X

Thank you for sharing!

Your article was successfully shared with the contacts you provided.

WASHINGTON, DC-The government’s oft-maligned financial sector rescue plan, the Troubled Asset Relief Program–or TARP–appears to be having some benefit for the commercial real estate industry–even if it is not apparent to the majority of borrowers seeking capital.

A survey by the Special Inspector General for Treasury found that more than 80% of US banks that received federal bailout funds said that the money was used in part to increase lending–or if not that, then to avoid cutting back on corporate and commercial lending. Of more immediate impact to the commercial real estate industry, one-third of banks surveyed said they used some of the funds to buy mortgage-backed securities issued by Fannie Mae and Freddie Mac. Another 40% said they used the funds to build up capital in anticipation of unexpected losses in this recession.

Unfortunately, it is the latter category–the banks applying the federal funds to their own balance sheets–that have captured the ire of the public and Congress, says one broker who did not wish to be quoted by name about this program. More than TALF–the Term Asset Lending Facility to buy up asset-backed securities–TARP has become a dirty word on Main Street and in Congress–something that Wall Street is well aware of, this person said.

Still, though, the survey makes clear that banks expanding their lending activities through TARP are in the minority. About 29% claimed to use TARP funds for residential loans, 18% for commercial mortgages and 17% for consumer loans, such as auto loans and personal lines of credit.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?

GlobeSt. APARTMENTS SPRING 2021Event

Join 1000+ of the industry's top owners, investors, developers, brokers & financiers at THE MULTIFAMILY EVENT OF THE YEAR!

Get More Information
 

GlobeSt

Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.