UNITED STATES DEPARTMENT OF THE TREASURY

OFFICE OF FINANCIAL STABILITY

Troubled Asset Relief Program

Four Year Retrospective Report

An Update on The Wind-Down of TARP

Troubled Asset Relief Program

Office of Financial Stability

March 2013
Page | i

Table of Contents

Message from the Assistant Secretary for Financial Stability.......................................................................... ii

Executive Summary: TARP After Four Years........................................................................................................... 1

TARP Wind-Down Report Card..................................................................................................................................... 2

Winding Down TARP’s Investment Programs ......................................................................................................... 4

Banking Investment Programs....................................................................................................................

 The Capital Purchase Program...................................................................................................... 

 The Community Development Capital Initiative..........................................................................

 The Targeted Investment Program...............................................................................................

 The Asset Guarantee Program.......................................................................................................

 The Capital Assistance Program.................................................................................................... 

4

5

8

8

9

9

Credit Market Programs............................................................................................................................... 11

 The Legacy Securities Public-Private Investment Program...................................................

 The SBA 7(a) Securities Purchase Program...............................................................................

 The Term Asset-Backed Securities Loan Facility.......................................................................

Automotive Industry Financing Program..................................................................................................

11

13

13

15

 General Motors...................................................................................................................................

 Chrysler................................................................................................................................................

 Ally Financial........................................................................................................................................

Investment in American International Group, Inc. ................................................................................

16

16

17

18

Housing Initiatives Under TARP................................................................................................................................... 20

Restoring the Nation’s Financial Stability................................................................................................................

Executive Compensation...............................................................................................................................................

29

33

Transparency in TARP Programs............................................................................................................................... 34

Latest Cost Estimates of TARP.................................................................................................................................... 36

Links for Further Information..................................................................................................................................... 37
Page | ii

Message from the Assistant Secretary for Financial Stability

I am pleased to present this four-year retrospective report on the Troubled 

Asset Relief Program (TARP). This report provides a status update through 

December 31, 2012 on our efforts to wind down TARP and recover the 

taxpayers’ outstanding investments. 

TARP was created more than four years ago by the Emergency Economic 

Stabilization Act of 2008 (EESA) as part of a broad-based federal response to 

the financial crisis. Thanks to TARP and the other emergency actions taken 

by the government, as well as the financial reforms that are being put in 

place, our economy is stronger, banks are better capitalized, the weakest 

parts of the financial system no longer exist, struggling homeowners have 

seen relief, and credit is more available to consumers and small businesses.

TARP was always meant to be a temporary, emergency program. The government should not be in 

the business of owning stakes in private companies for an indefinite period of time. That’s why, after 

we extinguished the immediate financial fire, we began moving to exit our investments and replace 

temporary government support with private capital. During the past year, Treasury’s Office of 

Financial Stability (OFS) made significant strides toward winding down TARP and recovering the 

taxpayers’ outstanding investments. When 2012 began, Treasury held $121 billion in outstanding 

TARP investments. By the end of 2012, Treasury held just over $40 billion, representing a reduction 

of more than 66 percent in 12 months. Several highlights from 2012 include:

 On December 14, 2012, Treasury sold its final shares of AIG common stock. With the 

proceeds from that offering, taxpayers have now realized an overall positive return of $22.7 

billion from the Federal Reserve and Treasury’s combined commitment to stabilize AIG 

during the financial crisis. 

 OFS substantially reduced the number of banks that remain part of TARP’s Capital 

Purchase Program. At the beginning of 2012, Treasury had outstanding investments of 

approximately $17 billion in 371 banks. By year’s end, we had outstanding investments of

approximately $8 billion in 212 banks. Taxpayers have already earned more than $23 billion 

in positive returns from their investments through TARP’s bank programs. At this point, 

every dollar recovered from those programs represents an additional dollar of positive 

returns for taxpayers.

 On December 21, 2012, General Motors (GM) repurchased 200 million shares of the 

company’s common stock from Treasury for proceeds of approximately $5.5 billion. The sale 

took place in connection with Treasury’s announcement on December 19, 2012 that we 

intended to sell our remaining shares in GM within the next 12-15 months, subject to market 

conditions. 

 OFS also substantially wound down TARP’s credit market programs during 2012. On 

January 24, 2012, we completed the wind down of the Small Business Administration 7(a) 

Securities Purchase Program, collecting $9 million more than we disbursed. Treasury fully 

recovered its loan under the Term Asset-Backed Securities Loan Facility just after the end of 

2012. We are also continuing to wind down the Legacy Securities Public-Private Investment 

Program. As of December 31, 2012, we had collected approximately 93 percent of the capital 

invested. Five of the program’s funds have now wound down, leaving four in the program.
Page | iii 

While TARP’s investment programs are winding down, OFS continues its commitment to 

homeowners by implementing TARP’s housing programs to prevent avoidable foreclosures. So far, 

these programs have directly helped more than 1.5 million homeowners avoid foreclosure, while 

setting new standards for the mortgage servicing industry, thereby helping millions more.

We have more work to do to further strengthen our economy. However, because the government 

acted with overwhelming force and speed to put out the financial fires during the crisis, we are in a 

far better position to confront our economic challenges in the months and years ahead. 

Sincerely,

Timothy G. Massad

Assistant Secretary

Office of Financial Stability
Page | 1

Executive Summary: TARP After Four Years

When TARP was created, some questioned whether 

it would succeed in stabilizing the financial system. 

Many others thought that taxpayers would incur 

hundreds of billions of dollars in losses on the 

program. However, by any reasonable standard, 

TARP worked: it helped stop widespread financial 

panic, it helped prevent what could have been a 

devastating collapse of our financial system, and it 

helped many struggling homeowners keep their 

homes. Moreover, TARP’s cost will be much lower 

than most people expected when it was created.

During 2012, OFS continued to focus on winding

down TARP. By the end of 2012, Treasury had 

collected nearly 93 percent of the total funds 

disbursed ($418 billion) under TARP, and many of 

the taxpayers’ investments under the program had 

yielded positive returns. As a result, the net cost of 

TARP is now projected to be $55.5 billion –

significantly lower than the $700 billion originally 

authorized by Congress under EESA or the more 

than $350 billion originally estimated by the 

Congressional Budget Office. And when Treasury’s 

other interests in AIG1 are factored in, Treasury 

estimates that the combined net cost will be 

approximately $38 billion. 

The investment programs under TARP collectively, together with Treasury’s overall AIG holdings,

are expected to break even or yield a small gain when they are fully wound down. Therefore, the 

total program cost of TARP is expected to be roughly equal to the amount that is ultimately 

disbursed to help homeowners avoid foreclosure—money that was never intended to be returned.

Moreover, the latest estimates available indicate that the overall financial stability programs that 

Treasury, the Federal Reserve, and the Federal Deposit Insurance Corporation (FDIC) put in place 

during the crisis are likely to result in an overall positive financial return for taxpayers in terms of 

direct fiscal cost.

While Treasury is moving to wind down TARP’s investment programs, OFS is also continuing to 

implement TARP’s housing programs. To date, there have been more than 1.5 million homeowner 

assistance actions taken through the Making Home Affordable (MHA) program. In 2012, more than 

350,000 homeowner assistance actions were taken under Treasury’s housing programs to help 

families avoid foreclosure. MHA has also set new standards across the mortgage servicing industry, 

thereby helping millions more.

 

1 Treasury’s investment in AIG common shares consisted of shares acquired in exchange for preferred stock purchased with 

TARP funds (TARP shares) and shares received from the trust created by the FRBNY for the benefit of Treasury as a result of 

its loan to AIG (non-TARP shares).

TARP Disbursements

Net of Repayments/Income
Page | 2

This is the third retrospective report on TARP that OFS has published. In October 2010, OFS 

published the TARP Two Year Retrospective,

2 which contains a comprehensive history of each TARP 

program. The following year, OFS published a Three Year Anniversary Report,

3 which serves as a 

supplement to the Two Year Retrospective. This report is intended to serve as an update on OFS’s

efforts to wind down TARP’s investment programs and a status update on TARP’s housing programs.

TARP’S BANKING INVESTMENT PROGRAMS

 Capital Purchase 

Program (CPP)

Treasury is winding down the CPP through a combination of (1) repayments; (2) restructurings; 

and (3) sales. Overall, the remaining principal amount invested has been reduced to 

approximately $7 billion from $205 billion and the program has already generated a positive 

return to date of more than $15 billion, with additional collections expected moving forward.

 Asset Guarantee 

Program (AGP)

All guarantees were terminated in 2009. No losses were incurred. To date, the positive return on

the AGP for taxpayers is more than $4 billion.

Targeted Investment 

Program (TIP)

All funds disbursed under the TIP were repaid in full in 2009 – plus an additional lifetime positive 

return of more than $3 billion.

Community 

Development Capital 

Initiative (CDCI)

Treasury has a remaining investment of approximately $533 million through the CDCI – less than 

one percent of its overall bank investments. Treasury will make decisions regarding the CDCI at a 

later date.

Capital Assistance 

Program (CAP)

No funding was ever disbursed under the CAP, which was part of the successful stress test process

that federal banking regulators conducted in 2009. 

CREDIT MARKET PROGRAMS

Term Asset-Backed 

Securities Loan Facility 

(TALF)

TARP’s remaining credit support agreement was terminated in January 2013 and TALF has 

earned a positive return for taxpayers. To date, Treasury has realized a positive return of $173 

million – with additional income expected moving forward.

Legacy Securities 

Public-Private

Investment Program 

(PPIP)

As of December 2012, no new investments were permitted. As of January 2013, Treasury had fully 

recovered its original investment of $18.6 billion in the PPIP, plus a positive return of $331 million 

through equity and debt repayments, interest, and proceeds in excess of original equity capital, 

including warrant proceeds. Five of the nine PPIP funds have already been wound down with a 

net positive return for taxpayers. The total outstanding investments for the remaining four PPIP 

funds also continue to decline. Consistent with the terms of the program, individual fund 

managers will make independent determinations about how quickly those remaining four funds 

are wound down. 

 SBA 7(a) Securities 

Purchase Program

The wind down was completed in January 2012. All securities have been sold. Treasury fully 

recovered the funds invested plus an additional gain of $9 million.

 

2 http://www.treasury.gov/initiatives/financialstability/reports/Documents/TARP%20Two%20Year%20Retrospective_10%2005%2010_transmittal%20letter.pdf

3 http://www.treasury.gov/initiatives/financial-stability/newsroom/news/Documents/TARP%20Three%20Year%20Anniversary%20Report.pdf
Page | 3

AUTOMOTIVE INDUSTRY FINANCING PROGRAM

Chrysler

Treasury fully exited its investment in Chrysler Group LLC in July 2011. Treasury has recovered 

more than 90 percent ($11.1 billion) of the funds committed to stabilize Chrysler ($12.4 billion). 

Treasury is unlikely to fully recover the difference of $1.3 billion. Treasury has the right to recover 

proceeds from the disposition of the liquidation trust associated with the bankruptcy of Old 

Chrysler, but does not expect a material recovery from those assets.

GM

By the end of 2012, Treasury had sold more than two-thirds (612 million shares) of the shares of 

General Motors common stock it originally held (912 million shares). In December 2012, Treasury 

announced its intention to fully exit its remaining investment (300 million shares) in GM within 

12-15 months, subject to market conditions. In January 2013, it entered into a prearranged 

written trading plan to proceed with that December 2012 announcement. The total funds 

Treasury recovers from its GM investment will depend upon future market conditions.

Ally Financial

In May 2012, Treasury outlined its exit strategy for its investment in Ally Financial. Treasury has 

already recovered about one-third of the total $17 billion invested, and it expects to begin to 

monetize its remaining investment as the company completes two critical strategic initiatives; the 

Chapter 11 proceeding for its mortgage subsidiary, Residential Capital, LLC, and the sale of its 

international auto finance operations. In November 2012, Ally announced that it had reached an 

agreement to sell its remaining international operations and that it expected total proceeds from 

those transactions of $9.2 billion.

INVESTMENT IN AIG

AIG

Treasury sold its final shares of AIG common stock in December 2012. Treasury and the Federal 

Reserve fully recovered the combined $182 billion committed to stabilize the company during the 

financial crisis plus an additional positive return of $22.7 billion. 

TARP’S HOUSING PROGRAMS

MHA

Through December 31, 2012, there were nearly 1.5 million homeowner assistance actions granted 

through MHA to help struggling homeowners avoid foreclosure. By changing the industry’s 

practices and setting standards for modifications, the program has helped millions more.

HHF

Programs are fully operational in all 18 states and the District of Columbia and saw substantial 

growth during 2012, both in terms of homeowners served and dollars spent. As a result of recent 

program and operational changes made by state housing finance agencies working closely with 

Treasury, OFS expects the pace of assistance to continue to accelerate throughout 2013.
Page | 4

 Banking Investment Programs

Winding Down TARP’s Investment Programs

Treasury’s authority to make new commitments under TARP expired on October 3, 2010. Since then, 

Treasury has been winding down TARP’s investment programs and recovering taxpayer dollars. As 

of December 31, 2012, Treasury had collected through repayments and other income more than $387 

billion – or nearly 93 percent – of the $418 billion in TARP funds disbursed to date. The following is 

an update on OFS’s efforts to wind down each TARP investment program as of December 31, 2012. 

 

During 2012, Treasury continued to wind down TARP’s programs to stabilize banks and recover more of 

the taxpayers’ outstanding investments.

Treasury invested approximately $245 billion under TARP to stabilize the nation’s banking system

through five programs. In the immediate aftermath of the financial crisis, these programs helped to 

restore confidence in the nation’s banking system by bolstering the capital position of banks of all 

sizes. TARP’s banking programs helped to provide these institutions with the additional capital they 

needed to absorb losses and restart the flow of credit to businesses and consumers. A more 

comprehensive history of TARP’s banking programs can be found in the TARP Two Year 

Retrospective.

4

Outstanding Bank Program Investments and Total Returns5

 

4 http://www.treasury.gov/initiatives/financial-stability/briefingroom/reports/agency_reports/Documents/TARP%20Two%20Year%20Retrospective_10%2005%2010_transmittal%20letter.pdf

5 Auctions include proceeds from dividends, interest, warrants, and other income where cash has settled with OFS as of 

December 31, 2012. Repayments are actual collections to date. Includes $2.21 billion in Small Business Lending Fund 

transfers and $0.36 billion in Community Development Capital Initiative transfers. Note: Write-offs and realized losses total 

$3.15 billion with a $1.8 billion par value. 
Page | 5

These programs have provided a gain for taxpayers. Of the $245 

billion originally invested, Treasury has already recovered more 

than $268 billion through repayments, dividends, interest, warrant 

sales, and other income as of December 31, 2012 – a positive return

of $23 billion. At this point, every additional dollar collected will 

add to these gains. 

Two of TARP’s banking programs—the Capital Purchase Program 

(CPP) and the Community Development Capital Initiative 

(CDCI)—still have outstanding investments. The other three 

programs—the Asset Guarantee Program (AGP), the Targeted 

Investment Program (TIP), and the Capital Assistance Program 

(CAP)—are now closed. 

The CPP is the largest bank investment program under TARP. Along with TARP’s other banking 

investment programs, the CPP played a key role in stabilizing the financial system. 

Treasury initially committed more than a third of the total TARP funding, $250 billion, to the CPP. 

That amount was ultimately reduced to approximately $205 billion, which was originally invested in 

more than 450 small and community banks and 22 certified Community Development Financial 

Institutions (CDFIs). The largest investment was $25 billion and the smallest was $301,000. The 

final investment under the CPP was made in December 2009. A total of 707 institutions in 48 states, 

Puerto Rico, and the District of Columbia received investments under the CPP. 

Where Things Stand

 

On January 1, 2012, Treasury had outstanding investments of approximately $17 billion in 371 

banks. As of December 31, 2012, Treasury had outstanding investments of approximately $7 billion 

in 212 banks. At the close of 2012, taxpayers had received $220.44 billion in total income from CPP 

institutions through repayments, sales, auctions, warrant sales, dividends, interest, and fee income. 

On May 3, 2012, Treasury outlined its strategy for winding down the CPP.

6 On December 18, 2012, 

Treasury provided a status update on the progress achieved toward implementing that strategy.7 

Although many banks have already exited the program, the vast majority of those remaining are 

small, community institutions. These smaller banks generally are not household names outside the 

communities they serve. As a result, they sometimes have difficulty raising funds from private 

investors in the capital markets to repay taxpayers. In addition, like all financial institutions, 

smaller banks have faced significant challenges in the aftermath of the financial crisis. Many 

community banks were particularly hard hit by troubled commercial and residential real estate 

loans. 

 

6 The complete statement by Treasury can be found at: http://www.treasury.gov/connect/blog/Pages/Winding-Down-TARPsBank-Programs.aspx

7 http://www.treasury.gov/connect/blog/Pages/An-Update-on-the-Wind-Down-of-TARP%E2%80%99s-Bank-Programs.aspx

Capital Purchase Program

―We believe TARP did exactly what 

it was designed to do. It gave us 

capital to get us through a very 

difficult time in banking. It got us 

through some of our issues until we 

were able to raise capital...We 

think it was government at its 

best, at least for First Capital.‖

John Presley

CEO of First Capital Bancorp, 

Glen Allen, Virginia

―Local Bank Sheds its TARP‖

Richmond Biz Sense

June 20, 2012
Page | 6

Given those realities, Treasury introduced a three-pronged strategy for winding down the CPP: 

waiting for some banks to repay at par, restructuring Treasury’s investments in limited cases, or 

selling banking investments to private investors through auctions in cases where the bank is not 

expected to be able to repay in the near future. Selling these investments can be beneficial for 

community banks that don't have easy access to the capital markets because the auctions attract

new, private capital to replace temporary government support. That enables the government to exit 

its stake and recover taxpayer dollars, while allowing the bank to keep the capital on its books. The 

bank can then continue to use that capital to make loans to families and businesses in its local 

community.

During 2012, 159 CPP institutions exited the program – delivering a total of $8.87 billion in 

proceeds.

8 Of those 159 institutions, 54 made full repayments at par, 90 were sold through auctions, 

five were restructured, two exited the program through sales of their assets, and eight entered into 

bankruptcy or receivership.

As with all TARP investments, Treasury’s wind-down plans are subject to market conditions and 

OFS regularly evaluates its investments in all of the remaining banks.

Repayments at Par

During 2012, 54 financial institutions repaid their CPP investments for proceeds of $6.97 billion

including several of the largest remaining investments in the program and the smallest CPP 

investment of $301,000. As of December 31, 2012, Treasury had received $193.97 billion in 

repayments under the CPP.

9

Treasury expects that the majority of the remaining banks that are not auctioned will repay 

Treasury’s CPP preferred shares or subordinated debt at par. Therefore Treasury will continue to 

hold onto those investments. 

Auction Sales

As part of its strategy to wind down the CPP, Treasury has conducted auctions to sell preferred stock 

and subordinated debt in CPP participants. Treasury generally employs a modified Dutch auction 

process, which is the same process Treasury uses for warrant auctions, where it establishes a market 

price by allowing investors to submit bids at specified increments.

Treasury held its first auction of CPP investments in March 2012. By the end of December 2012, 

Treasury had conducted 12 sets of auctions of preferred stock and subordinated debt in 91 CPP 

participants, resulting in combined proceeds of more than $1.5 billion for taxpayers.

10 Those 91

banks have also paid more than $300 million in dividends and interest over the life of the 

investments.

Treasury plans to auction its preferred shares or subordinated debt in approximately two-thirds of 

the remaining CPP banks in 2013, subject to market conditions. 

 

8 The total of $8.87 billion includes proceeds from some institutions that did not leave the program but partially redeemed 

their securities. 

9 The total of $193.97 billion in repayments excludes CDCI exchanges from the CPP. The total amount of CPP repayments 

including CDCI exchanges was $194.32 billion as of December 31, 2012. 

10 Of the 91 institutions that Treasury auctioned its preferred stock and subordinated debt in during 2012, 90 fully exited the 

CPP. 
Page | 7

Restructurings

The final component of Treasury’s exit strategy for the CPP is to work with a limited number of 

banks that are seeking to restructure their Treasury investments. Under these arrangements, 

Treasury agrees to receive cash or other securities (sometimes at a discount to the original ―par‖ 

value of the investment), which can be more easily sold. 

During 2012, OFS restructured five CPP investments. Treasury agreed to these transactions because 

they represented the best deal possible for taxpayers. Going forward, Treasury will continue to 

participate in these types of transactions on a limited basis when it determines that it is in the best 

interest of taxpayers.

Additional Returns for the Taxpayers 

In addition to the preferred shares or debt securities received in exchange for Treasury’s 

investments, Treasury received warrants to purchase common shares or – in the case of private 

financial institutions – additional preferred or subordinated debt, from the participants at the time 

of the CPP investment. Treasury also earns dividends or interest on the securities received. These

provide taxpayers with additional returns on their investment. During 2012, Treasury received $619

million in additional returns from banks participating in the CPP from warrants, dividends, and 

interest. 

Warrant Repurchases

When a CPP participant repurchases its original investment, it may also repurchase its warrants for 

common stock at an agreed upon fair market price. If an institution decides not to repurchase its 

warrants, Treasury has the contractual right to sell them. Treasury has followed a policy of 

disposing of warrants as soon as practicable if no agreement is reached. 

During 2012, Treasury received $144.27 million in total proceeds from the disposition of warrants 

associated with 100 CPP investments. Of these, 67 were repurchased by the financial institution 

that issued them and 33 were sold by Treasury through public offerings. Since the start of the CPP,

Treasury has realized $7.73 billion in gross proceeds from the sale of these warrants.

The latest information about the sale of warrants under TARP can be found in Treasury’s Warrant 

Disposition Report.

11

Dividends and Interest

Treasury also collects dividend and interest payments from CPP participants, which add to the total 

return that taxpayers receive under the program. As of December 31, 2012, the total amount of 

dividend and interest income that Treasury received from CPP investments (life to date) was $11.84 

billion. 

Under the terms of the CPP, Treasury has the contractual right to appoint up to two members to the 

board of directors of a CPP recipient in the event that it misses a sixth dividend or interest payment 

on the preferred stock or subordinated debt.

 

11 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Warrant-Disposition-Reports.aspx
Page | 8

As of December 31, 2012, Treasury had elected a total of 22 directors to the boards of 13 banks. Fiftytwo institutions had agreed to have Treasury observers at their board of directors meetings, 

including several that are expected to miss their sixth dividend payment in the near future.

Treasury issues a monthly report12 detailing dividends and interest received, as well as missed 

payments.

 

To help mitigate the adverse impact that the financial crisis had on communities underserved by 

traditional banks, Treasury launched the Community Development Capital Initiative (CDCI) in 

February 2010. Under this program, Treasury provided capital to banks, thrifts, and credit unions 

that qualified as Community Development Financial Institutions (CDFIs). These investments 

carried an initial dividend or interest rate of two percent, compared to the five percent rate offered 

under the CPP. 

Recognizing the unique circumstances facing CDFIs to raise capital, the dividend rate was designed 

to increase to nine percent after eight years, compared to five years for institutions participating in 

the CPP. CDFIs participating in the CPP that were in good standing were allowed to exchange 

securities issued under the CPP for securities under the more favorable terms of this program.

Where Things Stand

Treasury completed funding under this program in September 2010. The total investment amount 

for the program was approximately $570 million for 84 institutions.

13

During 2012, Treasury received $37.5 million in repayments from six CDCI institutions. As of 

December 31, 2012, there were 78 institutions remaining in the CDCI program with a total 

outstanding investment amount of $532.5 million. During 2012, Treasury received $11.16 million in 

dividends from CDCI institutions. Treasury will announce its plans regarding the program at a later 

date.

Treasury established the Targeted Investment Program (TIP) in December 2008 to prevent a loss of 

confidence in certain financial institutions during the crisis, which could have resulted in significant 

financial market disruptions. This could have threatened the financial strength of similarly situated 

financial institutions and undermined the overall economy.

Under the program, Treasury invested $20 billion in Bank of America Corp. (Bank of America) and 

another $20 billion in Citigroup Inc. (Citigroup). These investments were made in addition to those 

that these banks received under the CPP. Similar to the CPP, Treasury invested in preferred stock, 

and received warrants to purchase common stock in each institution under the terms of the TIP.

 

12 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Dividends-and-Interest-Reports.aspx

13 Of this amount, approximately $363.3 million ($355.7 million from principal and $7.6 million from warrants) represented 

exchanges by 28 banks of investments under the CPP into the CDCI.

Community Development Capital Initiative

Targeted Investment Program
Page | 9

Where Things Stand

In December 2009, both Bank of America and Citigroup repaid their TIP investments in full.

Treasury received $3 billion in dividends under the program. Treasury also received warrants from 

each bank, which provided taxpayers with $1.43 billion in additional gains on their TIP investments.

The program is now closed and resulted in a positive return of $4 billion for taxpayers.

The Asset Guarantee Program (AGP) was established in late 2008. Conducted jointly by Treasury, 

the Federal Reserve, and the FDIC, the AGP was used in conjunction with other forms of emergency 

assistance provided under TARP. Like the TIP, the AGP was designed for financial institutions 

whose failure could harm the financial system and reduce the potential for spillover to the broader 

financial system and economy.

Two institutions were given assistance under the AGP – Bank of America14 and Citigroup. They were 

selected because of the large number of illiquid assets that both of them held at the time of the 

financial crisis. Their failures would likely have had a severe impact on the broader financial system.

The AGP helped these institutions maintain the confidence of depositors and other funding sources 

to continue meeting the credit needs of households and businesses.

On December 28, 2012, Treasury received Citigroup trust preferred securities and approximately 

$183 million in associated dividend and interest payments. Treasury sold those securities in

February 2013 for $894 million15, in addition to receiving another $16 million in dividend and 

interest payments in January 2013. These transactions added to the positive return that taxpayers 

have received from their investment in Citigroup under TARP. Since Citigroup made no claims for 

loss payments to the government and Treasury made no guarantee payments of TARP funds to 

Citigroup, all payments and income received from the sale of securities have constituted a net gain to 

taxpayers. The AGP is now closed and has so far resulted in a positive return of more than $4 billion.

In 2009, Treasury worked with federal banking regulators to develop a comprehensive "stress 

test" known as the Supervisory Capital Assessment Program (SCAP). The purpose of the SCAP was 

to determine the health of the nation’s 19 largest bank holding companies. This forward-looking 

stress test provided unprecedented levels of transparency and helped to restore confidence in the 

banking system.

 

14 In May 2009, before the transaction was finalized, Bank of America decided to terminate negotiations, and in September 

2009, the government and Bank of America entered into an agreement under which Bank of America agreed to pay a 

termination fee of $425 million to the government, $276 million of which went to Treasury. The fee compensated the 

government for the value that Bank of America had received from the announcement of the government's willingness to 

guarantee and share losses on the pool of assets from and after the date of the term sheet. No TARP funds were spent. As a 

result, this fee was a net gain to taxpayers.

15 Since this sale occurred after December 31, 2012, it is not reflected in the graphs and charts throughout this report.

Asset Guarantee Program

Capital Assistance Program
Page | 10

In conjunction with the SCAP, Treasury announced that it would provide capital under TARP 

through the Capital Assistance Program (CAP) to those institutions that needed additional capital 

but were unable to raise it through private sources. The CAP was offered to all banks and qualifying 

financial institutions, not solely to those banks that had been subject to the SCAP.

Only one TARP institution, Ally Financial (formerly GMAC), required additional funds under TARP 

to meet its SCAP requirements but received them through the Automotive Industry Financing 

Program, not the CAP. The CAP closed on November 9, 2009 without making any investments and 

did not incur any losses to taxpayers. Following the release of the stress test results, banks were able 

to raise hundreds of billions of dollars in private capital.
Page | 11

Credit Market Programs

TARP’s credit market programs played a key role in helping to restart the markets that provide financing 

for auto loans, credit cards, mortgages, and small business lending. 

In 2008, the government took forceful action to restart credit markets that had come under severe 

stress during the financial crisis. In particular, three programs were launched under TARP:

 The Legacy Securities Public-Private Investment Program (PPIP), which helped bring 

private capital back into the market for non-agency residential and commercial mortgagebacked securities;

 The Small Business Administration 7(a) Securities Purchase Program (SBA 7(a) Program), 

which provided added liquidity to the market for small business lending; and 

 The Term Asset-Backed Securities Loan Facility (TALF), a joint program with the Federal 

Reserve Bank of New York (FRBNY) that helped to restart the markets that provide credit to 

consumers and small businesses.

Although the specific implementation methods were different for each program, the overall goal of 

each one was the same—to restart the flow of credit to meet the critical financing needs of small 

businesses and consumers. These credit market programs under TARP, combined with additional 

measures taken by the Obama Administration, helped ensure that various types of consumer and 

small business loans remained available in the immediate aftermath of the financial crisis and in the 

years since. 

In 2012, OFS made considerable progress winding down TARP’s credit market programs. The SBA 

7(a) Program closed with a small positive return. Treasury’s credit protection for TALF was reduced 

during 2012 and subsequently eliminated in January of 2013. Five of the investment funds under 

PPIP were wound down, leaving four remaining. Of the approximately $19 billion that was invested 

through these programs, Treasury has now reduced the amount outstanding for taxpayers to $3.6

billion. The status of each is described below.

Treasury launched PPIP to support credit market functioning and facilitate price discovery in the 

markets for commercial and residential mortgage financing. Using TARP funds alongside equity 

capital raised from private investors, PPIP was designed to generate a significant purchasing power 

and demand for troubled non-agency residential mortgage-backed securities (RMBS) and commercial 

mortgage-backed securities (CMBS).

PPIP originally consisted of nine public-private investment funds (PPIFs). These funds were 

established by private sector fund managers to purchase eligible legacy RMBS and CMBS from 

banks, insurance companies, mutual funds, pension funds, and other eligible sellers as defined under 

EESA. In implementing the program, fund managers established meaningful partnership roles for 

small, minority, veteran‐, and women‐owned businesses. These roles include, among others, asset 

management, capital-raising, broker‐dealer, investment sourcing, research, advisory, cash 

management, and fund administration services. Collectively, the PPIP fund managers established 10 

Legacy Securities Public-Private Investment Program (PPIP)
Page | 12

unique relationships with leading small, minority, veteran-, and women-owned financial services 

businesses. 

Since it was launched in 2009, PPIP has helped to restart the market for these securities by drawing 

in new, private capital. This in turn has helped more credit become available to consumers and small 

businesses.

Where Things Stand

At the close of 2012, the PPIFs had drawn down $24.9 billion of the total original capital committed 

(83 percent of total original purchasing power), which has been invested in eligible assets and cash 

equivalents. The investment period had ended for all PPIFs and Treasury had received 

approximately 93 percent of its original $18.6 billion investment, including interest income, gains,

and repayments of debt and equity capital. 

Treasury’s original $18.6 billion investment was fully recovered in January 2013 and taxpayers have 

received a positive return of $331 million through equity and debt repayments, interest, and 

proceeds in excess of original equity capital, including warrant proceeds.

16 Treasury expects PPIP to 

result in more than $2 billion of positive returns for taxpayers.

The following is a summary of the status of individual PPIFs as of December 31, 201217:

Although the program was designed so that funds could remain invested until 2019, the program’s 

success has led the asset managers to wind down the funds earlier than originally expected. Five of 

these funds – UST/TCW Senior Mortgage Securities Fund, L.P.; Invesco Legacy Securities Master 

Fund, L.P.; AllianceBernstein Legacy Securities Master Fund, L.P.; RLJ Western Asset 

Public/Private Master Fund, L.P.; and Blackrock PPIF, L.P. – have already been wound down and 

exited the program, providing a gain to taxpayers. Four others – AG GECC PPIF Master Fund, L.P.;

Marathon Legacy Securities Public-Private Investment Partnership, L.P.; Oaktree PPIP Fund, 

 

16 Any returns received in January 2013 are not included in the charts in this report.

17 Includes both public and private funds.

PPIFs (in billions as of December 31, 2012) Total 

Obligations

Amount 

Outstanding

Total Cash 

Back

Alliance Bernstein $ 3.28 $ 0.00 $ 3.74

Angelo, Gordon & Co., LP and GE Capital Real Estate $ 3.48 $ 0.72 $ 2.89

BlackRock, Inc $ 1.75 $ 0.00 $ 2.01

Invesco Ltd. $ 1.74 $ 0.00 $ 1.90

Marathon Asset Management, LP $ 1.42 $ 0.74 $ 0.76

Oaktree Capital Management, LP $ 3.48 $ 0.77 $ 0.95

RLJ Western Asset Management, LP $ 1.86 $ 0.00 $ 2.33

The TCW Group, Inc $ 0.36 $ 0.00 $ 0.38

Wellington Management Company, LLP $ 3.45 $ 1.37 $ 2.29

Total $ 20.82 $ 3.59 $ 17.24
Page | 13

L.P.; and Wellington Management Legacy Securities PPIF Master Fund, LP – have made 

substantial progress in doing so. 

Treasury produces a PPIP quarterly report18 that provides detailed information on the funds and

their investments and returns. It is typically released several weeks after the end of each quarter.

Treasury launched the SBA 7(a) Program as part of the Obama Administration’s efforts to help 

small businesses in the wake of the financial crisis. This program was aimed at helping the 

secondary market for small business loans recover and free up credit for small businesses. 

Under this program, Treasury purchased securities comprised of the guaranteed portion of SBA 7(a) 

loans, which finance a wide range of small business needs, including working capital, machinery, 

equipment, furniture, and fixtures. This enabled small businesses across the country to continue 

their day-to-day operations and making investments needed to grow. 

From March through September of 2010, Treasury made open market purchases from participating 

pool assemblers of SBA 7(a) securities. Through its purchases, Treasury injected much needed 

liquidity into this market to help restart the flow of credit, enabling pool assemblers to purchase 

additional small business loans from loan originators. Since Treasury began its purchases, the SBA 

7(a) market has recovered with new SBA 7(a) loan volumes returning to pre-crisis levels.

Where Things Stand

On January 24, 2012, Treasury completed the fifth and final disposition of securities within the SBA 

7(a) Securities Purchase Program,

19 marking the successful wind down of the program. Treasury 

collected a total of $376 million through the program. These cash collections exceeded Treasury’s 

original investment amount by $9 million.

20

The SBA 7(a) Program is now closed.

The third credit market program under TARP is the Term Asset-Backed Securities Loan Facility 

(TALF). TALF supported the issuance of nearly 3 million auto loans, more than 1 million student 

loans, nearly 900,000 small business loans, 150,000 other types of business loans, and millions of 

credit card loans.

Under TALF, the FRBNY lent funds to investors of these types of securities. By encouraging the 

issuance of ABS and CMBS, TALF helped support the economy by increasing credit availability to 

American households and businesses. 

 

18 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Public-Private-Investment-Program-QuarterlyReport.aspx

19 Additional information can be found at : http://www.treasury.gov/press-center/press-releases/Pages/tg1398.aspx

20 Treasury originally invested a total of $367 million, excluding purchased accrued interest.

SBA 7(a) Securities Purchase Program

Term Asset-Backed Securities Loan Facility
Page | 14

As part of the program, Treasury originally pledged $20 billion in credit protection through TARP 

against potential losses on TALF loans. In light of repayments over time and the reduction in the 

number of TALF loans outstanding, Treasury’s credit protection commitment was subsequently 

reduced to $4.3 billion in June 2010 and to $1.4 billion in June 2012. 

Where Things Stand

As of December 31, 2012, the accumulated fees collected through TALF ($856 million)21 exceeded the 

total principal amount of TALF loans outstanding ($556 million). Therefore, in January 2013, 

Treasury and the Federal Reserve determined that Treasury’s commitment of TARP funds to provide 

credit protection was no longer considered necessary. In addition, the early repayment of TALF loans 

has allowed the $100 million in temporary loans that Treasury made over the course of the program 

under its credit protection commitment to be repaid in full with $13 million in interest.

TALF remains a joint Treasury-Federal Reserve program. Given that Treasury’s investment has 

been repaid in full with interest, each additional dollar Treasury collects through TALF going

forward represents an additional gain for taxpayers. The final TALF loan is scheduled to mature on 

March 30, 2015. All loans remain well collateralized and current in payments of principal and 

interest. Treasury and the FRBNY do not expect any cost to taxpayers from TALF.

 

 

 

21 This amount includes the original $100 million in temporary loans that Treasury made during the program as part of its 

credit protection commitment. 
Page | 15

Automotive Industry Financing Program

TARP prevented a collapse of the American automotive industry, saving an estimated one million jobs. 

Today GM and Chrysler are more competitive and viable companies. Moreover, since June 2009, the auto 

industry has added more than a quarter of a million new jobs. 

The Automotive Industry Financing Program (AIFP) was launched under TARP to prevent a 

collapse of the American automotive industry. The severe condition of the industry at that time 

posed a significant risk to financial market stability and threatened the overall economy.

It began in December 2008 when President Bush extended short-term emergency loans to GM and 

Chrysler. These two automakers were the most severely impacted by the crisis. When President 

Obama took office, he decided to provide additional investment only if the companies engaged in 

fundamental restructuring. Both companies were required to develop plans to achieve long-term 

viability, under which all stakeholders, including unions, dealers, creditors, and others, would make 

substantial sacrifices. 

Treasury provided nearly $80 billion in loans and 

equity investments under the AIFP. Assistance was 

provided to GM, Chrysler, and their financing entities. 

Treasury also provided loans to ensure that auto 

suppliers would be compensated for their parts and 

services that had already been purchased by the auto 

companies.

While the industry continues to face challenges, GM, 

Chrysler, and Ford have returned to profitability. An 

estimated one million jobs were saved by the assistance 

provided under TARP. This assistance made it possible 

for them to restructure and compete more effectively. 

As a result, since 2009 the auto industry has continued 

to rebound. 

Of the approximately $80 billion that was provided to 

the auto industry under TARP, Treasury has now 

recovered $46.40 billion. As of December 31, 2012, 

Treasury held 300.1 million shares of GM common stock, representing approximately 22 percent (or 

less than 19 percent on a fully diluted basis) of the outstanding shares of common stock in the 

company. Treasury also held 74 percent of the common equity and $5.9 billion of mandatorily 

convertible preferred stock in Ally. Treasury has already exited its investments in Chrysler and 

Chrysler Financial.

The process of rescuing GM and Chrysler was done through the standard procedures of the nation’s 

bankruptcy courts and both restructurings were found to have been conducted in accordance with 

well settled law. 

While the cost of the auto industry’s rescue under TARP will not be known until the remaining 

investments are liquidated, it is currently projected to cost $20.26 billion. However, the cost of 

disorderly liquidations of GM and Chrysler, and the effects those would have had on the industry 

and the nation as a whole would have been far higher. 
Page | 16

Treasury provided approximately $50 billion of TARP funds to GM in 2008 and 2009. Since then, GM 

has gone through a managed bankruptcy and is now a more competitive company. Treasury’s 

investment in GM was originally made in the form of loans, some of which were subsequently 

converted into common and preferred stock. Treasury currently holds only common stock.

Where Things Stand

By the end of 2012, Treasury had sold more than two-thirds (612 million) of the 912 million shares of 

GM common stock it originally held. In December 2012, Treasury announced its intention to fully 

exit its remaining GM investment within 12-15 months, subject to market conditions. OFS believes 

that moving to exit the remaining GM investments within this timeframe is consistent with 

Treasury’s dual goals of winding down TARP as soon as practicable and protecting taxpayer 

interests.

The first step in that plan took place on December 21, 2012, when GM purchased 200 million shares 

of the company’s common stock from Treasury at $27.50 per share for a total of $5.5 billion.

22 This 

repurchase reduced Treasury’s total number of remaining shares of GM common stock to 300.1 

million. The disposition of those common shares began in January 2013 pursuant to a pre-arranged 

written trading plan. The manner, amount, and timing of the sales under the plan are subject to 

market conditions. 

Treasury committed a total of $12.4 billion to Chrysler under TARP.

The Obama Administration determined that Chrysler could achieve viability by partnering with the 

international car company Fiat. As part of the planned restructuring, in April 2009, Chrysler filed 

for bankruptcy protection. In May 2009, Treasury provided $1.9 billion to Chrysler (Old Chrysler) 

under a debtor‐in‐possession financing agreement for assistance during its bankruptcy proceeding.

In June 2009 a newly formed entity, Chrysler Group LLC (New Chrysler) acquired most of Old 

Chrysler’s assets through a court-authorized sale. Since then, Chrysler has lowered its structural 

costs, adopted new technologies, rejuvenated its product line, and rebuilt its brands. 

Where Things Stand

In July 2011, Treasury fully exited its investment in Chrysler, six years ahead of schedule. Of the 

$12.4 billion disbursed to Chrysler under TARP, Treasury recovered more than $11.1 billion for 

taxpayers through principal repayments, interest, and cancelled commitments. Treasury is unlikely 

to fully recover the difference of $1.3 billion owed by Old Chrysler. 

 

22 Additional information can be found in Treasury’s press release: http://www.treasury.gov/press-center/pressreleases/Pages/tg1810.aspx

General Motors

Chrysler
Page | 17

Treasury also made a $17.2 billion investment in Ally Financial (formerly GMAC) under TARP. The 

company has been the primary source of financing for GM’s dealers and consumers for more than 90 

years. Subsequently, after Treasury’s investment, Ally became a primary source of financing for 

Chrysler dealers. Supporting Ally made it possible for GM and Chrysler dealers to continue 

providing car loans to their customers and secure financing to run their businesses during the 

financial crisis. 

As of December 31, 2012, Treasury had recovered approximately one-third ($5.8 billion) of its

original $17.2 billion investment. Treasury expects to begin monetizing its remaining investment as 

the company completes two critical strategic initiatives: the Chapter 11 proceeding for its mortgage 

subsidiary, Residential Capital, LLC (ResCap) and the sale of its international auto finance 

operations. In November 2012, Ally announced that it had reached an agreement to sell its 

remaining international operations and that it expected total proceeds from those transactions of 

$9.2 billion.

Where Things Stand

On May 14, 2012, Assistant Secretary Timothy Massad issued a statement on the ResCap Chapter 

11 filing in which he stated that by addressing the legacy mortgage liabilities at ResCap, which are 

old loans made during the days before the housing bubble burst, taxpayers will be in a stronger 

position to recover their remaining investment in Ally.

23

By the end of 2012, ResCap had made significant progress toward bringing its Chapter 11 

bankruptcy proceedings to a successful conclusion. Ally’s sales of its international operations are also 

due to close at various times over the course of 2013. 

As these two key initiatives are completed, Treasury will be able to recover more of its remaining 

investment through sales of its stock (either through public or private sales) or through further sales 

of assets. How those sales options develop will depend on the progress of Ally’s two strategic 

initiatives, market conditions, and other factors. 

 

23 The full statement by Assistant Secretary Massad can be accessed at: http://www.treasury.gov/connect/blog/Pages/PuttingTaxpayers-in-a-Stronger-Position-to-Continue-Recovering-Their-Investment-in-Ally-Financial.aspx

Ally Financial
Page | 18

Investment in American International Group (AIG)

Treasury and the Federal Reserve provided assistance to AIG because the consequences of a company of 

its size and scope failing at that time, in those circumstances, would have had far-reaching and 

catastrophic consequences for the economy and American families and businesses. By the end of 2012, 

Treasury had sold its final shares of AIG common stock. Moreover, Treasury and the Federal Reserve fully 

recovered the original $182 billion commitment made to stabilize the company during the financial crisis –

plus an additional positive return of $22.7 billion.
Page | 19

During the financial crisis, Treasury and the Federal Reserve committed approximately $182 billion 

to prevent the collapse of AIG. That amount included $70 billion24 that Treasury committed through 

TARP as well as $112 billion committed by the FRBNY.

At the time, AIG was the largest provider of conventional 

insurance in the world. Millions of Americans depended on it for 

their life savings and it had a substantial presence in many 

critical financial markets, including municipal bonds. 

The same pressures that caused the failure of Lehman Brothers 

in September 2008 brought AIG to the brink of collapse. It 

became clear that AIG had massive liquidity needs and was 

facing the potential for huge losses. Imprudent risk-taking 

during better times in the years preceding the financial crisis 

meant that when the financial cycle turned downward, AIG had hundreds of billions of dollars in 

commitments without the assets to back them up. As AIG teetered on the brink of bankruptcy, 

confidence in the financial system as a whole was eroding. Firms were trying to shore up their 

balance sheets by selling risky assets and hoarding cash.

Panic began spreading and pressures spilled over to virtually all credit markets. These events had 

immediate economic consequences for all Americans, potentially affecting everything from public 

works projects by state and local governments to school construction, hospital operations, and the 

transportation of goods throughout the country. Therefore, over the following six months, Treasury 

and the FRBNY took a series of steps to prevent AIG’s disorderly failure and mitigate risks to the 

financial system and the broader economy. 

Where Things Stand

At the time the government provided assistance to AIG, most people thought that those funds would 

not be recovered. However, since the financial crisis, AIG has dramatically restructured, enabling it 

to fully repay taxpayers. The size of the company has been cut nearly in half as it sold non-core 

assets and focused on its core insurance operations. AIG's Financial Products unit is continuing to be 

wound down and has cut its legacy derivatives exposure by more than 90 percent to date. 

As a result of the combined efforts of AIG, Treasury, and the Federal Reserve, the $182 billion 

committed to stabilize the company has been fully recovered – plus an additional positive return of 

$22.7 billion. Treasury continues to hold warrants to purchase approximately 2.7 million shares of 

AIG common stock – the sale of which will provide an additional positive return to taxpayers. 

Treasury will continue to wind down its remaining investment related to AIG in a way that balances 

exiting as soon as practicable with maximizing value for taxpayers.

 

24 $2 billion of which was never drawn.

―Congress granted the Federal 

Reserve emergency authority 

precisely so that the government 

had some capacity to act to 

contain a systemic financial crisis. 

To not to have used that authority 

at that time would have been 

deeply irresponsible.‖

Secretary Timothy Geithner on the 

government’s rescue of AIG

January, 2010
Page | 20

Housing Initiatives Under TARP

 

Treasury, in collaboration with the U.S. Department of Housing and Urban Development (HUD) and the 

Federal Housing Finance Agency (FHFA), established several programs to help struggling homeowners 

avoid foreclosure. So far, there have been nearly 1.5 million homeowner assistance actions through these 

programs, These programs have also set new standards across the mortgage servicing industry that 

have indirectly helped millions more. 

In February 2009, President Obama announced a number of steps to strengthen the housing market 

and help struggling homeowners avoid foreclosure. As part of this broad response to the housing 

crisis, Treasury under TARP established two central programs, Making Home Affordable®

(MHA) and the Hardest Hit Fund® (HHF).

Launched in February 2009, MHA consists of several programs designed to help 

struggling homeowners prevent avoidable foreclosures. MHA’s principal 

component is the Home Affordable Modification Program (HAMP®). As the 

housing crisis evolved, Treasury launched several specialized programs to help 

homeowners find a solution that is right for their situation. 

Through December 31, 2012, there were nearly 1.5 million homeowner assistance 

actions granted through MHA, consisting of first-and second-lien permanent 

modifications, Home Affordable Foreclosure Alternatives (HAFA) transactions, and Unemployment 

Program (UP) forbearance plans. During 2012 there were more than 430,000 actions taken under 

MHA to help families prevent a possible foreclosure.

Making Home Affordable® (MHA) 
Page | 21

Home Affordable Modification Program (HAMP)®

The cornerstone of MHA is the Home Affordable Modification Program (HAMP)

®, which 

permanently modifies first-lien mortgages for eligible borrowers to a more affordable monthly 

payment to prevent a foreclosure. HAMP helps homeowners who face a serious financial hardship, 

have a high debt-to-income ratio, and demonstrate the ability to sustain their monthly mortgage 

payments after a modification has been granted. 

As of December 31, 2012, more than 1.1 million homeowners have received 

permanent HAMP modifications. Homeowners in active HAMP permanent 

modifications typically save more than $500 per month, which is more than 

one-third of what they were paying before their modification. Since HAMP 

began, homeowners in permanent modifications have saved an estimated 

$17.3 billion in monthly mortgage payments.

OFS also implements two smaller programs within HAMP – the Principal 

Reduction Alternative (PRA) and the Second Lien Modification Program 

(2MP).

Principal Reduction Alternative (PRA)

Under the PRA, servicers of non-government sponsored enterprises (GSE) loans are required to 

evaluate the benefit of principal reduction for mortgages with a loan-to-value ratio of 115 percent or 

greater when evaluating a homeowner for a HAMP first-lien modification. Although servicers are not

required to reduce principal as part of the modification, the program provides incentives for them to 

do so. 

As of December 31, 2012, there had been more than 118,000 permanent HAMP modifications with 

some form of principal reduction. These modifications typically reduced the principal amount by 

$66,719 or nearly one-third of the principal balance before modification.

Second Lien Modification Program (2MP)

Many homeowners have had their first liens modified but continue struggling 

to keep up with payments for a second lien on the same property. Under the 

2MP, Treasury provides incentives for second-lien holders to modify or 

extinguish these mortgages when the first-lien mortgage for the same 

property has been permanently modified under HAMP.

As of December 31, 2012, more than 103,000 homeowners in a permanent 

first-lien modification under HAMP had received assistance through 2MP. 

Homeowners in 2MP typically save nearly $817 per month on their combined

first and second lien monthly mortgage payments. More than 50 percent of the borrowers benefiting 

from 2MP reside in three states: California (36 percent), Florida (nine percent), and New York (seven 

percent).

Setting New Standards

HAMP’s impact has gone far beyond the number of homeowners who have received direct assistance 

under the program. It has set new standards and changed industry practices in fundamental ways, 

and thereby helped millions more families stay in their homes. 
Page | 22

There were very few private modifications taking place before HAMP was launched. Many of those 

that occurred did not lower payments.

25 This is because there were no standards in the mortgage 

industry as to how to make modifications affordable and sustainable. HAMP provided such 

standards. These include using a target debt-to-income ratio as the standard for determining an 

affordable mortgage payment and a net present value test to determine whether the modification 

makes economic sense for the holder of the mortgage. Partly as a result of these new standards, the 

proportion of private loan modifications that reduce monthly payments for homeowners has more 

than doubled. Together, public and private efforts have helped approximately six million Americans 

get mortgage assistance to prevent avoidable foreclosures. 

HAMP has also set important new consumer protection standards. Before HAMP, the mortgage 

industry was ill-equipped to handle the overwhelming number of homeowners in need of assistance.

To address this shortcoming, Treasury required mortgage servicers that volunteered to participate in 

HAMP to overhaul their operations and adopt new practices for assisting homeowners seeking help. 

These include:

 Requiring the largest participating mortgage servicers to establish a single point of contact 

(SPOC) for homeowners who are potentially eligible for MHA to ensure that a single, 

knowledgeable case manager can guide them through the entire application and resolution

process. On November 14, 2012, Treasury released a special report detailing the steps 

Treasury and other federal agencies have taken to get the mortgage industry to improve 

customer service in the MHA program, including through SPOC requirements.

26

 Requiring participating mortgage servicers to limit the practice of ―dual tracking‖ – where 

mortgage servicers begin the foreclosure process while simultaneously evaluating 

homeowners for assistance; and 

 Requiring participating mortgage servicers to provide qualified unemployed homeowners 

with a forbearance period of up to 12 months, subject to investor and regulator guidelines,

during which their monthly payments are temporarily reduced or suspended while they look 

for work.

MHA continues to maintain a comprehensive compliance program to make sure that participating 

servicers are following the program’s guidelines with respect to how they evaluate and assist 

homeowners. In 2011, Treasury expanded its public reporting to disclose how participating mortgage 

servicers are complying with program guidelines. Treasury provides information about servicer 

performance through two types of data:

 Quarterly compliance data, which reflects servicer compliance with specific MHA guidelines; 

and

 Program results data, which reflects how timely and effectively servicers assist eligible 

homeowners and report program activity.

 

25 At the end of 2008, the Office of the Comptroller of the Currency (OCC) reported that the majority of loan modifications 

made that year did not reduce monthly payments. Nearly 27 percent resulted in unchanged monthly payments, and about 32 

percent increased monthly payments. More information can found at: http://www.occ.gov/publications/publications-bytype/other-publications-reports/mortgage-metrics-q4-2008/index-mortgage-metrics-q4-2008.html

26 The full report can be accessed at: http://www.treasury.gov/initiatives/financialstability/reports/Documents/SPOC%20Special%20Report_Final.pdf. 
Page | 23

The following three charts show how participating servicers have performed on three key metrics. 

The results show that servicers are focusing attention on areas identified in previous program 

reviews and, as a result, are demonstrating continued improvement in program implementation.

 The first chart shows the percentage of loans where the servicer assessment did not concur 

with those of Treasury’s compliance agent for MHA (MHA-C).

 The second chart shows the percentage of loans where MHA-C was unable to draw a 

conclusion on the servicer’s MHA determination.

 The third shows the percentage of loans for which MHA-C’s income calculation differs from 

that of the servicer’s by more than five percent.

Settlement with Mortgage Servicers

MHA’s mortgage servicing standards also served as the basis for the National Mortgage Settlement 

between 49 state attorneys general, the Federal Government, and the country’s five largest mortgage 

loan servicers (Ally/GMAC, Bank of America, Citigroup, JPMorgan Chase, and Wells Fargo).

The settlement was intended to provide as much as $25 billion in relief to distressed borrowers and 

direct payments to states and the Federal Government. The agreement settled certain alleged 

violations of state and federal law based on the mortgage loan servicing activities of the country’s 

five largest mortgage loan servicers, including claims of document-related foreclosure abuses. 

Treasury provided advice during the settlement negotiations and shared knowledge gained through 

implementation of the Administration’s foreclosure prevention programs, including MHA. 

MHA’s borrower protections have been widely adopted by the industry and were included as part of 

the national mortgage settlement. They have also served as the basis for rules being developed by

the Consumer Financial Protection Bureau (CFPB) and scheduled to become effective in 2013. MHA 

has also helped to standardize short sale procedures with the GSEs, creating a legacy of new 

standards that the CFPB will be responsible for monitoring in the future.

Additional information can be found at the dedicated website established by the attorneys general on 

the Executive Committee who negotiated the settlement.

27

 

27 http://nationalmortgagesettlement.com/

0%

2%

4%

6%

Q4 Q1

2011

Q2 Q3 Q4 Q1

2012

Q2 Q3

Average Second Look 

Percent Disagree

Benchmark

Average

0%

5%

10%

15%

Q4 Q1

2011

Q2 Q3 Q4 Q1

2012

Q2 Q3

Average Second Look

Percent Unable to Determine

0%

5%

10%

15%

20%

25%

Q4 Q1

2011

Q2 Q3 Q4 Q1

2012

Q2 Q3

Average Income 

Calculation Error Percentage
Page | 24

Home Affordable Foreclosure Alternatives Program (HAFA)

For some homeowners, a mortgage modification is not the right solution. To help these homeowners, 

Treasury developed the Home Affordable Foreclosure Alternatives Program (HAFA) so they can still 

avoid foreclosure. HAFA’s goal is to help homeowners exit their homes and transition to a more 

affordable living situation through a short sale or deed-in-lieu of foreclosure. HAFA provides a 

defined process along with incentives to encourage these transactions. 

As of December 31, 2012, more than 124,000 homeowners had reached agreements with their 

servicer to exit their home under the HAFA Program. More than 101,000 had completed a short sale 

or deed-in-lieu of foreclosure. HAFA provides $3,000 for relocation assistance after a homeowner 

exits their home.

Home Affordable Unemployment Program (UP)

Treasury has also developed a program to provide temporary relief for homeowners who struggle to 

keep up with their mortgage payments as a result of losing their job. The Home Affordable 

Unemployment Program (UP) requires participating servicers to grant qualified unemployed 

borrowers a forbearance period during which their mortgage payments are temporarily reduced or 

suspended while they look for employment. At the end of this forbearance period, if the homeowner 

receives a HAMP modification, the forborne amount is capitalized onto the unpaid principal balance.

As of December 31, 2012, more than 30,000 UP forbearance plans had been started.

Homeowner Outreach

Treasury has continued its outreach initiatives to help homeowners who may be eligible for 

assistance through MHA and other programs. 

―Help for Homeowners‖ Outreach Events

During 2012, Treasury, along with its partners at HUD conducted 18 ―Help for Homeowners‖ 

outreach events across the country. These events provided struggling homeowners with the 

opportunity to speak directly with their mortgage servicer and trained housing counselors to learn 

more about the options that are available to them. Many of these events also include roundtable 

discussions with local leaders on broader issues facing the housing market. 

As of December 31, 2012, there had been a total of 80 ―Help for Homeowners‖ outreach events in 

more than 50 cities. These events have been attended by more than 70,000 homeowners. 
Page | 25

Homeowner Outreach Events by Metropolitan Area as of December 31, 2012

Foreclosure Prevention Assistance Campaign

On December 12, 2012, Treasury, HUD, and the Ad Council unveiled the third and final phase of the 

Foreclosure Prevention Assistance Public Service Advertising (PSA) campaign. The campaign is 

intended to increase awareness of the MHA program’s free resources and assistance for struggling 

homeowners. The PSAs, which are available in English and Spanish, direct homeowners to visit 

MakingHomeAffordable.gov or call 888-995-HOPE (4673) for free access to HUD-approved housing 

experts who are available to speak one-on-one about solutions based on each family's individual 

circumstances — 24 hours a day, 7 days a week.28

 

28 For additional information and to view videos from the PSA campaign, please visit: 

http://www.makinghomeaffordable.gov/about-mha/psa-campaigns/Pages/default.aspx

Metropolitan Area Number of Events Metropolitan Area Number of Events

1 South Florida 6 6 Boston 3

2 Phoenix 5 7 Detroit 3

3 Washington, DC 5 8 Las Vegas 3

4 Atlanta 4 9 New York City 3

5 San Francisco Bay Area 4 10 Sacramento 3

Top 10 Metropolitan Areas by Number of Events
Page | 26

In early 2012, the Obama Administration announced several enhancements to MHA, which included 

the following:

Extending the MHA Deadline

To help more eligible homeowners enter the program, Treasury extended the application deadline for 

borrowers to participate in MHA until December 31, 2013. This is a one-year extension from the 

previous deadline. It also conforms to the extended deadline for the Home Affordable Refinance 

Program (HARP), which is a program established by the FHFA to help underwater borrowers 

refinance their mortgages. 

Expanding Eligibility

The program’s eligibility criteria were also expanded to help reach people who are struggling with 

additional debt such as second liens and medical bills. To achieve this, MHA now offers another 

evaluation opportunity with more flexible debt-to-income criteria.

Eligibility has also been extended to include properties that are currently occupied by a tenant or 

which the borrower intends to rent since rental properties are an important source of affordable 

housing for many communities. 

Increasing Incentives for Principal Reduction

In early 2012, Treasury included a number of provisions to further encourage investors to consider 

reducing principal on mortgage modifications. These include:

 Tripling the incentives to investors for principal reduction on first liens – incentives under 

the new structure range from 18 to 63 cents on the dollar, depending on the delinquency 

status of the loan and the loan-to-value ratio; 

 Doubling incentives for principal extinguishment on second liens – incentives under the new 

structure range from 12 to 42 cents on the dollar; and

 Offering principal reduction incentives for loans insured or owned by the GSEs.

29

Seventy-one percent of all eligible non-GSE loans entering HAMP in December 2012 included a

principal reduction feature. Additional information and details about the MHA expansion and 

extension can be found in a statement by Assistant Secretary Timothy Massad,

30 originally 

published on January 27, 2012.

 

29 The FHFA has since declined to offer these principal reduction incentives. 

30 http://www.treasury.gov/connect/blog/Pages/Expanding-our-efforts-to-help-more-homeowners-and-strengthen-hard-hitcommunities.aspx

MHA Enhancements
Page | 27

The second major housing initiative under TARP is the Hardest Hit Fund (HHF) ®. This program 

allows participating states’ housing finance agencies (HFAs) in the nation’s hardest hit housing and 

unemployment markets to design innovative, locally-targeted foreclosure prevention programs. 

Treasury provides funds to participating HFAs so states can design and implement programs that 

meet their needs. 

HHF Program Update

When the program began, states needed time to build their operations and refine their processes. 

Through HHF, participating states have created from scratch their own servicing centers to directly 

handle homeowner applications, evaluate homeowners for assistance, and provide support to 

homeowners transitioning from one type of assistance to another. Since then, Treasury has worked 

closely with all key stakeholders including state HFAs, mortgage servicers, the GSEs, and the FHFA 

to encourage them to work together to reach more homeowners through HHF programs. 

Treasury has also held yearly HHF summits, most recently in September 2012, to facilitate the 

sharing of best practices and lessons learned among participating HFAs. There was substantial 

growth in the HHF in 2012, both in the numbers served and the dollars spent. With recent program 

and operational changes made by HFAs working closely with Treasury, OFS expects the pace of 

assistance to continue to accelerate throughout 2013.

As of December 31, 2012, all 18 states and the District of Columbia were operating HHF programs

statewide and collectively had drawn $1.76 billion (approximately 23 percent) of the $7.6 billion 

allocated under the program. Each state draws down funds as they are needed. States have until 

December 31, 2017 to expend funds and must have exhausted at least 95 percent of their allocation 

before they can draw down additional funds.

Hardest Hit Fund Disbursements (2011 & 2012)

Hardest Hit Fund®
Page | 28

The most recent available performance reports indicate that participating HFAs have now assisted 

more than 77,000 homeowners.

31 They continue to innovate, develop new programs, and adapt 

existing programs to help homeowners amid changing market and economic conditions. 

During 2012, Treasury approved several program changes submitted by state HFAs. Some examples 

include:

 Programs launched in both Arizona and Nevada that provide unmatched principal reduction 

in conjunction with a mortgage refinance, such as those provided through HARP;

 Programs in Arizona and California that provide unmatched principal reduction in 

conjunction with a loan recast or modification; and

 Programs in several states that are enabling modifications or recast loans in order to help 

homeowners achieve a lower payment. These programs are now available in Illinois, Ohio, 

Michigan, and South Carolina. 

Treasury also continues to support the Federal Housing Administration (FHA) Short Refinance 

Program. Under this program, eligible borrowers who are current on their mortgage or complete a 

trial payment plan but owe more than their home is worth, can refinance into an FHA-insured loan 

if the lender writes off at least 10 percent of the existing loan. 

Approximately $8.1 billion of TARP funds are committed to cover a share of losses on the refinanced 

loans. Additional TARP funds are available to provide incentive payments to extinguish second lien 

mortgages in order to facilitate refinancing of the first liens. As of December 31, 2012, there has not 

been substantial activity under the FHA Short Refinance Program and no disbursements for loss 

claim payments under the program have been made.

 

31 The most recent available performance reports are through September 30, 2012. 

FHA Short Refinance Program
Page | 29

Restoring the Nation’s Financial Stability

The following is a brief discussion of why TARP was necessary and what it accomplished alongside 

the Federal Reserve and the FDIC’s additional emergency measures. Additional information can be 

found in the TARP Two-Year Retrospective Report32 and the 2012 Annual Report of the Financial 

Stability Oversight Council (FSOC).

33

Why TARP was Necessary

TARP was launched when the American economy faced challenges on a scale not seen since the 

Great Depression. The crisis began in the summer of 2007 and gradually increased in intensity and 

momentum during 2008. The forces that brought about the crisis had built up over a long period of 

time. They included an unsustainable housing boom fueled in part by the easy availability of 

mortgages, excessive debt held by households and businesses, rapid growth of the nation’s financial 

system, an outdated regulatory framework, and insensitivity to risk on the part of many investors. 

On September 15, 2008, the crisis entered a new phase when Lehman Brothers filed for bankruptcy. 

That day, the stock market dropped by more than 500 points and there were signs of a generalized 

run on America's financial system. Markets that are essential for helping businesses and families 

meet their everyday financing needs were freezing up, threatening the availability of student loans, 

small business loans, auto loans and other forms of consumer lending. In short, the mechanisms that 

keep money flowing throughout our economy were failing. 

By the end of September 2008, every major financial institution was threatened and many of them 

tried to shore up their balance sheets by shedding risky assets and hoarding cash. People were

rapidly losing trust and confidence in the stability of America’s financial system and the capacity of 

the government to contain the damage. Without immediate and forceful action by the Federal 

Government, the U.S. economy faced the risk of falling into a second Great Depression. 

The government took a series of actions that included providing broad-based guarantees of bank 

accounts, money market funds, and liquidity through the Federal Reserve. However it was soon clear 

that the government needed additional tools to address a crisis on this scale. So in late September 

2008, the Bush Administration proposed the law creating TARP. That measure was passed by 

Congress and signed into law by President Bush on October 3, 2008. 

What TARP Helped Accomplish

Collectively, TARP and the government’s other emergency measures were effective in preventing the 

collapse of our financial system, in restarting economic growth, and in restoring access to capital and 

credit. These programs were well designed and carefully managed. Because of this, we were able to

limit the broader economic and financial damage.

The most important measure of the effectiveness of TARP and the government’s other emergency 

programs is the impact they have had on restoring the nation’s financial stability and restarting our 

economy. At the end of 2008, the American economy was contracting at an annual rate of more than 

nine percent and the pace of job losses was accelerating. In the first few months of 2009, more than 

 

32 http://www.treasury.gov/initiatives/financialstability/reports/Documents/TARP%20Two%20Year%20Retrospective_10%2005%2010_transmittal%20letter.pdf

33 http://www.treasury.gov/initiatives/fsoc/Documents/2012%20Annual%20Report.pdf
Page | 30

750,000 jobs were being lost per month. By the middle of 2009, after the government’s emergency 

response programs had time to take effect, the rate of job losses began to slow and GDP began to 

recover. By early 2010, the economy began to add jobs. Although more work needs to be done to 

further strengthen growth, the emergency response programs put in place have helped the U.S. 

economy recover faster than many other nations dealing with similar crises in recent years. 

International Economic Growth since 2008

Cumulative Growth in Real GDP since 2008 Q1

Private Sector Payroll Employment 

Monthly Change, Seasonally Adjusted
Page | 31

Timeline of the Financial Crisis and Response 

S&P 500 Index, Five Year Bank CDS Spreads, and Net Tightening of Bank Lending Standards Since 2007
Page | 32

The crisis response also paved the way for Americans’ retirement savings to recover. As measured by 

the performance of the S&P 500 index and retirement fund assets, these funds have continued to 

exhibit a measurable recovery from the lows they experienced in late 2008 and early 2009.

TARP helped enable the nation’s banking system and credit markets to begin functioning again.

When the Obama Administration took office, credit markets were all but frozen, making it extremely 

difficult for consumers and businesses to get loans. Availability of credit is critical for small 

businesses to grow and for consumers to make home improvements, buy a new car, or send their 

children to college. Soon after many TARP programs began to be implemented, borrowing costs 

declined for many businesses, homeowners, and municipalities. This helped to keep credit flowing 

throughout the economy. 

Today our banking system is much stronger. Banks have higher capital levels, lower leverage, and 

the riskiest parts of the financial system no longer exist. Banks have strengthened their balance 

sheets by relying more on deposits and less on short-term wholesale funding. In addition, we have 

seen fewer bank failures since 2010 and the FDIC has shrunk their list of problem banks. 

Reforming the System

During the financial crisis, the government’s immediate priority was to stabilize a system in free-fall, 

limit the damage, and quickly restart economic growth. With the financial crisis having already 

taken a devastating toll in the form of lost jobs and lost savings, the government needed to take 

forceful actions that may have been unpopular but were necessary to stop the immediate crisis. Then 

President Obama worked with Congress to put reforms in place that would help address the 

underlying causes that led to the crisis in the first place. 

In July 2010, Congress passed and President Obama signed the Dodd-Frank Wall Street Reform and 

Consumer Protection Act (Dodd-Frank) to strengthen safeguards for consumers and investors and to 

provide better tools for limiting risk in major financial institutions and throughout markets. DoddFrank provides a new framework for reining in excessive risk-taking on Wall Street and refocusing 

the financial system on activities that strengthen rather than threaten the health of the nation’s 

economy. It includes:

 Providing stronger oversight of large, interconnected financial firms.

 Bringing together federal and state financial regulators to identify and respond to emerging 

threats to financial stability.

 Putting in place heightened prudential standards, including capital, liquidity and risk 

management standards to help ensure that these companies do not escape strong oversight 

or threaten financial stability.

 Giving the government new tools to wind down firms whose imminent failure could threaten 

the system.

 Bringing the derivatives market out of the shadows.

 Creating a dedicated watchdog for consumers in the form of the Consumer Financial 

Protection Bureau, so consumers have the information they need to make the financial 

decisions that are best for them.

Additional reforms are also moving forward. During 2012, the Federal Reserve, the OCC, and the 

FDIC jointly issued the finalized market risk capital rules. They also proposed new rules to bring 

domestic capital requirements more in line with international banking capital requirements 

(including aspects of Basel II, Basel 2.5, and Basel III). The implementation of these international 

agreements through domestic regulation is a key step in regulatory reform and for creating a safer 

and more resilient financial system going forward. 
Page | 33

Executive Compensation

EESA, as amended by the American Recovery and Reinvestment Act (ARRA), set standards for 

executive compensation and corporate governance for all recipients of financial assistance under 

TARP. 

Under ARRA, Treasury promulgated the Interim Final Rule on TARP Standards for Compensation 

and Corporate Governance (the Rule) on June 15, 2009. The Rule created the Office of the Special 

Master (OSM), which was delegated the responsibility to review and approve the compensation of 

top executives at firms that received exceptional assistance. In 2009, these firms were AIG, Bank of 

America, Citigroup, GM, Chrysler, Ally Financial and Chrysler Financial. As of December 31, 2012, 

only two exceptional assistance recipients – Ally Financial and GM – remain subject to the authority 

of the Special Master. The other five recipients of exceptional assistance have exited TARP. 

The OSM conducted extensive reviews of executive compensation for 2009, 2010, 2011, and 2012 at 

the companies that continued to have exceptional assistance outstanding in each year, and imposed 

requirements based on the following key principles:

 For the top 25 individual pay packages: (i) limit cash salary, (ii) pay incentives in long-term 

restricted stock, (iii) limit perquisites and ―other‖ compensation, and (iv) limit executive 

pension and retirement programs; and

 For the next 26-100 employees’ compensation structures: (i) restrict short-term cash 

compensation, (ii) tie incentive compensation to real achievement, (iii) make sure 

compensation structures have a long-term focus, and (iv) align pay practices with 

shareholder and taxpayer interests.

The OSM has been effective at limiting compensation at the seven companies over which it had 

authority, while ensuring the companies were well-positioned to pay back the taxpayers’ 

investments. The OSM cut the average cash pay for the top 25 executives at the seven companies 

that originally received exceptional assistance by more than 90 percent. The average total pay for 

the top 25 executives was cut by more than 50 percent. In addition, the OSM required that the 

majority of top 25 executive compensation be in the form of stock-based pay, the ultimate value of 

which will depend on the company’s performance over the subsequent three-year period. The OSM

also strictly limited prerequisites for these executives. 

Actions in 2012

On April 6, 2012, the Acting Special Master for TARP Executive Compensation, Patricia Geoghegan, 

released the 2012 compensation determinations for the top 25 executives at the remaining 

companies that received exceptional assistance.

34 The overall CEO compensation packages payable 

by these firms were frozen compared to 2011 levels, although there has been some modification in 

the mix of stock salary and long-term restricted stock for the CEO group. 

 

34 The 2012 determinations can be found at: http://www.treasury.gov/press-center/press-releases/Pages/tg1525.aspx. 
Page | 34

Transparency in TARP Programs

Treasury is committed to making sure that every TARP program is operating at the highest 

standards of transparency and accountability. This includes providing regular and comprehensive

information about how TARP funds are being spent, who has received them and on what terms, and 

how much has been recovered to date. 

OFS publishes a number of reports and other information on the status of TARP programs. These 

include the following reports:

 Monthly Report to Congress. Formerly known as the 105(a) report, this provides a monthly 

overview of how TARP funds have been used, how much has been recovered, the latest cost 

estimates for TARP, the program's operating expenses, and other information on the 

program.35

 Daily TARP Update. This report is a daily snapshot of the amount of funds disbursed and 

recovered to date for each individual TARP program, as well as additional financial 

information. This report is updated after each business day.36

 Annual Agency Financial Reports (AFRs). These annual reports contain the financial 

statements for TARP, the Government Accountability Office's (GAO) audit opinion on those 

financial statements, a separate opinion on OFS's internal controls over financial reporting, 

and results of GAO's tests of OFS's compliance with selected laws and regulations. The AFR 

is produced annually for the prior fiscal year and released during the last quarter of the 

calendar year.37

 Annual Citizens Reports on TARP. These reports contain information on the major activities 

conducted by OFS in implementing TARP. Citizens Reports are based on the Agency 

Financial Report. They cover the activities and results from the prior fiscal year and are 

released in the first quarter of the year.38

Treasury has also produced two retrospective reports on TARP previous to this one, on the second

and third anniversaries of the program. These reports provide comprehensive information on the 

milestones achieved during the previous year in each TARP program, as well as TARP as a whole.

39

In addition, Treasury prepares separate financial statements for TARP, which are audited annually 

by the GAO. In its first four years of operation, TARP’s financial statements received unqualified

audit opinions from its auditors at the GAO. OFS also received a Certificate of Excellence in 

Accountability Reporting (CEAR) from the Association of Government Accountants for fiscal years 

2011, 2010 and the period ending September 30, 2009. These financial statements along with 

extensive information about the programs can be reviewed in OFS’s AFR, referenced above.

These and many other reports on different aspects of TARP are available on the Financial Stability 

section of the Treasury.gov website.

40

 

35 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Monthly-Report-to-Congress.aspx

36 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/daily-tarp-reports.aspx

37 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Annual-Agency-Financial-Reports.aspx

38 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Citizens-Report-on-TARP.aspx

39 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/TARP-Annual-Retrospectives.aspx
Page | 35

Treasury is equally committed to ensuring that TARP’s housing initiatives are being implemented to 

the highest level of transparency. OFS regularly publishes the following major reports that provide 

the latest financial and performance information about Treasury’s housing programs:

 MHA Program Performance Report.

41 This is a monthly report containing detailed metrics on 

the MHA program. Once per quarter, this report is expanded to include detailed assessments 

of the performance of servicers participating in MHA. 

 Monthly Housing Scorecard.

42 This is a monthly report that is produced jointly by Treasury 

and the U.S. Department of Housing and Urban Development detailing the health of the 

nation’s housing market. It is generally released during the first week of each month. 

 HAMP Activity by Metropolitan Statistical Area.

43 Published monthly in conjunction with 

the MHA Program Performance Report, this includes a detailed breakdown of mortgage 

modification activity in different metropolitan areas of the nation.

 Making Home Affordable Data Files.

44 These data files include loan-level data on the 

characteristics of program participants before and after entering HAMP. Treasury takes 

steps to safeguard the anonymity of individual borrowers when compiling these files. 

 HAMP Application Activity by Servicer.

45 As required by the Dodd-Frank Wall Street Reform 

and Consumer Protection Act, this report shows the number of requests received, processed, 

approved, and denied by each participating servicer. It is published monthly. 

 HHF State-by-State Information.

46 Treasury makes available the latest state-by-state 

information from HFAs that are administering local programs under the Hardest Hit Fund. 

Visitors to Treasury’s website can also find each state’s plan, contract agreements, and their 

latest quarterly report. 

 

40 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/default.aspx

41 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Making-Home-Affordable-Program-PerformanceReport.aspx

42 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Monthly-Housing-Scorecard.aspx

43 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/HAMP-Report.aspx

44 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/mha_publicfile.aspx

45 http://www.treasury.gov/initiatives/financial-stability/reports/Pages/HAMP-Servicer.aspx

46 http://www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Pages/Program-Documents.aspx
Page | 36

Latest Cost Estimates of TARP

EESA initially authorized up to $700 billion for 

TARP. At that time, many believed that taxpayers 

would lose that entire amount. In fact however, as of 

December 31, 2012, $418 billion was disbursed under 

TARP and the vast majority of that has already been 

recovered.

Estimated lifetime cost figures for TARP are updated 

quarterly in conjunction with the Office of 

Management and Budget (OMB). The latest 

available data is reported through December 31, 

2012. As of that date, American taxpayers had

already recovered $387.46 billion, representing 

nearly 93 percent of the TARP funds disbursed. 

TARP’s bank investment programs alone have 

already earned more than $23 billion in positive 

returns for taxpayers.

According to Treasury and OMB’s latest estimates, the expected overall cost of TARP will be $55.5

billion, using asset prices as of December 31, 2012.

47 And when Treasury’s other interests in AIG are 

factored in, Treasury estimated that the combined net cost will be approximately $38 billion. The 

investment programs under TARP collectively, together with Treasury’s overall AIG holdings are 

expected to break even or yield a small gain when they are fully wound down. Therefore, the total 

program cost of TARP is expected to be roughly equal to the amount that is ultimately disbursed to 

help homeowners avoid foreclosure—money that was never intended to be returned.

TARP was only one part of a broader federal response to the financial crisis. The latest estimates 

available indicate that the overall financial stability programs that Treasury, the Federal Reserve, 

and the FDIC put in place during the crisis are likely to result in an overall positive financial return 

for taxpayers in terms of direct fiscal cost.48 When taken together with the Federal Government’s 

other emergency response programs, taxpayers now stand to earn a significant positive return from 

the financial crisis response. 

All recovered funds are deposited in the U.S. Treasury and go towards reducing the national debt.

 

47 The ultimate lifetime cost of the TARP investments will be impacted by share prices of its common stock in GM, AIG, and 

the value of its CPP investments. Treasury will continue to manage its investments in order to balance speed of exit with 

maximizing returns for taxpayers.

48 Additional information can be found in ―The Financial Crisis Response in Charts,‖ published by Treasury in April 2012 and 

available at: http://www.treasury.gov/resource-center/data-chart-center/Documents/20120413_FinancialCrisisResponse.pdf 
Page | 37

Links for Further Information

Glossary of Terms49

The Office of Financial Stability’s website50

U.S. Department of the Treasury’s website51

U.S. Department of the Treasury’s Press Center52

The Response to the Financial Crisis in Charts53 – These charts provide a more comprehensive 

update on the impact of the combined actions of the Treasury, the Federal Reserve, and the FDIC.

 

49 http://www.treasury.gov/initiatives/financial-stability/glossary/Pages/Default.aspx

50 http://www.treasury.gov/initiatives/financial-stability/Pages/default.aspx

51 http://www.treasury.gov/Pages/default.aspx

52 http://www.treasury.gov/press-center/Pages/default.aspx

53 http://www.treasury.gov/connect/blog/Pages/financial-crisis-response-in-charts.aspx
www.treasury.gov/initiatives/financial-stability