Mortgage plan coming soon: Neel Kashkari
Neel Kashkari, who is heading the government's $700 billion financial rescue effort, told Congress the Treasury is working hard on the plan. 2008: Year of financial crisis
By Agencies |
WASHINGTON: The US Treasury Department official Neel Kashkari charged with implementing the government's financial rescue plan said on Thursday that markets were improving in response to proposals to inject capital into banks. He said the department intends to get a program to help struggling US homeowners revise mortgages up and running soon.
Neel Kashkari, who is heading the government's $700 billion financial rescue effort, told Congress the Treasury is working hard on the plan. It could include setting standards for changing mortgages to make them more affordable and giving loan guarantees to banks that meet them.
Kashkari told a Senate hearing Thursday that ``we are passionate about doing everything we can to avoid preventable foreclosures.''
"Since the announcement of our capital purchase program, we have seen numerous signs of improvement in our markets and in the confidence in our financial institutions," Neel Kashkari, Treasury's interim assistant secretary for financial stability, said in prepared testimony for delivery to the Senate Banking Committee.
But, he added, "the markets remain fragile."
Treasury said on October 14 it was pumping $250 billion into U.S. banks, part of a $700-billion congressionally approved bailout package that eventually is also to include purchasing unwanted and illiquid mortgage assets from banks to cleanse their portfolios.
The government will take equity stakes in the banks that pay dividends.
Kashkari repeated that the action to aid banks should be considered an investment that may make money for taxpayers:
"The government will not only own shares that we expect will result in a reasonable return, but also will receive warrants for common shares in participating institutions."
Any banks in the program will have to strengthen efforts to help struggling homeowners avoid foreclosures, Kashkari said.
Private-sector analysts have warned that a rising number of mortgage-holders are near the point where they owe more on their mortgage loans than their houses are worth, heightening the risk that the pace of foreclosures will escalate sharply.
Neel Kashkari, who is heading the government's $700 billion financial rescue effort, told Congress the Treasury is working hard on the plan. It could include setting standards for changing mortgages to make them more affordable and giving loan guarantees to banks that meet them.
Kashkari told a Senate hearing Thursday that ``we are passionate about doing everything we can to avoid preventable foreclosures.''
"Since the announcement of our capital purchase program, we have seen numerous signs of improvement in our markets and in the confidence in our financial institutions," Neel Kashkari, Treasury's interim assistant secretary for financial stability, said in prepared testimony for delivery to the Senate Banking Committee.
But, he added, "the markets remain fragile."
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Treasury said on October 14 it was pumping $250 billion into U.S. banks, part of a $700-billion congressionally approved bailout package that eventually is also to include purchasing unwanted and illiquid mortgage assets from banks to cleanse their portfolios.
The government will take equity stakes in the banks that pay dividends.
Kashkari repeated that the action to aid banks should be considered an investment that may make money for taxpayers:
"The government will not only own shares that we expect will result in a reasonable return, but also will receive warrants for common shares in participating institutions."
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Any banks in the program will have to strengthen efforts to help struggling homeowners avoid foreclosures, Kashkari said.
Private-sector analysts have warned that a rising number of mortgage-holders are near the point where they owe more on their mortgage loans than their houses are worth, heightening the risk that the pace of foreclosures will escalate sharply.
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