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Government Bailout
The federal government committed an additional $800 billion to two new loan programs on November 25th 2008, bringing its cumulative commitment to financial rescue initiatives to a staggering $8.5 trillion. Given the unprecedented size and complexity of these programs and the fact that many have never been tried before, it's impossible to predict how much they will cost taxpayers. The final cost won't be known for many years.
Most of the money is going into loans or loan guarantees, asset purchases or stock investments on which the government could see some return.
Economic rescue
Key points in the federal government's campaign to alleviate the economic crisis.
  • In March of 2008, the Federal Reserve announced a rescue package to provide up to $200 billion in loans to banks and investment houses and let them put up risky mortgage-backed securities as collateral.
  • President Bush signed a housing bill including $300 billion in new loan authority for the government to back cheaper mortgages for troubled homeowners.
  • The Treasury took over mortgage giants Fannie Mae and Freddie Mac, putting them into a conservator ship and pledging up to $200 billion to back their assets.
  • President Bush officially signed the $700 billion economic bailout package. Treasury Secretary Henry Paulson says the money will be used to buy distressed mortgage-related securities from banks.
  • A New economic rescue package created by the Obama Administration has recently been approved by Congress. See Obama’s Housing Plan.

Where has the bailout money gone?
  • Pledged 700 billion in The Troubled Asset Relief Program (TARP) originally designed to purchase troubled assets and later redirected to mainly direct money infusion to a few banks and automakers. $388 billion had been allotted, and $296 billion spent ($195 billion to purchase bank equity shares)

  • American Recovery and Reinvestment Act of 2009 (Obama Stimulus Package) pledged 778.5 billion divided between tax cuts (288 billion), healthcare (147.7 billion), education (90.9 billion), aid to unemployed and low income workers (82.5 billion), infrastructure (80.9 billion).

  • $50 billion pledged for mortgage foreclosure mitigation.

Regional Information **
The current loan modification rules as well as foreclosure and loan modification statistics vary greatly from state to state. Select your state below to get a better understanding of your current local situation.
Alabama
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Ohio
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Texas
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Vermont
Virginia
Washington D.C.
West Virginia
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