Guidelines%20Third%20Funding%20FINAL.pdf, accessed 10/2/2014; Treasury, “Hardest Hit Fund, Archived Program
Information, Aggregate Program Data and Agreements (Proposals, Participation Agreements, and Amendments),” no date, www.treasury.gov/
initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014; Alabama Housing Finance
Authority, “Hardest Hit Alabama, Treasury Reports,” no date, www.hardesthitalabama.com/resources/treasury_reporting.aspx, accessed
10/2/2014; Arizona (Home) Foreclosure Prevention Funding Corporation, “Hardest Hit Fund Reporting [quarterly performance reports],”
no date, www.azhousing.gov/ShowPage.aspx?ID=405&CID=11, accessed 10/2/2014; CalHFA Mortgage Assistance Corporation, “Keep Your
Home California, Reports & Statistics, Quarterly Reports,” no date, keepyourhomecalifornia.org/quarterly-reports/, accessed 10/2/2014;
Florida Housing Finance Corporation, “Florida Hardest Hit Fund (HHF) Information, Quarterly Reports” no date, apps.floridahousing.org/
StandAlone/FHFC_ECM/ContentPage.aspx?PAGE=0277, accessed 10/2/2014; GHFA Affordable Housing Inc., “HomeSafe Georgia, US
Treasury Reports,” no date, www.dca.state.ga.us/housing/homeownership/programs/treasuryReports.asp, accessed 10/2/2014; Illinois Housing
Development Authority, “Illinois Hardest Hit Program, Reporting,” no date, www.illinoishardesthit.org/spv-7.aspx, accessed 10/2/2014;
Indiana Housing and Community Development Authority, “Indiana’s Hardest Hit Fund, Quarterly Reports to the U.S. Treasury,” no date,
www.877gethope.org/reports/, accessed 10/2/2014; Kentucky Housing Corporation, “American Recovery and Reinvestment Act and Troubled
Asset Relief Program, Kentucky Unemployment Bridge Program [quarterly reports],” no date, www.kyhousing.org/page.aspx?id=3165, accessed
10/2/2014; Michigan Homeowner Assistance Nonprofit Housing Corporation, “Hardest Hit U.S. Treasury Reports,” no date, www.michigan.
gov/mshda/0,4641,7-141-45866_62889_47905-250571--,00.html, accessed 10/2/2014; Mississippi Home Corporation, “Financial Disclosures,
Hardest Hit Fund, HFA Performance Data Report[s],” no date, www.mshomecorp.com/about%20mhc/disclosures.htm, accessed 10/2/2014;
Nevada Affordable Housing Assistance Corporation, “Nevada Hardest Hit Fund, US Treasury Reports,” no date, nevadahardesthitfund.
nv.gov/, accessed 10/2/2014; New Jersey Housing and Mortgage Finance Agency, “The New Jersey HomeKeeper Program, About the Program,
Performance Reports,” no date, www.njhomekeeper.com/spv-55.aspx, accessed 10/2/2014; North Carolina Housing Finance Agency, “Hardest
Hit Fund™ & Performance Reporting, …Quarterly Reports,” no date, www.ncforeclosureprevention.gov/hardest_hit_funds.aspx, accessed
10/2/2014; Ohio Homeowner Assistance LLC, “Save the Dream Ohio: Quarterly Reports,” ohiohome.org/savethedream/quarterlyreports.aspx,
accessed 10/2/2014; Oregon Affordable Housing Assistance Corporation, “Oregon Homeownership Stabilization Initiative, Reporting,” no
date, www.oregonhomeownerhelp.org/en/reporting, accessed 10/2/2014; Rhode Island Housing and Mortgage Finance Corporation, “Hardest
Hit Fund – Rhode Island, About HHFRI, REPORTS,” no date, www.hhfri.org/HHFRI_Dynamic_Content.aspx?id=10737418256&ekmense
l=c580fa7b_10737418238_10737418240_btnlink, accessed 10/2/2014; SC Housing Corp, “SC HELP, Reports,” no date, www.schelp.gov/

381

382

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

343.

344.

345.
346.

Resources/Reports.aspx, accessed 10/2/2014; Tennessee Housing Development Agency, “Keep My Tennessee Home, Reports,” no date, www.
keepmytnhome.org/news-and-reports/, accessed 10/2/2014; District of Columbia Housing Finance Agency, “HomeSaver – A Foreclosure
Prevention Program[quarterly performance reports],” www.dchfa.org/DCHFAHome/Homebuyers/ForeclosurePrevention/QuarterlyReports/
tabid/219/Default.aspx, accessed 10/2/2014; SIGTARP analysis of HFA quarterly performance reports.
Treasury, “HFA Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/
Documents/HFA%20Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014; Alabama Housing Finance Authority, “Hardest Hit Alabama,
Treasury Reports,” no date, www.hardesthitalabama.com/resources/treasury_reporting.aspx, accessed 10/2/2014; Arizona (Home) Foreclosure
Prevention Funding Corporation, “Hardest Hit Fund Reporting [quarterly performance reports],” no date, www.azhousing.gov/ShowPage.
aspx?ID=405&CID=11, accessed 10/2/2014; CalHFA Mortgage Assistance Corporation, “Keep Your Home California, Reports & Statistics,
Quarterly Reports,” no date, keepyourhomecalifornia.org/quarterly-reports/, accessed 10/2/2014; Florida Housing Finance Corporation,
“Florida Hardest Hit Fund (HHF) Information, Quarterly Reports,” no date, apps.floridahousing.org/StandAlone/FHFC_ECM/ContentPage.
aspx?PAGE=0277, accessed 10/2/2014; GHFA Affordable Housing Inc., “HomeSafe Georgia, US Treasury Reports,” no date, www.dca.
state.ga.us/housing/homeownership/programs/treasuryReports.asp, accessed 10/2/2014; Illinois Housing Development Authority, “Illinois
Hardest Hit Program, Reporting,” no date, www.illinoishardesthit.org/spv-7.aspx, accessed 10/2/2014; Indiana Housing and Community
Development Authority, “Indiana’s Hardest Hit Fund, Quarterly Reports to the U.S. Treasury,” no date, www.877gethope.org/reports/,
accessed 10/2/2014; Kentucky Housing Corporation, “American Recovery and Reinvestment Act and Troubled Asset Relief Program,
Kentucky Unemployment Bridge Program [quarterly reports],” no date, www.kyhousing.org/page.aspx?id=3165, accessed 10/2/2014;
Michigan Homeowner Assistance Nonprofit Housing Corporation, “Hardest Hit U.S. Treasury Reports,” no date, www.michigan.gov/
mshda/0,4641,7-141-45866_62889_47905-250571--,00.html, accessed 10/2/2014; Mississippi Home Corporation, “Financial Disclosures,
Hardest Hit Fund, HFA Performance Data Report[s],” no date, www.mshomecorp.com/about%20mhc/disclosures.htm, accessed 10/2/2014;
Nevada Affordable Housing Assistance Corporation, “Nevada Hardest Hit Fund, US Treasury Reports,” no date, nevadahardesthitfund.
nv.gov/, accessed 10/2/2014; New Jersey Housing and Mortgage Finance Agency, “The New Jersey HomeKeeper Program, About the Program,
Performance Reports,” no date, www.njhomekeeper.com/spv-55.aspx, accessed 10/2/2014; North Carolina Housing Finance Agency, “Hardest
Hit Fund™ & Performance Reporting, …Quarterly Reports,” no date, www.ncforeclosureprevention.gov/hardest_hit_funds.aspx, accessed
10/2/2014; Ohio Homeowner Assistance LLC, “Save the Dream Ohio: Quarterly Reports,” ohiohome.org/savethedream/quarterlyreports.aspx,
accessed 10/2/2014; Oregon Affordable Housing Assistance Corporation, “Oregon Homeownership Stabilization Initiative, Reporting,” no
date, www.oregonhomeownerhelp.org/en/reporting, accessed 10/2/2014; Rhode Island Housing and Mortgage Finance Corporation, “Hardest
Hit Fund – Rhode Island, About HHFRI, REPORTS,” no date, www.hhfri.org/HHFRI_Dynamic_Content.aspx?id=10737418256&ekmense
l=c580fa7b_10737418238_10737418240_btnlink, accessed 10/2/2014; SC Housing Corp, “SC HELP, Reports,” no date, www.schelp.gov/
Resources/Reports.aspx, accessed 10/2/2014; Tennessee Housing Development Agency, “Keep My Tennessee Home, Reports,” no date, www.
keepmytnhome.org/news-and-reports/, accessed 10/2/2014; District of Columbia Housing Finance Agency, “HomeSaver – A Foreclosure
Prevention Program[quarterly performance reports],” www.dchfa.org/DCHFAHome/Homebuyers/ForeclosurePrevention/QuarterlyReports/
tabid/219/Default.aspx, accessed 10/2/2014; SIGTARP analysis of HFA quarterly performance reports.
Treasury, “HFA Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/
Documents/HFA%20Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014; Alabama Housing Finance Authority, “Hardest Hit Alabama,
Treasury Reports,” no date, www.hardesthitalabama.com/resources/treasury_reporting.aspx, accessed 10/2/2014; Arizona (Home) Foreclosure
Prevention Funding Corporation, “Hardest Hit Fund Reporting [quarterly performance reports],” no date, www.azhousing.gov/ShowPage.
aspx?ID=405&CID=11, accessed 10/2/2014; CalHFA Mortgage Assistance Corporation, “Keep Your Home California, Reports & Statistics,
Quarterly Reports,” no date, keepyourhomecalifornia.org/quarterly-reports/, accessed 10/2/2014; Florida Housing Finance Corporation,
“Florida Hardest Hit Fund (HHF) Information, Quarterly Reports,” no date, apps.floridahousing.org/StandAlone/FHFC_ECM/ContentPage.
aspx?PAGE=0277, accessed 10/2/2014; GHFA Affordable Housing Inc., “HomeSafe Georgia, US Treasury Reports,” no date, www.dca.
state.ga.us/housing/homeownership/programs/treasuryReports.asp, accessed 10/2/2014; Illinois Housing Development Authority, “Illinois
Hardest Hit Program, Reporting,” no date, www.illinoishardesthit.org/spv-7.aspx, accessed 10/2/2014; Indiana Housing and Community
Development Authority, “Indiana’s Hardest Hit Fund, Quarterly Reports to the U.S. Treasury,” no date, www.877gethope.org/reports/,
accessed 10/2/2014; Kentucky Housing Corporation, “American Recovery and Reinvestment Act and Troubled Asset Relief Program,
Kentucky Unemployment Bridge Program [quarterly reports],” no date, www.kyhousing.org/page.aspx?id=3165, accessed 10/2/2014;
Michigan Homeowner Assistance Nonprofit Housing Corporation, “Hardest Hit U.S. Treasury Reports,” no date, www.michigan.gov/
mshda/0,4641,7-141-45866_62889_47905-250571--,00.html, accessed 10/2/2014; Mississippi Home Corporation, “Financial Disclosures,
Hardest Hit Fund, HFA Performance Data Report[s],” no date, www.mshomecorp.com/about%20mhc/disclosures.htm, accessed 10/2/2014;
Nevada Affordable Housing Assistance Corporation, “Nevada Hardest Hit Fund, US Treasury Reports,” no date, nevadahardesthitfund.
nv.gov/, accessed 10/2/2014; New Jersey Housing and Mortgage Finance Agency, “The New Jersey HomeKeeper Program, About the Program,
Performance Reports,” no date, www.njhomekeeper.com/spv-55.aspx, accessed 10/2/2014; North Carolina Housing Finance Agency, “Hardest
Hit Fund™ & Performance Reporting, …Quarterly Reports,” no date, www.ncforeclosureprevention.gov/hardest_hit_funds.aspx, accessed
10/2/2014; Ohio Homeowner Assistance LLC, “Save the Dream Ohio: Quarterly Reports,” ohiohome.org/savethedream/quarterlyreports.aspx,
accessed 10/2/2014; Oregon Affordable Housing Assistance Corporation, “Oregon Homeownership Stabilization Initiative, Reporting,” no
date, www.oregonhomeownerhelp.org/en/reporting, accessed 10/2/2014; Rhode Island Housing and Mortgage Finance Corporation, “Hardest
Hit Fund – Rhode Island, About HHFRI, REPORTS,” no date, www.hhfri.org/HHFRI_Dynamic_Content.aspx?id=10737418256&ekmense
l=c580fa7b_10737418238_10737418240_btnlink, accessed 10/2/2014; SC Housing Corp, “SC HELP, Reports,” no date, www.schelp.gov/
Resources/Reports.aspx, accessed 10/2/2014; Tennessee Housing Development Agency, “Keep My Tennessee Home, Reports,” no date, www.
keepmytnhome.org/news-and-reports/, accessed 10/2/2014; District of Columbia Housing Finance Agency, “HomeSaver – A Foreclosure
Prevention Program[quarterly performance reports],” www.dchfa.org/DCHFAHome/Homebuyers/ForeclosurePrevention/QuarterlyReports/
tabid/219/Default.aspx, accessed 10/2/2014; SIGTARP analysis of HFA quarterly performance reports.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, “HFA Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/
initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20Q22014%20Report.pdf, accessed 10/1/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, “HFA Aggregate Quarterly Report Q2 2014,”

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

347.
348.
349.
350.
351.
352.
353.

354.

355.

356.
357.

358.

359.

360.
361.

362.

363.

364.
365.

366.

367.

no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20Q22014%20Report.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/5/2013, 10/17/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, responses to SIGTARP data calls, 10/7/2013, 10/17/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Rhode Island Housing and Mortgage Finance
Corporation, “HHFRI News,” no date, www.hhfri.org, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 10/7/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Illinois Housing Development Authority,
“Welcome to the Illinois Hardest Hit Program,” no date, www.illinoishardesthit.org, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 10/7/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; New Jersey Housing and Mortgage
Finance Agency, “The New Jersey HomeKeeper Program,” no date, www.njhomekeeper.com/, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Alabama Housing Finance Authority, “Hardest Hit Alabama, Treasury Reports, 2014, 2nd
Quarter,” no date, www.hardesthitalabama.com/resources/treasury_reporting.aspx, accessed 10/2/2014; SIGTARP analysis of Alabama Housing
Finance Authority quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013, 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.
gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed
10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate Quarterly
Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Arizona (Home) Foreclosure Prevention Funding Corporation, “Hardest Hit Fund Reporting,
Hardest Hit Fund-2nd Quarter 2014,” no date, www.azhousing.gov/ShowPage.aspx?ID=405&CID=11, accessed 10/2/2014; SIGTARP analysis
of Arizona (Home) Foreclosure Prevention Funding Corporation quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; CalHFA Mortgage Assistance Corporation, “Keep Your Home California, Reports & Statistics,
Quarterly Reports, 2014, Second Quarter (Period ending 6/30/14),” no date, keepyourhomecalifornia.org/quarterly-reports/, accessed 10/2/2014;
SIGTARP analysis of CalHFA Mortgage Assistance Corporation quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Florida Housing Finance Corporation, “Florida Hardest Hit Fund (HHF) Information, Quarterly
Reports, HHF QTR Report ending 6/30/14,” no date, apps.floridahousing.org/StandAlone/FHFC_ECM/ContentPage.aspx?PAGE=0277,
accessed 10/2/2014; SIGTARP analysis of Florida Housing Finance Corporation quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20

383

384

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

368.
369.

370.

371.

372.

373.
374.

375.

376.

377.
378.
379.

380.

381.

382.
383.

384.

Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/201, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; GHFA Affordable Housing Inc., “HomeSafe Georgia, US Treasury Reports, June 2014 Report,” no
date, www.dca.state.ga.us/housing/homeownership/programs/treasuryReports.asp, accessed 10/2/2014; SIGTARP analysis of GHFA Affordable
Housing Inc. quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, “HFA Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/
Documents/HFA%20Aggregate%20Q22014%20Report.pdf, accessed 10/2/2014; GHFA Affordable Housing Inc., “HomeSafe Georgia, US
Treasury Reports, June 2014 Report,” no date, www.dca.state.ga.us/housing/homeownership/programs/treasuryReports.asp, accessed 10/2/2014;
SIGTARP analysis of GHFA Affordable Housing Inc. quarterly performance report; “Hardest Hit Fund, Archived Program Information,
Participation Agreements, Amendments, and Initial Program Guidelines,” no date, www.treasury.gov/initiatives/financial-stability/TARPPrograms/housing/hhf/Pages/Archival-information.aspx, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Illinois Housing Development Authority, “Illinois Hardest Hit Program, Reporting, Illinois HHF
Second Quarter Performance Report 2014,” no date, www.illinoishardesthit.org/spv-7.aspx, accessed 10/2/2014; SIGTARP analysis of Illinois
Housing Development Authority quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 10/7/2013, 10/17/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Illinois Housing
Development Authority, “Welcome to the Illinois Hardest Hit Program,” no date, www.illinoishardesthit.org/, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Indiana Housing and Community Development Authority, “Indiana’s Hardest Hit Fund, Quarterly
Reports to the U.S. Treasury, Indiana’s Hardest Hit Fund Quarterly Report (Q2) 2014 as submitted to Treasury August 15, 2014,” no date,
www.877gethope.org/reports/, accessed 10/2/2014; SIGTARP analysis of Indiana Housing and Community Development Authority quarterly
performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Kentucky Housing Corporation, “American Recovery and Reinvestment Act and Troubled

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

385.

386.
387.

388.

389.

390.
391.

392.

393.

394.
395.

396.

397.

398.
399.

400.

401.
402.
403.

Asset Relief Program, Kentucky Unemployment Bridge Program, Unemployment Bridge Program 2nd Quarter 2014 Report,” no date, www.
kyhousing.org/page.aspx?id=3165, accessed 10/2/2014; SIGTARP analysis of Kentucky Housing Corporation quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Michigan Homeowner Assistance Nonprofit Housing Corporation, “Hardest Hit U.S. Treasury
Reports, Quarter End 6/30/2014,” no date, www.michigan.gov/mshda/0,4641,7-141-45866_62889_47905-250571--,00.html, accessed
10/2/2014; SIGTARP analysis of Michigan Homeowner Assistance Nonprofit Housing Corporation quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls,1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Mississippi Home Corporation, “Financial Disclosures, Hardest Hit Fund, HFA Performance
Data Report, 2nd Quarter 2014,” no date, www.mshomecorp.com/about%20mhc/disclosures.htm, accessed 10/6/2014; SIGTARP analysis of
Mississippi Home Corporation quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; New Jersey Housing and Mortgage Finance Agency, “The New Jersey HomeKeeper Program,
About the Program, Performance Reports, New Jersey Second Quarter 2014 Performance Report,” no date, www.njhomekeeper.com/spv-55.
aspx, accessed 10/2/2014; SIGTARP analysis of New Jersey Housing and Mortgage Finance Agency quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; New Jersey Housing and Mortgage Finance Agency,
“The New Jersey HomeKeeper Program,” no date, www.njhomekeeper.com/, accessed 10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,

385

386

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

404.

405.
406.

407.

408.

409.
410.
411.

412.

413.

414.
415.

416.
417.

418.

419.

420.
421.

accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; North Carolina Housing Finance Agency, “Hardest Hit Fund™ & Performance Reporting,
Quarterly Reports, Quarter 2 – April – June 2014,” no date, www.ncforeclosureprevention.gov/hardest_hit_funds.aspx, accessed 10/2/2014;
SIGTARP analysis of North Carolina Housing Finance Agency quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Ohio Homeowner Assistance LLC, “Save the Dream Ohio: Quarterly Reports, Second Quarter
2014 Report” ohiohome.org/savethedream/quarterlyreports.aspx, accessed 10/2/2014; SIGTARP analysis of Ohio Homeowner Assistance LLC
quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Oregon Affordable Housing Assistance Corporation, “Oregon Homeownership Stabilization
Initiative, Reporting, OHSI Quarter 2 2014 Report (April - June 2014),” no date, www.oregonhomeownerhelp.org/en/reporting, accessed
10/2/2014; SIGTARP analysis of Oregon Affordable Housing Assistance Corporation quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, “HFA Aggregate Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/
Documents/HFA%20Aggregate%20Q22014%20Report.pdf, accessed 10/2/2014; Oregon Affordable Housing Assistance Corporation, “Oregon
Homeownership Stabilization Initiative, Reporting, OHSI 2 2014 Report (April - June 2014),” no date, www.oregonhomeownerhelp.org/en/
reporting, accessed 10/2/2014; “Hardest Hit Fund, Archived Program Information, Participation Agreements, Amendments, and Initial Program
Guidelines,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archival-information.aspx, accessed
10/2/2014; SIGTARP analysis of HFA participation agreements and amendments.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Rhode Island Housing and Mortgage Finance Corporation, “Hardest Hit Fund – Rhode
Island, About HHFRI, REPORTS, Q2 2014,” no date, www.hhfri.org/HHFRI_Dynamic_Content.aspx?id=10737418256&ekmensel=c580fa
7b_10737418238_10737418240_btnlink, accessed 10/2/2014; SIGTARP analysis of Rhode Island Housing and Mortgage Finance Corporation
quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013, 10/7/2013, 10/17/2013, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Rhode Island
Housing and Mortgage Finance Corporation, “HHFRI News,” no date, www.hhfri.org, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

422.

423.

424.

425.
426.

427.

428.
429.
430.

431.

432.

433.
434.

435.
436.
437.
438.
439.
440.
441.
442.
443.
444.
445.
446.
447.

448.

Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; SC Housing Corp, “SC HELP, Reports, Quarter ending June 30, 2014,” no date, www.schelp.gov/
Resources/Reports.aspx, accessed 10/2/2014; SIGTARP analysis of SC Housing Corp quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; Tennessee Housing Development Agency, “Keep My Tennessee Home, Reports, Second Quarter
2014 Report,” no date, www.keepmytnhome.org/news-and-reports/, accessed 10/2/2014; SIGTARP analysis of Tennessee Housing Development
Agency quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 7/8/2014 and
10/6/2014.
Treasury, responses to SIGTARP data calls, 7/5/2013 and 10/17/2013; Treasury, Transactions Report-Housing Programs, 6/26/2014, www.
treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20Transactions%20Report%20as%20of%2006%2026%202014.pdf,
accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014; Treasury, “HFA Aggregate
Quarterly Report Q2 2014,” no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Documents/HFA%20Aggregate%20
Q22014%20Report.pdf, accessed 10/2/2014; District of Columbia Housing Finance Agency, “HomeSaver – A Foreclosure Prevention
Program[quarterly performance reports], DCHFA HomeSaver Program – June 30, 2014 Quarterly Report,” www.dchfa.org/DCHFAHome/
Homebuyers/ForeclosurePrevention/QuarterlyReports/tabid/219/Default.aspx, accessed 10/2/2014; SIGTARP analysis of District of Columbia
Housing Finance Agency quarterly performance report.
Treasury, Transactions Report-Housing Programs, 6/26/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Housing%20
Transactions%20Report%20as%20of%2006%2026%202014.pdf, accessed 10/2/2014; Treasury, responses to SIGTARP data calls, 1/17/2014,
4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, responses to SIGTARP data calls, 1/17/2014, 4/9/2014, 7/8/2014 and 10/6/2014.
Treasury, briefing to SIGTARP and other Federal agency staff, 3/8/2013; Treasury, “AMENDMENT NO.1 TO FACILITY PURCHASE
AGREEMENT,” 3/4/2013, www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/mha/Documents_Contracts_Agreements/
Citi%20Amendment%201%20to%20Facility%20Purchase%20Agreement.pdf, accessed 10/6/2014.
Treasury, “FHA Program Adjustments to Support Refinancing for Underwater Homeowners,” 3/25/2010, www.makinghomeaffordable.gov/news/
latest/Documents/FHA_Refinance_Fact_Sheet_032510%20FINAL2.pdf, accessed 10/9/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
HUD, response to SIGTARP draft report, 1/10/2011.
HUD, “Mortgagee Letter 2010-23: FHA Refinance of Borrowers in Negative Equity Positions,” 8/6/2010, www.hud.gov/offices/adm/hudclips/
letters/mortgagee/files/10-23ml.pdf, accessed 10/9/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, response to SIGTARP data call, 1/11/2013; Treasury, briefing to SIGTARP and
other Federal agency staff, 3/8/2013.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, “Investment Programs, Capital Purchase Program, Key Information,” 3/17/2009, www.treasury.gov/initiatives/financial-stability/
programs/investment-programs/cpp/Pages/capitalpurchaseprogram.aspx, accessed 7/13/2012.
Treasury, “Investment Programs, Capital Purchase Program, Key Information,” 3/17/2009, www.treasury.gov/initiatives/financial-stability/
programs/investment-programs/cpp/Pages/capitalpurchaseprogram.aspx, accessed 7/13/2012.
Treasury, “Investment Programs, Capital Purchase Program, Key Information,” 3/17/2009, www.treasury.gov/initiatives/financial-stability/
programs/investment-programs/cpp/Pages/capitalpurchaseprogram.aspx, accessed 7/13/2012.
Treasury, “TARP Capital Purchase Program (Non-Public QFIs, excluding S Corps and Mutual Organizations),” 7/22/2012, www.treasury.gov/
initiatives/financial-stability/TARP-Programs/bank-investment-programs/cap/Documents/Term%20Sheet%20-%20Private%20C%20Corporations.
pdf, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.

387

388

SPECIAL INSPECTOR GENERAL I TROUBLED ASSET RELIEF PROGRAM

449.
450.
451.
452.

453.
454.
455.
456.
457.
458.
459.
460.
461.
462.
463.
464.

465.

466.

467.
468.
469.

470.
471.

472.

473.

474.
475.
476.
477.
478.
479.
480.

Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Section 105(a) Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/Final%20September%20
2014%20Monthly%20Report%20to%20Congress.pdf, accessed 10/10/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/
initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed
10/2/2014; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, response to SIGTARP data call 10/6/2014; Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financialstability/reports/Documents/September%202014%20Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,” no date, www.treasury.gov/initiatives/financialstability/programs/investment-programs/cpp/Documents/CPP%20Directors%20-%20Observer%20Fact%20Sheet.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014; OFS, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,”
no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/bank-investment-programs/cap/Documents/CPP%20Directors%20-%20
Observer%20Fact%20Sheet.pdf, accessed 10/1/2014.
Treasury, response to SIGTARP data call 10/6/2014; OFS, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,”
no date, www.treasury.gov/initiatives/financial-stability/TARP-Programs/bank-investment-programs/cap/Documents/CPP%20Directors%20-%20
Observer%20Fact%20Sheet.pdf, accessed 10/1/2014.
Treasury, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,” no date, www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investment-programs/cap/Documents/CPP%20Directors%20-%20Observer%20Fact%20Sheet.pdf, accessed
10/1/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,” no date, www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investment-programs/cap/Documents/CPP%20Directors%20-%20Observer%20Fact%20Sheet.pdf, accessed
10/1/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,” no date, www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investment-programs/cap/Documents/CPP%20Directors%20-%20Observer%20Fact%20Sheet.pdf, accessed
10/1/2014.
Treasury, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,” no date, www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investment-programs/cap/Documents/CPP%20Directors%20-%20Observer%20Fact%20Sheet.pdf, accessed
10/1/2014.
Treasury, “Factsheet Capital Purchase Program Nomination of Board Observers & Directors,” no date, www.treasury.gov/initiatives/financialstability/TARP-Programs/bank-investment-programs/cap/Documents/CPP%20Directors%20-%20Observer%20Fact%20Sheet.pdf, accessed
10/1/2014.
Treasury, response to SIGTARP data call, 10/6/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20

QUARTERLY REPORT TO CONGRESS I OCTOBER 29, 2014

481.
482.
483.
484.
485.
486.
487.
488.
489.
490.
491.
492.
493.
494.
495.
496.
497.
498.
499.
500.
501.
502.
503.
504.
505.
506.
507.
508.
509.
510.
511.
512.
513.
514.
515.
516.
517.
518.
519.
520.
521.
522.

Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury conference call, 3/19/2010; Treasury, response to SIGTARP data call, 10/6/2014.
Treasury conference call, 3/19/2010.
Treasury, response to SIGTARP draft report, 1/14/2012.
Treasury conference call, 3/19/2010.
Treasury conference call, 3/19/2010.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Dividends and Interest Report, 10/10/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/September%202014%20
Dividends%20Interest%20Report.pdf, accessed 10/10/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
SNL Financial LLC data.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
White House Press Release, “Remarks by the President on Small Business Initiatives,” 10/21/2009, www.whitehouse.gov/the-press-office/
remarks-president-small-business-initiatives-landover-md, accessed 10/1/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Small Business Jobs Act, P.L. 111-240, 9/27/2010, p. 2.
Treasury, response to SIGTARP data call, 10/5/2011.
Treasury, response to SIGTARP data call, 10/5/2011.
Treasury, “Glossary,” no date, www.treasury.gov/initiatives/financial-stability/glossary/Pages/default.aspx, accessed 10/1/2014.
Treasury, Warrant Disposition Report, 8/25/2011, www.treasury.gov/initiatives/financial-stability/reports/Documents/TARP%20Warrants%20
Report%20Aug2011.pdf, accessed 10/1/2014.
Treasury, “Treasury Announces Warrant Repurchase and Disposition Process for the Capital Purchase Program,” 6/26/2009, www.treasury.gov/
press-center/press-releases/Pages/200962612255225533.aspx, accessed 10/1/2014.
Treasury, “Treasury Announces Warrant Repurchase and Disposition Process for the Capital Purchase Program,” 6/26/2009, www.treasury.gov/
press-center/press-releases/Pages/200962612255225533.aspx, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, “Treasury Announces Warrant Repurchase and Disposition Process for the Capital Purchase Program,” 6/26/2009, www.treasury.gov/
press-center/press-releases/Pages/200962612255225533.aspx, accessed 10/1/2014.
Treasury, Warrant Disposition Report, 8/25/2011, www.treasury.gov/initiatives/financial-stability/reports/Documents/TARP%20Warrants%20
Report%20Aug2011.pdf, accessed 10/1/2014; Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/reports/Documents/10-2-14%20Transactions%20
Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, “Treasury Announces Warrant Repurchase and Disposition Process for the Capital Purchase Program,” 6/26/2009, www.treasury.gov/
press-center/press-releases/Pages/200962612255225533.aspx, accessed 10/1/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury Press Release, “Treasury Announces Intent to Sell Warrant Positions in Public Dutch Auctions,” 11/19/2009 (updated 4/12/2010),
www.treasury.gov/press-center/press-releases/Pages/tg415.aspx, accessed 10/1/2014.
Treasury, response to SIGTARP data call 10/10/2014; Treasury, Transactions Report, 9/30/2014, www.treasury.gov/initiatives/financial-stability/
reports/Documents/10-2-14%20Transactions%20Report%20as%20of%209-30-14_INVESTMENT.pdf, accessed 10/2/2014.
Treasury, response to SIGTARP data call, 10/10/2014.
Treasury, “Treasury Announces Completion of Private Auction to Sell Warrant Positions,” 11/18/2011, www.treasury.gov/press-center/pressreleases/Pages/tg1365.aspx, accessed 10/1/2014.
Treasury, “Treasury Completes Auction to Sell Warrant Positions,” 6/6/2013, www.treasury.gov/press-center