“Glossary” Terms for Mortgage Menders! (T-Z)

Here’s the final post in this series….to review…

“Glossary” Terms for Mortgage Menders! (A-C)

“Glossary” Terms for Mortgage Menders! (D-G)

“Glossary” Terms for Mortgage Menders! (H-M)

“Glossary” Terms for Mortgage Menders! (O-S)

and now (T-Z)…..

TALF—One of the lesser-known Federal government programs to solve credit crisis of 2007-2008-2009. Formally known as the the Term Asset-Backed Securities Loan Facility, TALF was created by the Federal Reserve in November, 2008 to facilitate renewed issuance of consumer and small business loans at “normal” interest rates. The program supports the issuance of securities backed by student loans, auto loans, credit card loans, and loans guaranteed by the Small Business Administration. Under TALF, the Federal Reserve will lend up to $1 trillion to holders of certain AAA-rated securities backed by new and recent consumer and small business loans. The reasoning behind the program is that new issuance of the types of loans covered declined precipitously in September, 2008 and came to a halt in October, 2008. At the same time, interest rates on them soared. It was thought that continued unavailability of these types of credit could significantly contribute to further weakening of U.S. economic activity.

TARP–The Emergency Economic Stabilization Act of 2008, commonly referred to as TARP, standing for “troubled assets relief program.” Popularly considered to be a bailout of the U.S. financial system, it authorizes the U.S. Treasury to spend $700 billion to purchase toxic assets, particularly mortgage-backed securities, and to make capital injections into banks. The Act was proposed by Treasury Secretary Hank Paulson as an antidote to the freezing of credit markets during the global financial crisis of 2007-2008-2009.After being considerably amended, rejected once, and rewritten in the course of a frenzied week, the bill was passed on October 3, 2008. It was signed by President George W. Bush a few hours later, reflecting its emergency aura.

Too big to fail–The notion that the largest and most interconnected banks, or other businesses, must be saved when they blow up by bailouts, because their failure would present unacceptable systemic risk. The notion has been used to justify bailouts for some of the largest banks involved in the credit crisis of 2007-2008-2009, including Bear Stearns, Goldman Sachs (GS), and insurer AIG. True believers in the free market system mock the too big to fail doctrine, believing that big banks and other institutions should be allowed to fail if their risk management was not effective.

Toxic assets—Assets held by financial institutions that are highly risky, usually overleveraged, backed by other assets of dubious value, difficult to value, and therefore difficult to sell. Examples would include collateralized debt obligations and subprime mortgages. Institutions holding large proportions of toxic assets find themselves in big trouble. Example: Lehman Brothers, which collapsed in 2008. Toxic assets present a serious problem for would-be purchasers because of their complexity and dubious value. Often having been repackaged several times, it is difficult and time-consuming for auditors and accountants to determine their true value, which may depreciate steadily as the ability of underlying debtors to repay declines. See also legacy assets.

Treasury, Department of—An executive department of the U.S. Federal government. The Department is administered by the Secretary of the Treasury, currently Timothy Geithner, who is a member of the Cabinet and confirmed by the Senate before taking office. The Treasury Department prints and mints all paper currency and coins in circulation, collects all Federal taxes through the Internal Revenue Service, and manages U.S. government debt instruments. The Department is currently prominently engaged in various bailout activities, including the recently established PPPIC.

Wall Street—Generic term referring collectively to the major financial institutions and the most influential interests in the financial system of the U.S. The “real” Wall Street is in lower Manhattan and is the center of the biggest financial district in the world. Several major U.S. stock and other exchanges are headquartered on Wall Street and in the surrounding financial district, including the New York Stock Exchange, the NASDAQ stock exchange, and the New York Board of Trade. When the general public wants to assess blame for the credit crisis of 2007-2008-2009, it commonly just refers to Wall Street as the root of the entire problem.

Hope this helped you understand a lil better

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