To register or ask any questions, please contact Evan Kendall at evan.kendall@bryancave.com or 404.572.4523.

Related Posts

1. Distressed Assets Roundtable - November 23, 2008
2. Powell Goldstein Troubled Assets Conference - October 25, 2008
3. News Roundup — September 9, 2009 to September 18, 2009 - September 18, 2009

Loan Sale Tips

The volume of purchase and sale of performing and non-performing real estate loans has picked up dramatically over the past year as banks seek to shrink their balance sheets as their capital base falls and other banks and investors seek to take advantage of the sale of assets from failing banks. What are the typical features of such agreements and what are the interests of buyers and sellers in such transactions?

Sellers

The bank which is selling a loan, whether it is performing or non-performing, seeks to cut itself off from the borrower and the collateral just as if it had never made the loan to begin with. To evidence such a transaction, the seller would essentially like to enter into the equivalent of a quit claim or limited warranty deed containing very few warranties and representations. The structure of such an agreement would typically provide for the following items:

1. Identification of the parties and the subject loans.
2. Listing of the loan documents including notes, loan agreements, mortgages, security agreements, UCC filings and related documents such as title policies, appraisals, engineering drawings, surveys, environmental exams, etc.
3. A due diligence period during which the buyer has full access to the loan documents and has time to conduct title exams, environmental audits and such other examination of the borrower and any collateral as it deems necessary.
4. Seller’s representations and warranties will be limited to the following:
   • Seller has the authority to enter into the transaction and there are no other parties who could claim ownership to the loans.
   • The execution and delivery of all instruments and documents required hereunder to be obtained or authorized by the Seller in order to consummate this transaction have been or will be obtained and authorized as so required.
   • To the best of Seller’s knowledge and belief without duty of inquiry or investigation, Seller has complied with, and has performed, all obligations required to be complied with or performed by it under the loan documents.
   • The outstanding principal amount of the loans.
   • Seller is a sophisticated entity with respect to the sale of the loans; and has adequate information to make an informed decision regarding the sale of the loans.
   • The status of whether the loan
5. Buyer’s representations will include similar representations about its ability to enter into the sale agreement and the fact that it is a sophisticated party that understands the risks inherent in purchasing a loan.

With an agreement set up in this fashion the seller is comfortable that once the transaction closes it is no longer affected by anything which happens with the borrower or the collateral. The ability of a seller to obtain an agreement structured in this fashion, however, is dependent upon the leverage which it has. Oftentimes, if the sale is simply to another local bank it will not be difficult to structure the agreement in this manner since another local lender is familiar with both the borrower and the collateral. If the buyer is out of market, a private equity investor or simply a more demanding buyer, the seller will find it much more difficult to obtain a “quit-claim” type of agreement.

Buyers

Buyers have much more interest in obtaining stronger representations and post-sale protections from the seller. For example, a buyer may seek representations of the following:

1. The seller has not engaged in any act, conduct or omission, or had any relationship with the borrower, that might reasonably subject seller or buyer to liability or result in buyer receiving proportionately less payments or distribution or less favorable treatment than any other similarly-situated creditor of the borrower.
2. Seller has not received any notice, claim, or demand from or on behalf of the borrower that (a) any transfer, including payments received from or on account of the loan, is or may be void or voidable as actual or constructive fraudulent transfers or (b) the loan or any portion thereof is or shall be voided, avoided, reduced, expunged, subordinated, disallowed, or subject to any defense, claim, counterclaim, setoff, or recoupment or other impairment of any kind, and seller has no knowledge of any fact or allegation that, if true, could have any such effect.
3. There are no delinquent taxes, ground rents, water charges, sewer rents, assessments, insurance premiums, leasehold payments, including assessments payable in future installments or other outstanding charges affecting any real property constituting the collateral.
4. Each mortgage, deed of trust or other instrument creating a lien on any real property collateral to secure the obligations arising under the loan creates a valid, existing and enforceable first lien on the real property collateral.
5. Any and all requirements of any federal, state or local law including, without limitation, usury, truth in lending, real estate settlement procedures, consumer credit protection, equal credit opportunity or disclosure laws applicable to the origination, servicing and collection of the loan (including, with respect to each adjustable rate loan, all requirements pertaining to origination and servicing of adjustable rate loans) have been complied with.
6. Each of the loan documents to be sold is genuine and each is the legal, valid and binding obligation of the maker thereof, enforceable in accordance with its terms.
7. There is no default, breach, violation or event of acceleration existing under any mortgage or any promissory note and no event which, with the passage of time or with notice and the expiration of any grace or cure period, would constitute a default, breach, violation or event of acceleration, and the seller has not waived any default, breach, violation or event of acceleration.  (This representation is one which can only be made for performing loans. Loans which are past due or which are in bankruptcy will require a different set of representations).
8. To the best of the seller’s knowledge all parties to the promissory note and any mortgage had legal capacity to enter into the applicable loan and to execute and deliver the promissory note and corresponding mortgage, and the promissory note and the applicable mortgage have been duly and properly executed by such parties.

The interest of the buyer in such a transaction is to insure that should its due diligence fail to uncover all problems with the credit it will retain a claim back against the seller to make it whole. As a part of this the buyer may include a generals indemnification provision which will require the seller to defend the buyer against any lender liability claims which the borrower brings which is based on actions occurring pre-sale. The seller thus maintains a certain amount of contingent risk that it may have to reimburse the buyer or repurchase the loan at some point in the future. This risk can be mitigated to some extent by establishing a time period when the representations and warranties will no longer be effective. Buyers also need to keep in mind though that rights of indemnification are only as good as the party standing behind them. Sometimes the financial condition of the seller is such that the buyer should focus more on its due diligence than trying to obtain rights against a seller that may not be around in the long term.

Other Considerations

Purchase and sale agreements can get much more complex when the borrower is in bankruptcy. In such an instance the parties may need to address how distributions from the bankruptcy case are to be treated. For example, what happens if adequate protection payments made by a borrower are somehow required to be repaid to the debtor pursuant to an order of the court? Likewise, what happens if the claim is made subject to equitable subordination? These and other possible risks are beyond the scope of this client alert. Suffice it to say though that any party, whether a seller or buyer, should seek capable legal assistance when entering into a loan purchase and sale agreement, regardless of whether the loan is performing, non-performing or the subject of a bankruptcy case.

Questions?

Should you have further questions or desire additional assistance, please contact:

B.T. Atkinson, Partner – Charlotte
(704) 749-8954
btakinson@bryancave.com

Jerry Blanchard, Partner – Atlanta
(404) 572-6804
jerry.blanchard@bryancave.com

John G. Boyle, Partner – St. Louis
(314) 259-2165
jgboyle@bryancave.com

Ronald B. Emanuel, Partner – New York
(212) 541-2334
rbemanuel@bryancave.com

Ren R. Hayhurst, Partner – Irvine
(949) 223-7125
rrhayhurst@bryancave.com

Jim Wheeler, Partner Atlanta
(404) 572-4561
james.wheeler@bryancave.com

Related Posts

1. Treasury and the Federal Reserve Announce the Term Asset-Backed Securities Loan Facility - November 27, 2008
2. Policy Statement on Prudent Commercial Real Estate Loan Workouts - November 1, 2009
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Chairman Bair explained, “Banks have been able to raise capital without having to sell bad assets through the Legacy Loans Program, which reflects renewed investor confidence in our banking system. As a consequence, banks and their supervisors will take additional time to assess the magnitude and timing of troubled assets sales as part of our larger efforts to strengthen the banking sector.”

As a next step, the FDIC will test the funding mechanism contemplated by the Legacy Loans Program in a sale of receivership assets this summer.  This funding mechanism draws upon concepts successfully employed by the Resolution Trust Corporation in the 1990s, which routinely assisted in the financing of asset sales through responsible use of leverage. The FDIC expects to solicit bids for this sale of receivership assets in July.

Related Posts

1. FDIC Conference Call on Legacy Loans Program - April 9, 2009
2. Summary of Public-Private Investment Program - April 3, 2009
3. Treasury Announces Asset Guarantee Program - January 5, 2009

• extended the $250,000 deposit insurance limit through December 31, 2013;
• extended the length of time the FDIC has to restore the Deposit Insurance Fund from five to eight years;
• increased the FDIC’s borrowing authority with the Treasury Department from $30 billion to $100 billion;
• increased the SIGTARP’s authority vis-a-vis public-private investment funds under PPIP (including the implementation of conflict of interest requirements, quarterly reporting obligations, coordination with the TALF program); and
• removed the requirement, implemented by the American Recovery and Reinvestment Act of 2009, for the Treasury to liquidate warrants of companies that redeemed TARP Capital Purchase Program preferred investments.  The Treasury is now permitted to liquidate such warrants at current market values, but is not required to do so.

This extension does not affect the Transaction Account Guarantee provided by the FDIC’s Temporary Liquidity Guarantee.  The Transaction  Account Guarantee, which provides an unlimited guarantee of funds held in noninterest bearing transaction accounts, is still scheduled to expire on December 31, 2009.

The FDIC has not revised the official FDIC Insurance sign, which still speaks of insurance limits of up to $100,000.  However, if a financial institution has previously posted a notice of the increase to $250,000 through December 31, 2009, it should update that notice.  As stated by the FDIC, a financial institution may post the following statement next to the official FDIC sign:

The standard insurance amount of $250,000 per depositor is in effect through December 31, 2013. On January 1, 2014, the standard insurance amount will return to $100,000 per depositor for all account categories except IRAs and other certain retirement accounts, which will remain at $250,000 per depositor.

Related Posts

1. Dodd-Frank’s Proposed FDIC Insurance Changes - July 1, 2010
2. Revised Call Report for Transaction Account Guarantee - December 11, 2008
3. Deadline Approaching – Opt-Out Deadline for Extended Transaction Account Guarantee is November 2, 2009 - October 22, 2009

While the city’s residential real estate lot inventory woes are well known to the investment community, we believe the extent of inventory in CRE property types like office and retail centers is not fully appreciated.  We took some photos of residential and CRE properties around Atlanta, which is admittedly a small sample.  Based on our observations and the statistics, we believe there are significant and growing vacancies around the city, particularly in the outer suburban areas like Alpharetta and Cumming (North of Atlanta).  We witnessed particularly high vacancy rates in numerous outer suburb strip and neighborhood retail centers.  Atlanta’s retail vacancy rate was 9.9% at the end of 1Q09, compared to the national average rate of 7.2% and Atlanta’s 4Q08 level of 9.0%.  This is the sixth highest level of retail vacancy among the 63 major U.S. retail markets.  Moreover, Atlanta led all major U.S. markets in aggregate retail space delivered during 1Q09, with 1.7 million square feet hitting the market.

Related Posts

1. Policy Statement on Prudent Commercial Real Estate Loan Workouts - November 1, 2009
2. FDIC Takes Dim View on Raising Capital via Minority Interests in Real Estate Subsidiaries - January 4, 2010
3. Does the Treasury need to Mark-to-Market? - February 6, 2009

Investors wishing to participate in the Legacy Loans Program should complete the preliminary application.  The Legacy Loans Program Summary, Fact Sheet, and FAQ are also available.

At the outset, the FDIC repeatedly advised that this call was for information and discussion purposes only and specifically “not for attribution” to the FDIC.

The FDIC Chairman, Sheila Bair, presented very brief opening remarks, and gave certain background information.   She reminded callers that on March 23, 2009, Mr. Geitner announced the Legacy Loans Program, to be administered by the FDIC.   The FDIC’s Proposed Term Sheet regarding the Legacy Loans Program is currently on the FDIC’s website, where the FDIC is currently still seeking comment and input, until tomorrow, April 10, 2009.  The Term Sheet provides the FDIC’s 17 initial questions.   Ms. Bair confirmed that the Legacy Loans Program is intended for all banks, large and small and that today’s call focuses on the investor perspective.

John Bovenzi, the FDIC’s Chief Operating Officer, then made brief remarks before opening the call to questions.  He confirmed that all FDIC insured institutions of all sizes can participate as sellers.  The FDIC will be hiring, registering, and opening up bids for contractors to help administer the program, including specifically valuation experts.  What was most clear from the call is that virtually all aspects of the sales process continue to be worked on, including material terms such as eligibility of assets, the FDIC fee for its guarantee, and the terms of the loan documents.

Selected questions and answers follow:

• Timing:  “As promptly as we can.”
• Guarantee Fee:  Will be based on the underlying portfolio, rather than on the skill set of the investor group.  The fee is being structured, and is expected, to cover all FDIC costs, included any potential losses.
• Exit strategy:  Deal documents will set forth the requirements for the management and disposition of assets, which will vary by asset pool, whether commercial, residential, raw land, development, or otherwise.
• OREO:  The FDIC has not yet determined whether OREO will be included as eligible assets.  The eligibility of mezzanine loans secured by equity, with a real estate component, also has not been determined, nor have other asset categories.
• Write-down:   Banks still need to write-down losses on each loan.  One question proposed a longer term during which the bank can write-down loan losses.
• Guaranteed debt:  The terms of the FDIC guaranteed debt, including whether public or private, are still undetermined.

Many questions were actually comments, which, as stated above, are due April 10, 2009. Much more information will certainly follow.

Related Posts

1. Delay in Legacy Loans Program - June 3, 2009
2. Summary of Public-Private Investment Program - April 3, 2009
3. Director Stock Loans Made by Silverton Bank - February 22, 2010

Legacy Loans Program

The Legacy Loans Program will be launched by Treasury and the Federal Deposit Insurance Corporation (“FDIC”).  The intent of this joint program is to combine (i) private capital, (ii) equity co-investment from Treasury and (iii) FDIC debt guarantees in order to assist market priced sales of distressed assets and improve the private demand for distressed assets.  The FDIC will supervise the formation, funding and operation of a series of Public-Private Investment Funds (“PPIFs”) which will purchase assets from U.S. banks.  Each PPIF will be comprised of a joint venture between private investors and the Treasury.  Treasury will manage its investment in the PPIF to ensure that the interest of the public is protected and preserved.  However, private investors will retain control of the asset management subject to “rigorous supervision” of the FDIC.

Private investors in the Legacy Loans Program are expected to include but are not limited to financial institutions, individuals, insurance companies, mutual funds, publicly managed investment funds, pension funds, foreign investors with a headquarters in the United States, private equity funds, hedge funds and other long-term real estate investors.  U.S. banks of all sizes will be eligible to participate in the program.  U.S. banks participating in the program will consult with the FDIC, banking regulators and Treasury to identify assets that they propose to sell.  Eligible assets are required to be predominately situated in the United States.  The FDIC will hire third party valuation consultants to analyze the assets and determine the level of debt that the FDIC will be willing to guarantee on such properties.  The debt guaranteed by the FDIC will not exceed a 6 to 1 debt-to-equity ratio.  The FDIC will receive an annual fee for providing the guaranty and such guaranty will be collateralized by the pool of assets purchased.

Private investors that are pre-qualified with the FDIC will bid for the assets in an auction conducted by the FDIC.  Each bidder will be required to post a deposit equal to 5% of its bid value which will be refunded if such bid is not accepted.  In an effort to maintain fairness, private investors will be prohibited from cooperating with one another once the auction process is commenced.  The equity contribution together with the amount of debt previously agreed to be guaranteed by the FDIC will comprise the purchase price of the assets.  The U.S. bank selling such assets will then be permitted to decide whether or not to accept the offer price.

If the bid is accepted by the bank selling the assets, the private investors that won the bid will contribute 50% of the equity to the PPIF, and Treasury will contribute the remaining 50%.  However, private investors may be permitted to accept a smaller equity contribution from Treasury subject to a minimum equity contribution yet to be determined.  In accordance with the Emergency Economic Stabilization Act of 2008 (the “EESA”), Treasury will also receive warrants in the PPIF for its equity contributions.  The terms of such warrants have yet to be disclosed by Treasury.  The debt issued by a PPIF in connection with the purchase of a pool of assets is expected to be initially placed at the bank that sold such pool of assets.  The selling bank will be able to resell the debt into the market.  It is contemplated that the credit-enhancement of the FDIC guaranty will make the debt more attractive to potential buyers in the market.

The executive compensation restrictions that currently apply to TARP will not apply to a “passive private investor” in this program.  At this stage it is unclear whether or not the entities that manage the PPIF will be impacted by the executive compensation restrictions.  The exact structure of the Legacy Loans Program will be subject to the standard comment and rulemaking procedures of the FDIC.  The FDIC is currently in the process of accepting public comments until April 10, 2009.

Legacy Securities Program

The Legacy Securities Program, which will be administered by Treasury, is designed to provide both equity and debt financing to make it possible to acquire legacy securities that will initially include residential and commercial mortgage backed securities.  The Legacy Securities Program consists of two components.  The first component involves the selection of approximately five (5) fund managers (each an “FM”) by Treasury with which Treasury will co-invest in PPIFs to acquire legacy securities.  The other component is the expansion of the Term Asset-Backed Securities Loan Facility (“TALF”) to provide non-recourse loans to investors to be utilized in the purchase of legacy security assets.

Legacy Securities PPIFs

The Legacy Securities PPIFs component of the program will provide each of the FMs a limited period of time to raise at least $500 million in private equity capital through a private investment vehicle.  Private investors will be prohibited from withdrawing any money invested in the private investment vehicle for three years after the private investment vehicle’s first investment in a legacy security.  ERISA plans will be permitted to invest in the private investment vehicles, but the amounts of such investments will be left to the FM to determine.  Once the FM raises at least $500 million, the FM would contribute the private equity capital raised by it to a PPIF.  Treasury would invest TARP funds in the newly created PPIF matching the funds raised by the FM dollar-for-dollar.  One major concern that FMs need to be aware of is that Treasury maintains the right, in its sole discretion, to refuse to fund any committed but undrawn Treasury equity capital and debt financing (described below) at any time.  In addition to Treasury’s equity interest in the PPIF, Treasury will receive warrants in accordance with the EESA for its investment in the PPIF.  The terms of such warrants have yet to be disclosed by Treasury.

Provided that the structure of the PPIF meets certain guidelines yet to be determined, the FMs will have the opportunity to apply for senior debt from Treasury in amount up to 50% of the PPIF’s total equity capital, but Treasury will consider requests for up to 100% of the PPIF’s equity capital subject to asset level leverage, redemption rights, disposition priorities and any other factors deemed relevant by Treasury.  Treasury intends this debt to have the same duration as the underlying fund and such debt shall be repaid on a pro-rata basis as proceeds are realized by the PPIF.  The loans described above will be structurally subordinated to any loans made by the New York Federal Reserve under TALF.

Treasury expects the PPIFs to initially target commercial mortgaged back securities and residential mortgaged backed securities that received an AAA rating or an equivalent rating by at least two nationally recognized ratings organizations which are secured directly by the actual mortgage loans, leases and other assets.  Nevertheless, each FM will control the asset selection, pricing, liquidation, trading and disposition of such assets.  The PPIFs will be prohibited from purchasing legacy securities from (i) affiliates of its FM,  (ii) 10%-or-larger private investors invested in the PPIF or (iii) any other FM or such FM’s affiliates.  FMs will be permitted to charge a fixed management fee to Treasury and private investors based on a percentage of equity capital invested by such party.  All fees and expenses paid by Treasury in connection with the PPIF will be paid out of the equity contributions made by Treasury to the PPIF.

Treasury plans to make its preliminary selections of FMs by May 1, 2009.  Fund managers interested in participating in the Legacy Securities Program have until April 10, 2009 to submit an application to Treasury.  Per Treasury, each candidate must (i) be able to raise at least $500 million of private equity capital, (ii) have experience and a track record investing in comparable assets, (iii) have $10 billion of comparable assets under management and (iv) demonstrate the capacity to manage the PPIF in accordance with guidelines established by Treasury.

TALF Expansion

The second component of the Legacy Securities Program deals with the expansion of TALF eligible assets to include certain non-agency commercial and residential mortgaged back securities that were originally AAA rated.  TALF is currently governed by the New York Federal Reserve.  Although the interest rates, minimum loan size and term of TALF loans for this program have not been established, Treasury has indicated that it is working with the New York Federal Reserve to modify the current structure of TALF loans so that TALF can accommodate this new class of eligible assets.  Borrowers will need to meet certain criteria in order to be eligible for TALF funds, but this criteria has yet to be established.  As stated earlier, all TALF loans will be structurally senior to any Treasury loans made under the Legacy Securities Program because of certain requirements of the New York Federal Reserve.  Many additional questions regarding the expansion of the TALF program will hopefully be addressed when program specifics are disseminated by the New York Federal Reserve and Treasury.

Conclusion

Treasury plans to initially invest an aggregate of $75 to $100 billion of TARP funds between both the Legacy Loans Program and the Legacy Securities Program.  This investment, together with the capital invested by private investors, will produce $500 billion in purchasing power with the ability to expand to $1 trillion over time to help improve the health of financial institutions and unlock the credit markets.

Resources:

• Public-Private Investment Program Fact Sheet, March 23, 2009
• Public-Private Investment Program Press Release, March 23, 2009
• Public-Private Investment Program White Paper, March 23, 2009
• Legacy Loans Program Term Sheet, March 23, 2009
• Legacy Loans Program Frequently Asked Questions, March 23, 2009
• Legacy Securities Program Term Sheet, March 23, 2009
• Legacy Securities Program Frequently Asked Questions, March 23, 2009
• Application for Private Asset Managers under Legacy Securities Program, March 23, 2009

Related Posts

1. Delay in Legacy Loans Program - June 3, 2009
2. FDIC Conference Call on Legacy Loans Program - April 9, 2009
3. TALF Investments (May update) - May 20, 2009

• a map showing the local impact of the TARP Capital Purchase Program (larger view).  Like BankBryanCave.com, the Treasury also provides a Google Map of TARP Recipients.  Unfortunately, the Treasury’s Google Map suffers from a “feature” of Google Maps that limits the number of pins shown on the map; as a result, only the first 100 or so recipients (alphabetically) are included on the map.  The BankBryanCave.com Map of TARP Capital Infusions shows all TARP Capital Purchase Program recipients, and also differentiates between recipients based on when the TARP Capital funds were received.  (For comparison purposes, the Treasury’s map was created on March 11, 2009 and, as of March 31, 2009, has been viewed 265 times.  Our map was created on November 25, 2008 and has been viewed over 11,294 times.)
• simplified economic data, which may help citizens (and bank customers) understand and monitor the need and impact of TARP.
• a secret decoder ring* to help translate the various terms and acronyms used under TARP.  ABS, AGP, CAP, CPP, EESA, MBS, SSFI, TIP and TARP are all included.

*It’s not actually a decoder ring, but is called the “Decoder.”

The website appears to still be actively being developed and revised, as links to various documents from the previous website have appeared while this post was being edited.

Related Posts

1. Update: How Much TARP is Left? - March 31, 2009
2. The Shifting Boundaries of the TARP Capital Purchase Program - November 9, 2008
3. TLGP and the Election Form - December 3, 2008

In stepped the Federal Reserve.  As opportunity funds and hedge funds across the country and across the world begin to digest the parameters, requirements, and restrictions relating to the Fed’s $1 Trillion lending initiative known as TALF (Term Asset-Backed Securities Loan Facility) attempting to revitalize the stagnant credit markets, several issues have begun to emerge.

The most important criterion for many of our clients is eligibility.  TALF was announced in November as an attempt to create a market for small business loans.  It has been enlarged to include equipment financing, auto paper, and other consumer credit.

The initial key for hopeful participants will be establishing the primary dealer relationship, as described in the FAQ.

How does an entity participate in the TALF program?

An eligible borrower must be a customer of a primary dealer and must have executed a customer agreement authorizing the primary dealer, among other things, to execute the master loan and security agreement (MLSA) as agent for the borrower and to perform all actions required on their behalf. The MLSA will provide further details on the requirements that will apply to the entities seeking to borrow from the FRBNY under the TALF.

Important Links:

• Federal Reserve FAQ
• Federal Reserve Terms and Conditions
• Federal Reserve White Paper

Related Posts

1. TALF Investments (May update) - May 20, 2009
2. Treasury and the Federal Reserve Announce the Term Asset-Backed Securities Loan Facility - November 27, 2008
3. TALF Primary Dealers - March 27, 2009

And that got Price to thinking: What if Citizens were to use its federal bailout money to offer below-market mortgage rates with no closing costs to consumers who would buy a house, or a house lot, from builders and developers who had borrowed money from Citizens?

Price asked some of his loan officers to check with the builders and developers, who not surprisingly were excited enough about the project to be willing to chip in some money to help cover a portion of the forgone closing costs.  So last week, Citizens launched its marketing campaign for the $20.5 million program, in collaboration with its builder-developer customers, offering 30-year loans with an initial teaser rate of 3.5 percent for the first two years, rising to a fixed 5.5 percent rate (the current market rate) for the balance of the loan.

“As we see it, it’s a win-win-win situation all round,” Price explained to me. The builders and developers win by having a tool to help move their unsold inventory.  The consumer wins by getting a cut-rate loan.  And Citizens wins because it lowers the risk that it will have to write off even more of its commercial loans while taking a modest step to help stimulate the local economy.  And, of course, the public relations bump isn’t bad either.

Offering special mortgage rates to consumers who buy lots from the bank’s builders can be a great way to address the slowing real estate market generally, with or without TARP Capital.

Related Posts

1. SIGTARP Seeks Use of TARP Funds - March 4, 2009
2. TARP CPP Redemptions Begin - March 31, 2009
3. Treasury to Ask Recipients About Use of TARP Funds - January 26, 2009