Thread: NYT; Washington Announces Trillion $ Property Purchase Plan

By EDMUND L. ANDREWS, ERIC DASH and GRAHAM BOWLEY
Published: March 20, 2009

[Ed:]"The Plan" to be announced next week involves creation of more SPVs* (LP/LLC/UIT Trusts)
with governement backed loans to transfer mortgages from "troubled financial institutions" to
government backed SPVs.

(NYT) Industry analysts estimate that the nation’s banks are holding at least $2 trillion
in troubled assets, mostly residential and commercial mortgages.

The plan to be announced next week involves three separate approaches. In one,
the Federal Deposit Insurance Corporation will set up special-purpose investment
partnerships and lend about 85 percent of the money that those partnerships will
need to buy up troubled assets that banks want to sell.

Although the details of the F.D.I.C. part were still being completed on Friday, it is expected
that the government will provide the overwhelming bulk of the money — possibly more than
95 percent — through loans or direct investments of taxpayer money...

*SPV: Special Purpose Vehicle, entity tailored for specific purpose. Example: Limited Partnership
agreement limiting scope of business to "investment in securities or commercial real estate".

http://www.nytimes.com/2009/03/21/bu....html?_r=1&WRH

By DEBORAH SOLOMON


U.S. Sets Plan for Toxic Assets

The plan, which has been eagerly awaited by jittery investors, includes creating an
entity, backed by the Federal Deposit Insurance Corp., to purchase and hold loans. In
addition, the Treasury Department intends to expand a Federal Reserve facility to include
older, so-called "legacy" assets. Currently, the program, known as the Term Asset-Backed
Securities Loan Facility, or TALF, was set up to buy newly issued securities backing all manner
of consumer and small-business loans. But some of the most toxic assets are securities
created in 2005 and 2006, which the TALF will now be able to absorb.

http://online.wsj.com/article/SB123758981404500225.html