Office of Financial Stability

FY 2016

President’s Budget 

February 2, 2015
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Table of Contents

Section 1 – Purpose ....................................................................................................................... 3

1A – Mission Statement.............................................................................................................. 3

1.1 – Program Account Summary............................................................................................... 3

1.2 – Financing Account Summary ............................................................................................ 4

1.3 – Program Disbursement, Repayments, and Cost/Savings................................................... 4

1B – Vision, Priorities and Context............................................................................................ 4

1C - Credit Reform and Administrative Accounts ..................................................................... 6

Section 2 – Budget Adjustments and Appropriation Language............................................... 8

2.1 – Budget Adjustments Table................................................................................................. 8

2A – Budget Increases and Decreases Description..................................................................... 8

2.2 – Operating Levels Table...................................................................................................... 9

2B – Appropriations Language and Explanation of Changes..................................................... 9

2C – Legislative Proposals.......................................................................................................... 9

Section 3 – Budget and Performance Plan ............................................................................... 10

3A – EESA Program Descriptions............................................................................................ 10

3B – EESA Administration....................................................................................................... 14

3C – Operational Goals............................................................................................................. 14

Section 4 – Supplemental Information...................................................................................... 18

4A – Summary of Capital Investments..................................................................................... 18
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Section 1 – Purpose

1A – Mission Statement

A central part of the response to the financial crisis was the implementation of the Troubled 

Asset Relief Program (TARP), which was established in the fall of 2008 under the Emergency 

Economic Stabilization Act (EESA) within the Office of Domestic Finance at the U.S. 

Department of the Treasury (Treasury). With the nation in the midst of the worst financial crisis 

since the Great Depression, TARP was created to “restore the liquidity and stability of the 

financial system.”

Each year, OFS reports on our Operational Goals, which were developed by management to

achieve Treasury’s strategic goal to promote domestic economic growth and stability while 

continuing reforms of the financial system. OFS has made significant progress towards winding 

down TARP investment programs and continues to implement our housing programs to help 

struggling families avoid foreclosure, primarily through mortgage modifications. As of 

November 30, 2014, OFS has recovered an amount equal to more than 99 percent of the $426.3

billion in total program funds disbursed under TARP, as well as an additional $17.55 billion 

from Treasury’s equity in AIG. When all of Treasury’s AIG investments are combined, the 

amount recovered is $14.0 billion more than the funds disbursed.

1.1 – Program Account Summary

Dollars in Thousands

 FY 2014 FY 2015 FY 2016 FY 2015 to FY 2016

 Actual Estimated Estimated $ Change % Change

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

Obligations

Equity Program Account 0 3,339 0 (3,339) -100.00%

Housing Account 161 0 0 0 0.00%

TARP Account 90,090 0 0 0 0.00%

TARP Administrative Account 203,049 169,890 155,066 (14,824) -8.73%

TARP Negative Downward Reestimate 

Receipt Account (8,238,356) (1,525,007) 0 1,525,007 -100.00%

Total Obligations ($7,945,054) ($1,351,778) $155,066 $1,506,844 -111.47%

Budget Authority 

Equity Program Account 0 3,339 0 (3,339) -100.00%

Housing Account 161 0 0 0 0.00%

TARP Account 90,090 0 0 0 0.00%

TARP Administrative Account 218,012 184,000 155,066 (28,934) -15.72%

TARP Negative Downward Reestimate 

Receipt Account (8,238,356) (1,525,007) 0 1,525,007 -100.00%

TARP Negative Subsidy Receipt 

Account 0 0 0 0 0.00%

Total Budget Authority ($7,930,094) ($1,337,668) $155,066 $1,492,734 -111.59%

Outlays

Equity Program Account 0 3,339 0 (3,339) -100.00%

Housing Account 4,299,967 4,951,591 5,138,441 186,850 3.77%

TARP Account 90,090 0 0 0 0.00%

TARP Administrative Account 221,077 282,000 161,000 (121,000) -42.91%

TARP Negative Downward Reestimate 

Receipt Account (8,238,356) (1,525,007) 0 1,525,007 -100.00%

TARP Negative Subsidy Receipt 

Account 0 0 0 0 0.00%

Total Outlays ($3,627,222) $ 3,711,923 $ 5,299,441 $ 1,587,518 42.77% 1 The recovery of 103 percent of the original investment disbursements includes income from repayments, 

dividends, interest and other sources. More information is available via the Daily TARP Update on OFS’s website 

(http://www.treasury.gov/initiatives/financial-stability/reports/Pages/default.aspx).
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1.2 – Financing Account Summary

Dollars in Thousands

 FY 2014 FY 2015 FY 2016 Change % Change

 Actual Estimated Estimated FY 2015 to FY 

2016

FY 2015 to FY 

2016

AMOUNT AMOUNT AMOUNT AMOUNT AMOUNT

TARP Direct Loans

Obligations 1,994,541 288,448 0 (288,448) -100.00%

Collections 5,367,295 39,230 0 (39,230) -100.00%

Financing Authority (net) (3,091,562) (38,489) 0 38,489 -100.00%

Financing Disbursements (net) (3,371,740) 249,218 0 (249,218) -100.00%

Equity Purchases

Obligations 6,505,809 1,436,490 59,324 (1,377,166) -95.87%

Collections 12,173,477 2,058,340 157,135 (1,901,204) -92.37%

Financing Authority (net) (6,019,381) (934,784) (97,812) 836,972 -89.54%

Financing Disbursements (net) (5,667,440) (621,850) (97,812) 524,038 -84.27%

Housing

Obligations 1,902 6,154 2,107 (4,047) -65.76%

Collections 295 35 59 24 70.60%

Financing Authority (net) 0 35 59 24 70.60%

Financing Disbursements (net) 1,607 6,154 2,107 (4,047) -65.76%

1.3 – Program Disbursement, Repayments, and Cost/Savings

Dollars in Billions (As of 11/30/14)

Cumulative 

Obligated

Cumulative 

Disbursed

Cumulative 

Outstanding 

(Includes 

Realized 

Losses)

Total 

Cumulative 

Income

Total Cash

Back

Total 

Estimated 

Lifetime 

Costs (as 

of 9/30/14)

Bank Support Programs 250 245 1 36 275 -24

Credit Market Programs 19 19 0 5 24 -3

AIG Investment Program (AIG) 68 68 0 1 55 15 * Automotive Industry Financing 

Program 80 80 1 7 69 12

Treasury Housing Programs Under 

TARP 38 15 37

Total** $456 $426 $2 $48 $423 $37 

Additional AIG Common Shares 

Held by OFS 0 0 0 18 18 -18 *

Total for Programs and Shares** $456 $426 $2 $66 $440 $20 

*If all Treasury AIG Investments are combined, we currently estimate a net gain of $2.3 billion on those shares.

**Totals may not foot due to rounding.

1B – Vision, Priorities and Context

TARP was created by EESA in October 2008 as part of a broad-based federal response to the 

financial crisis. At that time, the U.S. financial system faced challenges on a scale not seen since 

the Great Depression. By October of 2008, major financial institutions were 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.

It was out of these extraordinary circumstances in the fall of 2008 that TARP was created as a 

central part of a series of emergency measures by the federal government. Seven years later, it is 

generally agreed that as a result of the forceful and coordinated response by the federal 
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government through TARP and many other emergency programs, we helped avert what could 

have been a devastating collapse of our financial system. 

The purposes of EESA were to —

(1) immediately provide authority and facilities that the Secretary of the Treasury could use to 

restore liquidity and stability to the financial system of the United States; and

(2) ensure that such authority and such facilities were used in a manner that —

(A) Protects home values, college funds, retirement accounts, and life savings;

(B) Preserves homeownership and promotes jobs and economic growth;

(C) Maximizes overall returns to the taxpayers of the United States; and,

(D) Provides public accountability for the exercise of such authority.

EESA vested authority in the Secretary of the Treasury to “purchase, and to make and fund 

commitments to purchase, troubled assets from any financial institution, on such terms and 

conditions as are determined by the Secretary.” 

As a result of improved financial conditions and careful stewardship of the program, the ultimate 

cost to taxpayers of TARP investments is estimated to be significantly lower than initially 

expected. In FY 2009, the program was projected to cost $341 billion, but it is now estimated to 

cost only $37.5 billion (of which $37.4 billion relates to housing programs that do not require 

repayments by recipients) as of September 30, 2014. Lifetime costs are projected at $20.0 billion 

with the inclusion of receipts from Treasury’s sale of AIG common stock.

 *Includes approximately $17.55 billion in proceeds from additional Treasury AIG shares

$341.0

$124.1

$77.7 $70.2 $59.7

$22.7* $20.0* 

 -

 50

 100

 150

 200

 250

 300

 350

 400

May-2009 Sep-2009 Sep-2010 Sep-2011 Sep-2012 Sep-2013 Sep-2014

Cost (in billions)

Date

OFS TARP Cost Estimates
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During FY 2015 and FY 2016, OFS’s priorities will be to continue winding down TARP’s bank 

investment programs subject to market conditions and implementing TARP’s housing programs 

to prevent avoidable foreclosures while protecting taxpayers’ interests. While OFS cannot 

implement new TARP programs, disbursements for the housing programs will continue to occur 

based upon existing commitments. 

OFS Administrative Expenses

The authority for OFS’s administrative budget funds is provided in Section 118 of EESA. In FY 

2015, OFS plans to obligate $170 million and use no more than 87 FTEs, a decrease of 

approximately $14 million from the FY 2015 President’s Budget. The decrease in obligations is 

primarily due to the wind down of TARP’s investment programs. In FY 2016, OFS plans to 

obligate $155 million and use 75 FTEs, a decrease of $15 million and 12 FTEs from the current 

FY 2015 estimates, to fund the management of the TARP housing programs and disposition of 

OFS’s remaining investments. The decrease in FTEs and outside contracts reflects the continued 

wind down of TARP.

1C - Credit Reform and Administrative Accounts

Section 123 of EESA requires the cost of TARP programs to be calculated using the methods 

required by the Federal Credit Reform Act of 1990 ("credit reform"). In addition to OFS’s 

administrative account, the organization has managed seven program accounts to comply with 

the credit reform accounting requirements: TARP Equity Purchase Program Account, TARP 

Equity Purchase Financing Account, TARP Housing Programs Account, TARP Home 

Affordable Modification Program Financing Account, TARP Program Account, Troubled Assets 

Insurance Financing Fund Guaranteed Loan Financing Account, and TARP Direct Loan 

Financing Account. 

Account Descriptions

TARP Equity Purchase Program Account: The TARP Equity Purchase Program Account 

records the subsidy costs (cost to the government) associated with federal equity injections into 

qualifying financial institutions. Subsidy costs are calculated on a net present value basis. 

TARP Equity Purchase Financing Account (EPFA): The TARP EPFA is a non-budgetary 

account that records all financial transactions to and from the government resulting from equity 

purchases. The EPFA primarily tracks each cohort year’s purchase activity (dividend payments, 

the exercise of warrants, Treasury borrowings, interest paid to or received from Treasury, etc.) 

and is not included in the budget totals when calculating total government spending.

TARP Housing Programs Account: The TARP Housing Programs Account records the subsidy 

costs and cash outlays associated with Treasury’s housing programs under TARP. The Making 

Home Affordable (MHA) and Hardest Hit Fund housing programs are recorded on a cash basis, 

and the Federal Housing Administration (FHA)-Refinance Program is subject to the Federal 

Credit Reform Act of 1990 whereby its subsidy cost is calculated on a net present value basis. 

TARP Home Affordable Modification Program Financing Account: The TARP Home 

Affordable Modification Financing Account is a non-budgetary account that records all financial 

transactions to and from the government resulting from OFS’s FHA-Refinance Program. Like 
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other financing accounts, its primary purpose is the financial tracking of each cohort year’s loan 

activity and is not included in the budget totals.

TARP Program Account: The TARP Program Account records the subsidy costs associated with 

direct loans obligated and guaranteed loans committed to qualifying institutions. Subsidy costs 

are calculated on a net present value basis. 

TARP Direct Loan Financing Account (DLFA): The TARP DLFA is a non-budgetary account 

that records all financial transactions to and from the government resulting from direct loans. 

Like EPFA and GLFA, its primary purpose is the financial tracking of each cohort year’s loan 

activity and is not included in the budget totals.

Office of Financial Stability Administrative Account: This account provides for the 

administrative costs of OFS.
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Section 2 – Budget Adjustments and Appropriation Language

2.1 – Budget Adjustments Table

Dollars in Thousands

Office of Financial Stability FTE Amount

FY 2015 Estimated 86 $183,640 

Changes to Base:

Adjustments to Estimate: 1 (13,750)

FY 2015 Revised Estimate 87 $169,890 

Maintaining Current Levels (MCLs): - $3,157 

Pay-Raise - $103

Pay Annualization $35

FERS Contribution Increase $54

Non-Pay - $2,965 

Subtotal Changes to Base 1 (10,593)

Total FY 2016 Base 87 173,047 

Program Changes:

Program Decreases: (12) (17,981)

Housing Program Support - (11,234)

Maintenance and Disposition of Assets - (1,390)

OFS Salaries and Benefits (12) (1,582)

Organizational Support - (3,775)

Total FY 2016 Estimated 75 155,066 

2A – Budget Increases and Decreases Description

Maintaining Current Levels (MCLs) ......................................................+$3,157,000 / +0 FTE

Pay-Raise +$103,000 / +0 FTE 

Funds are required for the proposed January 2016 pay-raise.

Pay Annualization +$35,000 / +0 FTE

Funds are required for annualization of the January 2015 pay-raise.

FERS Contribution Increase +$54,000 / +0 FTE 

Funds are required for increases in agency contributions to the Federal Employee Retirement 

System based on updated actuarial estimates.

Non-Pay +$2,965,000 / +0 FTE 

Funds are required for inflation adjustments in non-labor costs such as travel, contracts, rent, 

supplies, and equipment.

Program Decreases .................................................................................-$17,981,000 / -12 FTE

Housing Program Support -$11,234,000 / +0 FTE 

The MHA compliance and administrative functions will continue due to the extension of the 

program, but will decline over time as the program matures.
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Maintenance and Disposition of Assets -$1,390,000 / +0 FTE 

During FY 2015, OFS will continue the disposition of its position in Ally and expects to have 

disposed of a majority of the remaining Capital Purchase Program (CPP) banks. In FY 2016, 

OFS expects its portfolio to be composed of a handful of CPP banks and the Community 

Development Capital Initiative (CDCI) banks.

OFS Salaries and Benefits -$1,582,000 / -12 FTE 

Savings resulted from natural attrition and expiration of term appointments due to the wind down 

of various TARP programs. 

Organizational Support -$3,775,000/ +0 FTE 

Administrative costs associated with managing OFS’s portfolio will decline over time as TARP 

winds down. However, many duties and responsibilities will remain and are not directly 

correlated to the volume of assets held by OFS. Many of these organizational support functions 

will be run in-house and relate to legislative and oversight-mandated reporting functions.

2.2 – Operating Levels Table

Dollars in Thousands

Office of Financial Stability FY 2014 FY 2015 FY 2016

Object Classification Actual Estimated Estimated

11.1 - Full-time permanent 11,633 10,777 9,638

11.7 - Other Personnel Compensation 110 108 96

11.9 - Personnel Compensation (Total) 11,743 10,885 9,734

12.0 - Personnel benefits 2,707 2,960 2,721

Total Personnel and Compensation Benefits $14,450 $13,845 $12,455 

21.0 - Travel and transportation of persons 169 271 241

23.0 - Rent, Communications and Utilities 4 0 0

25.1 - Advisory and assistance services 187,855 155,276 141,923

26.0 - Supplies and materials 560 498 447

31.0 - Equipment 11 0 0

43.0 - Interest and dividends 0 0 0

Total Non-Personnel 188,599 156,045 142,611

Total Budgetary Resources $203,049 $169,890 $155,066 

Budget Activities:

EESAP - TARP Administrative Account 203,052 169,890 155,066

Total Budgetary Resources $203,049 $169,890 $155,066 

FTE 99 87 75

Table includes direct FTEs.

2B – Appropriations Language and Explanation of Changes

OFS does not receive any discretionary appropriation authority from Congress. Therefore, no 

appropriations language is proposed.

2C – Legislative Proposals

OFS has no legislative proposals.
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Section 3 – Budget and Performance Plan

3A – EESA Program Descriptions

Bank Support Programs

Capital Purchase Program (CPP): OFS’s largest program was launched to stabilize and build 

confidence in the financial system by bolstering the capital position of viable institutions. OFS 

created the CPP in October 2008 to help ensure that the nation’s banking institutions had a 

sufficient capital cushion against potential future losses and to support lending to creditworthy 

borrowers. OFS provided a total of $204.9 billion in capital to 707 institutions in 48 states, 

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

Institutions (CDFIs). 

During FY 2014, OFS focused on winding down the CPP according to the exit strategy 

announced on May 3, 2012. That strategy includes a combination of waiting for those banks that 

are capable of repaying in the near future to repay at par, 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, and, in a limited number of cases, restructuring investments. As of November 30, 2014, 

the CPP has generated $226.0 billion in proceeds for taxpayers with 35 institutions remaining in 

the program for a total of $558 million in investments outstanding.

Targeted Investment Program (TIP): OFS established the TIP in December 2008. The program 

gave OFS the necessary flexibility to provide funding to financial institutions that were critical to 

the functioning of the U.S. financial system to prevent a loss of confidence in these critical 

institutions. OFS invested $20.0 billion each in Bank of America and Citigroup under the TIP. 

As of December 31, 2009, the TIP was closed as part of OFS’s effort to wind-down TARP. Both 

Citigroup and Bank of America fully redeemed the Government's TIP investments of $40.0

billion plus $3.0 billion in dividends and $1.4 billion in warrants which generated a net gain of 

$4.4 billion for taxpayers. 

Asset Guarantee Program (AGP): Under the AGP, TARP funds were used to support two 

institutions – Bank of America and Citigroup. They were selected because of the large number of 

illiquid assets that both held at the time of the financial crisis and the severe impact that their 

failure would have had on the broader economy. The AGP helped these institutions maintain the 

confidence of their depositors and other funding sources while continuing to meet the credit 

needs of households and businesses. The AGP closed in December 2009 and was fully wound 

down in February 2013, receiving more than $4.1 billion in proceeds without disbursing any 

claim payments.

Community Development Capital Initiative (CDCI): OFS created the Community Development 

Capital Initiative (CDCI) on February 3, 2010, to help viable certified Community Development 

Financial Institutions (CDFIs) and the communities they serve cope with effects of the financial 

crisis. It was put in place to help keep day-to-day financing available to families and businesses 

in hard-hit communities that are underserved by traditional banks. 

Under this program, CDFI banks, thrifts, and credit unions received investments in capital with 

an initial dividend or interest rate of two percent. To encourage repayment while recognizing the 

unique circumstances facing CDFIs, the dividend rate increases to nine percent after eight years. 
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OFS invested a total of $570 million in 84 CDFIs, of which 28 institutions converted $363 

million (including warrants) from CPP to CDCI . As of November 30, 2014, 16 institutions have 

fully repaid their investment, 3 institutions have partially repaid their investment, and one has 

been taken into receivership and the program has approximately $462 million in investments 

outstanding. 

Credit Market Programs 

Public-Private Investment Program (PPIP): On March 23, 2009, OFS launched the Legacy 

Securities Public-Private Investment Program (PPIP) to help restart the market for non-agency 

residential mortgage-backed securities (RMBS) and commercial mortgage-backed securities 

(CMBS), thereby allowing banks and other financial institutions to re-deploy capital and extend 

new credit to households and businesses. 

The purpose of PPIP was to draw new private capital into the market for legacy RMBS and 

CMBS by providing financing on attractive terms as well as a matching equity investment from 

OFS. Using up to $22.1 billion of TARP funds alongside equity capital raised from private 

investors, PPIP was designed to generate significant purchasing power and demand for troubled 

RMBS and CMBS. This in turn helped to increase the amount of credit available to consumers 

and small businesses. As of November 30, 2014, all of the PPIFs have been effectively wound 

down and OFS has recovered all of its debt and equity investments plus an additional $3.85

billion in revenue.

Term Asset-Backed Securities Loan Facility (TALF): The Term Asset-Backed Securities Loan 

Facility (TALF) is a joint OFS - Federal Reserve Bank of New York (FRBNY) program that was 

designed to restart the asset-backed securitization markets (ABS) that had ground to a virtual 

standstill during the early months of the financial crisis.

OFS originally committed to provide credit protection of up to $20.0 billion in subordinated 

loans to TALF, LLC to support up to $200 billion of lending by the FRBNY. OFS’s 

commitment was ultimately reduced to $100 million (the amount of the original loan to fund the 

TALF LLC). During fiscal year 2013, OFS’s original disbursed investment through the program 

was fully repaid with interest. As of November 30, 2014, accumulated income earned from 

investments in the TALF, LLC, totaled $685 million.

Small Business Administration (SBA) 7(a) Securities Purchase Program: To help ensure that 

credit flowed to entrepreneurs and small business owners, OFS developed the SBA 7(a) 

Securities Purchase Program to purchase SBA-guaranteed securities from pool assemblers. OFS 

invested in a total of 31 SBA 7(a) securities with a value of approximately $367 million 

(excluding purchased accrued interest) between March and September 2010. 

OFS sold all its SBA 7(a) securities in the portfolio by fiscal year 2012, marking the successful 

wind down of the program. In total, OFS collected $376 million through sales representing cash 

collections of approximately $9 million more than its original investment of $367 million.

American International Group, Inc. (AIG) Investment Program: On September 15, 2008, 

Lehman Brothers filed for bankruptcy. This triggered the start of a run on money market funds 

generally. The day after that, AIG—one of the largest and most complex financial firms in the 
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world—was on the verge of failure. Confidence was already fragile in the financial system as a 

whole and firms were trying to shore up their balance sheets by selling risky assets, reducing 

exposure to other financial institutions, and hoarding cash. When the financial crisis hit, AIG had 

hundreds of billions of dollars in commitments without the capital and liquid assets to back them 

up. Millions of people depended on AIG for their life savings and it had a huge presence in 

many critical financial markets. Therefore, with AIG facing potentially fatal liquidity problems 

and with the crisis threatening to intensify and spread more broadly throughout the economy, 

OFS and the Federal Reserve provided assistance to AIG totaling approximately $182 billion,

which included $70 billion from OFS and $112 billion committed by the FRBNY. In FY 2013, 

OFS and the FRBNY completed the recovery of their investments in AIG. OFS and FRBNY 

have now recovered that entire amount and an additional $22.7 billion and Treasury has fully 

exited its investment in AIG.

Automotive Industry Financing Program (AIFP)

The Automotive Industry Financing Program (AIFP) was launched in December 2008 to prevent 

the uncontrolled liquidations of General Motors (GM) and Chrysler, and as a result, the potential 

collapse of the U.S. auto industry. The potential for such a disruption at that time posed a 

significant risk to financial market stability and threatened the overall economy. It could have 

also had disastrous consequences for other auto manufacturers and the many suppliers and other 

businesses that depended on the automotive industry. This could have led to a loss of as many as 

one million American jobs. Recognizing that both GM and Chrysler were on the verge of 

collapse, the Government extended initial loans to both companies and their financing entities.

In 2009, OFS agreed to provide additional funds conditioned on each company and its 

stakeholders participating in a fundamental restructuring. A total of $79.7 billion was ultimately 

invested in GM, Ally Financial (Ally), and Chrysler. 

OFS made loans totaling $50.2 billion (including funds for warranty suppliers) to GM. Some of 

those loans were subsequently converted to common stock in GM. Through share repurchases by 

the company, as well as sales of shares to investors, OFS completed its disposition of GM in 

December 2013, with proceeds $10.5 billion less than the total investment.

OFS committed a total of $12.4 billion to Chrysler under TARP. In July 2011, OFS fully exited 

its investment in Chrysler, six years ahead of schedule. Of the $12.4 billion disbursed to 

Chrysler under TARP, OFS recovered more than $11.1 billion for taxpayers through principal 

repayments, interest, and cancelled commitments. OFS is unlikely to fully recover the difference 

of $1.3 billion owed by Old Chrysler.

OFS invested $17.2 billion in Ally under TARP (including $884 million invested through GM). 

Between November 2013 and December 2014, OFS collected approximately $12.8 billion on its 

investment in Ally through repurchases, private placements, an initial public offering, and 

underwritten common stock sales. OFS has fully liquidated its investment in Ally Financial and 

has realized cumulative receipts of $19.6 billion, $2.4 billion more than invested. 
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Treasury Housing Programs Under TARP

OFS established several programs under TARP to address the historic housing crisis and help 

struggling homeowners avoid foreclosure wherever possible. These programs have helped 

millions of homeowners avoid foreclosure and introduced important new reforms for the 

mortgage servicing industry to help make mortgage modifications become more sustainable and 

affordable.

Making Home Affordable Program (MHA): In early 2009, OFS launched the Making Home 

Affordable® Program (MHA) to help struggling homeowners avoid foreclosure and stabilize the 

housing market. MHA is only one part of the Administration’s broader efforts to strengthen the 

housing market. Since its inception, MHA has helped homeowners avoid foreclosure by 

providing a variety of solutions to modify or refinance their mortgages, get temporary 

forbearance if they are unemployed, or transition out of homeownership through a short sale or a 

deed-in-lieu of foreclosure. 

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

provides eligible homeowners the opportunity to reduce their monthly mortgage payments to 

more affordable levels. OFS also introduced additional programs under MHA to help 

homeowners who are unemployed, “underwater” on their loan (those who owe more on their 

home than it is currently worth), or are struggling with a second lien. It also includes options for 

homeowners who would like to transition to a more affordable living situation through a short 

sale or deed-in-lieu of foreclosure. On June 26, 2014, the Administration extended the 

application deadline for MHA programs for at least a year. Extending the program will benefit

many additional families while maintaining clear standards and accountability for the mortgage 

industry. 

In addition to HAMP, MHA includes several additional programs to help homeowners refinance 

or address specific types of mortgages, in conjunction with the Federal Housing Administration 

(FHA) and the United States Department of Agriculture (USDA). As of November 30, 2014, 

OFS disbursed $9.7 billion out of a possible $29.8 billion under MHA.

Housing Finance Agency (HFA) Hardest-Hit Fund: The Administration established the Hardest 

Hit Fund (HHF) in February 2010 to provide targeted aid to homeowners in states hit hardest by 

the economic and housing market downturn. As part of the Administration’s overall strategy for 

restoring stability to housing markets, HHF provides funding for state Housing Finance Agencies 

(HFAs) to develop locally-tailored foreclosure prevention solutions in areas that have been 

hardest hit by home price declines and high unemployment. From its initial announcement, this 

program evolved from a $1.5 billion initiative focused on HFAs in the five states with the 

steepest home price declines and the vast majority of underwater homeowners to a broader-based 

$7.6 billion initiative encompassing 18 states and the District of Columbia (DC).

HHF programs vary state to state, but may include such programs as mortgage payment 

assistance for unemployed or underemployed homeowners, principal reduction to help 

homeowners get into more affordable mortgages, funding to eliminate homeowners’ second lien 

loans, and help for homeowners who are transitioning out of their homes and into more 

affordable living situations. As of November 30, 2014, OFS disbursed $4.8 billion out of a 

possible $7.6 billion under the HFA Hardest-Hit Fund.
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Federal Housing Administration (FHA)-Refinance Program: OFS also continues to support the 

Federal Housing Administration 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. Utilization of the program has been limited with OFS providing 

coverage for only approximately 3,000 loans refinanced to date. As such, OFS reduced the letter 

of credit facility from $8.1 billion to $1.0 billion in March of 2013, and, as of September 30, 

2014, the revised lifetime cost estimate for the program is $29 million for outstanding refinanced 

loans.

3B – EESA Administration

The authority for the OFS administrative budget is provided in Section 118 of EESA. The 

administrative budget consists primarily of contracting and financial agent support costs 

associated with OFS’s ongoing implementation and management of the TARP housing programs 

and the management and disposition of OFS’s remaining investments. In addition, continuing 

organizational support, including information technology, facilities, legal, compliance, 

accounting, and human resources, will be needed to manage these ongoing OFS initiatives. The 

owner of OFS’s performance is the Deputy Assistant Secretary for Financial Stability.

3C – Operational Goals

Complete the wind down of the investment programs

The first operational goal for OFS is to complete the wind down of the TARP investment 

programs. OFS is continuing to implement the three-pronged exit strategy for the Capital 

Purchase Program (CPP), which was announced in May 2012. That strategy includes a 

combination of waiting for those banks that are capable of repaying in the near future to repay at 

par, 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, and, in a limited number of cases, 

restructuring investments. Both the Targeted Investment Program (TIP) and the Asset Guarantee 

Program (AGP) are closed and have generated positive returns for the taxpayer. 

As of November 30, 2014, OFS has substantially completed the wind down of the three TARP 

Credit Market programs at a net gain to the taxpayer. OFS has recovered all debt and equity 

investments made in the Public-Private Investment Program (PPIP). OFS’s loan commitments 

through the Term Asset-Backed Securities Loan Facility (TALF) were fully repaid or 

extinguished during FY 2013 with a gain of $685 million as of November 30, 2014. The Small 

Business Administration 7(a) Security Purchase Program (SBA 7(a)) was successfully closed 

during fiscal year 2012 with the processing of the fifth and final disposition of securities. 

OFS has effectively wound down the Automotive Industry Financing Program (AIFP) with the 

sale of all GM common stock during fiscal years 2013 and 2014 and the liquidation of all Ally 

investments during fiscal years 2014 and 2015. OFS collected a total of $39.7 billion of the 

$50.2 billion disbursed to GM and $19.6 billion of the $17.2 billion disbursed to Ally.

OFS completed the recovery of all investments in the American International Group, Inc. (AIG) 

Investment Program in December of 2012 and sold remaining warrants in March 2013. OFS no 

longer holds any residual interest in AIG.
OFS - 15

Continue helping families in need to avoid foreclosure

OFS’s second operational goal is to continue helping struggling homeowners avoid foreclosure. 

The Making Home Affordable Program (MHA) is helping homeowners and assisting in 

stabilizing the housing market. On June 26, 2014, the Administration extended the application 

deadline for MHA programs for at least a year, to provide struggling homeowners additional 

time to access sustainable mortgage relief. The largest program within MHA is the Home 

Affordable Modification Program (HAMP). Under this program more than 1.4 million 

homeowners have had their mortgages modified permanently as of October 31, 2014. HAMP 

has also set new standards and changed practices throughout the mortgage servicing industry in 

fundamental ways. Together, public and private efforts have helped nearly seven million 

Americans get mortgage assistance to prevent avoidable foreclosures. In addition, the Hardest 

Hit Fund provides funding to 18 states and the District of Columbia to provide assistance to 

struggling homeowners through locally tailored programs. All 19 programs are fully operational 

and have created extensive infrastructures to operate these programs, including selecting and 

training networks of housing counselors to assist with applications, creating portals to aid 

homeowners in applying for assistance, and hiring underwriters and other staff to review and 

approve applications. As of September 30, 2014, seven HFAs had stopped accepting new 

applications for assistance in anticipation of full commitment of program funds.

$423.7

$291.0

$178.9

$122.1

$62.1

$22.7

$2.9 $2.5

0

50

100

150

200

250

300

350

400

450

Total

Disbursed

Sep-09 Sep-10 Sep-11 Sep-12 Sep-13 Sep-14 Nov-14

Investments Outsanding (in billions)

Date

OFS TARP Investments Outstanding
OFS - 16

FY 2011 FY 2012 FY 2013 FY 2014

Performance Metrics and Indicators1

(includes GSE and non-GSE)

Actual Actual Actual Actual

Reduction in median payment for homeowners in 

permanent modifications (assist homeowners) 

program-to-date. $526 $541 $547 $540

Number of modifications entered into 

(assist homeowners)

Trial

Permanent

344,598

361,076

213,613

233,622

181,505

178,039

137,550

148,070

12-month re-default rate for Permanent 

Modifications (90+ days delinquency rate for 

loans seasoned 12 months) 15.4% 14.5% 13.6% 13.5%

1

Items in italics are indicators. 

Minimize cost to taxpayer

The third operational goal of OFS is to minimize the cost of the TARP programs to the taxpayer. 

OFS manages TARP investments to minimize costs to taxpayers by carefully managing the 

timely exit of these investments to reduce taxpayers’ exposure, returning TARP funds to reduce 

the federal debt, and continuing to replace government assistance with private capital in the 

financial system. OFS has taken a number of steps during fiscal years 2013 and 2014 to dispose 

of our outstanding investments in a manner that balances the need to exit these investments as 

quickly as practicable with maximizing returns for taxpayers. OFS also takes steps to ensure that 

TARP recipients comply with any TARP-related statutory or contractual obligations such as 

executive compensation requirements and restrictions on dividend payments.

FY 2011 FY 2012 FY 2013 FY 2014

Performance Metrics and Indicators1 Actual Actual Actual Actual

Number of public CPP banks that repurchased 

warrants from OFS during period (excludes 

warrants auctioned by OFS)

29 44 28 11

Proceeds from warrant repurchases as percent of 

aggregate CPP preferred investment amount

(plus median for the selected banks)

2.4% 1.9% 3.3% 4.2%

1

Items in italics are indicators.

Continue to operate with highest standards of transparency, accountability, and integrity

OFS’s final goal is to continue to operate with highest standards of transparency, accountability, 

and integrity. OFS posts a variety of reports online that provide the taxpayer with regular and 

comprehensive information about how TARP funds are being spent, who has received them and 

on what terms, and how much has been collected to date. As part of this effort, in June 2013, we 

enhanced and expanded the existing TARP Tracker on our website to enable users to view the 
OFS - 17

flow of funds for a specific time period or over the lifetime of a TARP program. OFS also 

publishes the audited annual report and continues to maintain productive working relationships 

with three oversight bodies charged with auditing and reviewing the TARP activities. 

Performance Metrics and FY 2012 FY 2012 FY 2013 FY 2013 FY 2014 FY 2014 FY 2015 FY 2016

Indicators1 Target Actual Target Actual Target Actual Target Target

Percentage of statutorily-mandated 

reports submitted on time 100% 100% 100% 100% 100% 99% 100% 100% (ensure transparency within the 

government)

Percentage of customers satisfied 

with FinancialStability.gov (selfselected respondents) 67% 67% 69% 70% 70% 69% 70% 70%

(ensure transparency of operations 

to the public)

Timeliness of responses 

(ensure transparency within the 

government)

Average days to close a FOIA 

case2 50 53 35 21 35 NA NA NA

Percentage of FOIA requests ontime or less than 30-days overdue2 NA NA NA NA 33% 15% 33% 33%

Percentage of Congressional 

correspondence responses drafted 

within 10 days

98% 99% 98% 100% 100% 92% 100% 100%

Clean audit opinion on TARP 

financial statements

Yes Yes Yes Yes Yes Yes Yes Yes (ensure transparency within the 

government)

100% 100% 100% 80% 100% 100% 100% 100%

Percentage of SIGTARP and GAO 

oversight recommendations 

responded to on time

(ensure transparency within the 

government)

1

Items underlined are measures. Targets are provided only for measures.

2

The ‘Average days to close a FOIA case’ measure was discontinued in third quarter FY 2014 to best reflect available 

reporting data. OFS now reports ‘Percentage of FOIA requests on-time or less than 30-days overdue’.
OFS - 18

Section 4 – Supplemental Information

4A – Summary of Capital Investments

OFS uses Departmental Office’s (DO) system and is part of DO’s capital investment strategy.

A summary of capital investment resources, including major information technology and nontechnology investments, can be viewed/downloaded at: http://www.treasury.gov/about/budgetperformance/Pages/summary-of-capital-investments.aspx

This website also contains a digital copy of this document.