Charlotte Real Estate, Foreclosures, Short Sales

Treasury Secretary Timothy Geithner's Public-Private Investment Program, or PPIP will provide up to $1 trillion in financing and guarantees to private investors to kick-start the frozen credit markets.  The Public-Private Investment Program will purchase real-estate related loans from banks and securities from the broader markets. Banks will have the ability to sell pools of loans to dedicated funds, and investors will compete to have the ability to participate in those funds and take advantage of the financing provided by the government.

By offering leverages and guarantees, the Treasury will start lending $75 to $100 billion to encourage investors to buy non-performing loans to help frozen credit markets.  Here's the breakdown.  To help private investors buy pools of non-performing loans,  The FDIC will insure the majority of the purchase price of the deal, the Treasury Department will finance 50% and investors will be responsible for for 7%. 

A key part of that regulatory framework will give the government new resolution authority to take over troubled institutions that would pose a threat to the entire financial system if they failed.   Under the new powers being sought by the administration, the treasury secretary could only seize a firm with the agreement of the president and the Federal Reserve.

Mark Zandi, an economist at Moody's Economy.com, estimated that the government will need an additional $400 billion to adequately deal with the toxic asset problem, seen by many analysts as key to finally resolving the banking crisis.  Zandi said the administration has no choice but to rely heavily on government resources because of the urgency of getting soured real estate loans and troubled asset-backed securities off the books of banks so that they can resume more normal lending to consumers and businesses.
We will wait and see how promising the PPIP will be in jump starting frozen credit markets and helping the economy out of recession.  Positives are expected overall for our real estate market along with loan modifications and an increase in approved short sales from lenders.