Question

What is the Bank Regulations during 2007-2009 ( Great Recession ) ?

GIVE DEFINITIONS ABOUT ALL OF THESE TERMS:

TARP; HERA; Federal Housing Finance; Regulatory Reform Act of 2008; HOPE for homeowners act of 2008; SAFE Secure and Fair Enforcement for Mortgage Licesing Act of 2008; Forecosure Prevention Act of 2008 and FHA Modernization 2008; Emergency Economic Stabilization Act of 2008; Helping Families Ave Their Homes Act of 2008.

Answer 1

Presidents George W. Bush and Barack Obama signed into law several major legislative responses to the financial crisis of 2008. The most influential and controversial of these was the Dodd-Frank Wall Street Reform and Consumer Protection Act, which introduced a raft of measures designed to regulate the activities of the financial sector and protect consumers. Another notable law was also the Emergency Economic Stabilization Act, which created the Troubled Asset Relief Program (TARP). Moreover, the Federal Reserve took up many new and additional measures of its own.

Dodd-Frank

Dodd-Frank was signed into law in July 2010 and brought sweeping reforms to the U.S. financial sector. It branched out into many of the governing regulations already in place for setting standards in the securities and financial trading markets. It also built several new types of protections, namely the Consumer Financial Protection Bureau (CFPB), which has become an important agency in helping monitor and protect the financial interests of American consumers.

Dodd-Frank focus areas were broken down into the following sections:

• Systemic Risk (Titles I and VIII)
• Federal Reserve (Title XI)
• Resolution Regime for Failing Firms (Title II)
• Securitization (Title IX)
• Bank Regulation (Title I, III, VI, and X)
• Consumer Financial Protection (Title X)
• Mortgage Standards (Title XIV)
• Derivatives (Titles VII and XVI)
• Credit Rating Agencies (Title IX)
• Investor Protection (Title IX)
• Hedge Funds (Title IV)
• Executive Compensation and Corporate Governance (Title IX)
• Insurance (Title V)
• Miscellaneous Provisions

Emergency Economic Stabilization Act

In October 2008, a divided Congress passed the Emergency Economic Stabilization Act, which provided the Treasury with approximately $700 billion to purchase "troubled assets," mostly bank shares and mortgage-backed securities. The Troubled Asset Relief Program, as the program was known, ultimately spent $426.4 billion bailing out institutions, including American International Group Inc. (AIG), Bank of America (BAC), Citigroup (C), JPMorgan (JPM), and General Motors (GM). The Treasury recovered $441.7 billion from TARP recipients.

TERMS-

TARP -The Troubled Asset Relief Program (TARP) was an initiative created and run by the U.S. Treasury to stabilize the country’s financial system, restore economic growth, and mitigate foreclosures in the wake of the 2008 financial crisis. TARP sought to achieve these targets by purchasing troubled companies’ assets and stock.

HERA -The Housing and Economic Recovery Act (HERA) was drafted to address the fallout from the subprime mortgage crisis of 2008. The Housing and Economic Recovery Act allowed the Federal Housing Administration (FHA) to guarantee up to $300 billion in new 30-year fixed-rate mortgages for subprime borrowers. In order to participate, lenders were required to write down the balances on principal loans up to 90 percent of their current appraised value.

Federal Housing Finance; Regulatory Reform Act of 2008-

Federal Housing Finance Regulatory Reform Act of 2008 - Amends the Federal Housing Enterprises Financial Safety and Soundness Act of 1992 to replace the Office of Federal Housing Enterprise Oversight of the Department of Housing and Urban Development (HUD) with the Federal Housing Finance Agency (Agency), headed by a Director with regulatory authority over the following entities: (1) the Office of Finance; and (2) the Federal Home Loan Banks (FHLBs); (3) the Federal National Mortgage Association (Fannie Mae); and (4) the Federal Home Loan Mortgage Corporation (Freddie Mac).

HOPE for Homeowners act of 2008

HOPE for Homeowners was a federal aid program designed to help homeowners in financial distress due to the collapse of the subprime mortgage market in 2008. Backed by the Federal Housing Administration (FHA), the HOPE for Homeowners Act was one of the steps the federal government took to help stabilize the housing market and protect qualified homeowners from loan default and foreclosure. The program was active between October 1, 2008, and September 30.

SAFE Secure and Fair Enforcement for Mortgage Licesing Act of 2008

The Secure and Fair Enforcement for Mortgage Licensing Act of 2008 (SAFE Act) was enacted on July 30, 2008, and mandates a nationwide licensing and registration system for residential mortgage loan originators (MLOs).

The SAFE Act prohibits individuals from engaging in the business of a residential mortgage loan originator without first obtaining and maintaining annually:

• For individuals who are employees of covered financial institution, registration as a registered mortgage loan originator and a unique identifier (federal registration)
• For all other individuals, a state license and registration as a state-licensed mortgage loan originator, and a unique identifier (state licensing/registration)

Forecosure Prevention Act of 2008 and FHA Modernization 2008

The Federal Housing Administration (FHA) has been insuring lenders against loss on home loans since 1934, and has insured about 35 million homes at a mortgage volume of about $2 trillion. In past years, FHA was often the innovator in testing new mortgage products, but in recent years the private mortgage market has been offering mortgages that appealed to borrowers who otherwise may have sought FHA-insured home loans. As a result, the FHA share of the mortgage market declined. FHA reform measures were debated in previous sessions of Congress, but FHA reform proved controversial and these efforts stalled. Momentum for FHA reform grew as the downturn in the housing market worsened in 2008. Reform measures were introduced in the 110th Congress and some of the provisions were included in the Housing and Economic Recovery Act of 2008, P.L. 110-289, enacted July 30, 2008. Title I of Division B of P.L. 110-289 is cited as the FHA Modernization Act of 2008, and it contains two subtitles. Subtitle A, the Building American Homeownership Act of 2008, makes several amendments to the FHA program that insures loans on single family homes under Title II of the National Housing Act. Subtitle B, the FHA Manufactured Housing Loan Modernization Act of 2008, makes several amendments to the FHA program that insures loans on manufactured housing loan program under Title I of the National Housing. This report discusses the provisions of these subtitles. The changes enacted in these subtitles affect the delivery of FHA-insured home loans in communities throughout the United States. This report may be updated as warranted by issues related to implementing the new law.

Emergency Economic Stabilization Act of 2008

Emergency Economic Stabilization Act (EESA) is a law passed by Congress in 2008 in response to the subprime mortgage crisis. It authorized the Treasury secretary to buy up to $700 billion of troubled assets and restore liquidity in financial markets

The Emergency Economic Stabilization Act of 2008, often called the "bank bailout of 2008," was proposed by Treasury Secretary Henry Paulson, passed by the 110th United States Congress, and signed into law by President George W. Bush

Helping Families Ave Their Homes Act of 2008.

The Housing and Economic Recovery Act (HERA) of 2008 established the temporary HOPE for Homeowners program. The program allows homeowners to avoid foreclosure, using the Federal Housing Administration (FHA) insurance program structure already in place at the U.S. Department of Housing and Urban Development (HUD).