Industry NewsMortgage

Treasury moves to implement ‘rescue’

Paulson: Mortgages key to turnaround

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The Treasury Department is "moving rapidly" to implement a plan to buy up toxic assets from banks and financial institutions, but financial markets continue to be "severely strained" and the plan is not intended to save every bank. Treasury Secretary Henry Paulson said he's appointed an interim assistant secretary to begin managing and implementing the Emergency Economic Stabilization Act, which authorizes the government to borrow up to $700 billion to buy troubled assets, purchase or insure mortgages, and inject capital directly into financial institutions. Paulson said he is working with President Bush to identify a leader to oversee the program, whom he hopes will be confirmed by the Senate as soon as possible after lawmakers return from recess in November. The Treasury secretary said the housing correction "is the root cause of the current financial market turmoil" and that mortgage credit must stay available in order to "more quickl...