Treasury OKs 3 firms for mortgage relief program

Date: 30-06-2009

The Treasury Department said Tuesday that it has approved three more firms for its mortgage relief program.

The new approvals brought the number of companies participating in the mortgage effort to 23 with the total amount authorized for all of the firms rising to $17.98 billion out of a maximum of $50 billion the government has said it could spend on this program.

The money is being provided to support the government's effort to combat a wave of mortgage foreclosures by giving incentives for homeowners to modify their existing mortgages.

The new approvals for this program included National City Bank of Miamisburg, Ohio; Technology Credit Union of San Jose, Calif., and Citizens First Wholesale Mortgage Co. of The Villages, Fla.

The government also confirmed Tuesday that Hartford Financial Services Group Inc. had become the first among a group of six major life insurers to get assistance from the government's $700 billion financial rescue fund.

Hartford won approval in May from the government to gain access to the bailout program. The six companies had sought federal aid in the wake of major investment losses resulting from the financial market turmoil of last fall.

Hartford announced the federal support on Friday, but under the rules that govern the bailout program, Treasury has two business days to acknowledge transactions involving the fund.

The $3.4 billion in support provided to Hartford was by far the largest award on Tuesday. In addition, a group of 15 smaller banks received $226 million from the rescue fund bringing the total in support to $203.2 billion.

Last week, Treasury established a process for pricing billions of dollars worth of warrants that banks much repurchase from the government to exit the bailout program. Treasury said that the banks can make the first offer of a purchase price and then Treasury will decide whether to accept that offer or make a counteroffer.