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December 17th, 2008

Paulson’s Last Month Could Be a Quiet One

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Henry Paulson’s last month as Treasury Secretary is likely to be a quiet one, barring any unforeseen financial emergencies. Mr. Paulson has made a few statements as of late suggesting that the probability of any final big-ticket decisions by him is slim.

In a CNBC interview, Mr. Paulson said he does not plan to seek the second half of the TARP funds. Yet, Paulson did refer to the Treasury’s ongoing attempt to provide the Big Three with a bridge loan, funded by the remaining billions of the TARP’s first installment:

Treasury Secretary Henry Paulson said he doesn’t plan to ask Congress for the rest of the $700 billion Wall Street bailout fund before leaving office next month, but indicated that could change if there is an emergency in financial markets.

“The autos will get the money as quickly as we can prudently do it,” Paulson said. “What we can do with the TARP, if we do it, is a bridge (loan) and it will be temporary. But it needs to protect the taxpayer and it needs to have a path to viability.”

Separately, Mr. Paulson said he “isn’t contemplating a plan to set a 4.5%-target mortgage rate.” Rumors of a discussion that caught national media attention quickly fizzled, as neither the Treasury Department nor the Federal Reserve ever made an official announcement, and talks never progressed. The secretary extinguished the possibility of such a plan yesterday, at least for the remainder of the current administration. (Read HSH’s criticisms of the discussed “plan” here.) Mr. Paulson did confirm the Fed’s ongoing initiative of purchasing billions of Fannie and Freddie’s mortgage-backed securities in order to ease fixed-mortgage rates downward.

Readers: Where does Henry Paulson rank in responsibility for the financial crisis?

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About the HSH Blog

HSH.com's daily blog focuses on the latest developments in the mortgage and housing markets. Our mission is to relate how changes in mortgage rates and housing policy, as well as the latest financial news, impacts consumers, homebuyers and industry insiders alike. Our 30-plus years of experience in the mortgage industry gives us an edge as we break down the latest changes in an ever-changing market.

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Tim Manni

Tim Manni is the Managing Editor of HSH.com and the author of their daily blog, which concentrates on the latest developments in the mortgage and housing markets.

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