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NCUA to address five items

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ALEXANDRIA, Va. (4/21/09)—The National Credit Union Administration will consider five items at its open board meeting this morning, including a proposed rule on Part 706 of its Unfair or Deceptive Acts or Practices rule. Also on the agenda:
* Delegations of authority, Office of Small Credit Union Initiatives; * Creditor claim appeal; * Budget, Office of Capital Markets and Planning and Central Liquidity Facility; and * A monthly National Credit Union Share Insurance Fund report.

Loan mod participation agreements available online

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WASHINGTON (4/21/09)—The agreement lenders and servicers must execute in order to participate in the Obama administration’s loan modification program is now available on a number of associated websites. Fannie Mae, the "financial agent" charged—along with the U.S. Treasury Department--with managing the Obama administration's loan modification program, recently posted the agreement form on its website. It is also available on the Freddie Mac website and at a government website named after the administration’s loan modification program, “Making Home Affordable.” Also available at those sites is online guidance regarding the loan modification program, including some recently updated information. As noted April 9 in News Now, both Freddie Mac and Fannie have substantial roles both the refinance and the modification components of the administration plan meant to mitigate foreclosures. The updated guidance covers a broad range of subjects. For instance, a section discusses the Net Present Value (NPV) Test and how it should be applied under the Making Home Affordable (HMP) loan modification program. All loans that meet the HMP eligibility criteria, as described in the online materials, and are either deemed to be in “imminent default” or at least 60 days delinquent must be evaluated to determine whether their NPV dictates that the loan would be modified or moved toward foreclosure. Use the resource links below to access the websites.

Geithner to testify on TARPs first six months

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WASHINGTON (4/21/09)—The Congressional Oversight Panel charged with keeping tabs on the expenditures of the Troubled Asset Relief Program (TARP) set a hearing today at which U.S. Treasury Secretary Timothy Geithner will testify. Earlier this month the panel released a six-month report on TARP, which indicated mixed results of the Treasury program’s success to help resolve the country’s financial crisis. Elizabeth Warren, the panel’s chairman, said at the time that the Treasury's outlook on the crisis has focused on banks' problems as temporary and has failed to acknowledge that the crisis may be deeper. The report noted that Treasury has spent or committed about $590.4 billion of the total $700 billion in TARP funds approved by Congress, and has relied on the Federal Reserve's balance sheet to leverage the spending--which has expanded by more than $1 trillion. Warren said, "Treasury's efforts to date could be enough, but we will continue to press them."

Inside Washington (04/20/2009)

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* WASHINGTON (4/21/09)--President Barack Obama has picked Fannie Mae President/CEO Herbert Allison to lead the Troubled Asset Relief Program (TARP) as assistant Treasury secretary for financial stability. If approved by the Senate, Allison would replace Neel Kashkari (The Associated Press April 19). Some financial observers have said that if Allison moves from his post at Fannie to lead TARP, it will send a message that the CEO position at the government-sponsored enterprises is irrelevant because the Federal Housing Finance Agency runs Fannie and Freddie (News Now April 16) ... * WASHINGTON (4/21/09)--Investors haven’t borrowed from the Term Asset-Backed Securities Loan Facility (TALF) because they fear borrowing money from the Federal Reserve would trigger congressional scrutiny, said William Dudley, president of the Federal Reserve Bank of New York. The concern is unnecessary, but could indicate that investors don’t want to take risks in the economic environment--which in turn could be detrimental for businesses and consumers who want to secure credit (American Banker April 21) ...