TOXIC ASSET SOLUTION DETAIL

Asset Purchase Program Details
THE ASSOCIATED PRESS March 23,2009

The Obama administration's plan to finance purchases of as much as $1 trillion in toxic assets from banks will include programs supported by the Treasury Department's bailout fund, the Federal Reserve and the Federal Deposit Insurance Corp. Here is a look at how they will operate.

--Public-Private Investment Program: The umbrella organization that will support the effort to entice private investors to join with the government to purchase troubled assets. The administration plans to commit $75 billion to $100 billion from the government's $700 billion bailout program to support $500 billion in troubled asset purchases initially with the potential to expand to $1 trillion over time.

--Troubled Mortgage Loans: The FDIC, the agency that insures deposits at the nation's banks, would operate auctions of troubled mortgage loans and then provide financing to the winning bidders. Under an example provided by the administration, the FDIC loan would cover 86 percent of the purchase price of the troubled mortgages with the Treasury's bailout fund contributing 7 percent and the winning private investor bidder contributing the remaining 7 percent.

--Troubled Asset-Backed Securities: The Treasury and the Federal Reserve announced they were expanding the Term Asset-Backed Securities Loan Facility, or TALF, beyond its goal of boosting consumer debt in the area of credit cards, auto loans and student loans. The facility, which has the capacity of supporting $1 trillion in loans, will be expanded to cover securities backed by residential and commercial real estate and other types of asset-backed mortgages. Five asset managers will be chosen by Treasury to compete for purchases of troubled asset-backed securities with financial backing provided by Treasury and the TALF. The assets would be held in public-private investment funds.