Treasury Plans to Offer Loans to Buy Bad Assets - Latest Geithner Flimflam - Government-backed 95% equity loans to banks to buy toxics assets from other banks at a steep discount.
The New York Times Edmund L. Andrews, Eric Dash and Graham Bowley
WASHINGTON — The Treasury Department is expected to unveil early next week its long-delayed plan to buy as much as $1 trillion in troubled mortgages and related assets from financial institutions, according to people close to the talks.
Industry analysts estimate that the nation’s banks are holding at least $2 trillion in troubled assets, mostly residential and commercial mortgages made at the height of the housing bubble.
Although the details of the F.D.I.C. part were still being finalized on Friday, it is expected the government would provide the overwhelming bulk of the money — possibly more than 95 percent — through loans or direct investments of taxpayer money.