Jeff Bingaman United States Senator from New Mexico

Troubled Assets Relief Program (TARP): In October 2008, Congress enacted the Emergency Economic Stabilization Act (EESA) to respond to instability in U.S. financial institutions, caused particularly by these institutions' being saddled by delinquent mortgages. That legislation created the Troubled Asset Relief Program (TARP).

The root of the problem can be traced back to banks that made home loans to consumers who could not afford to pay them back. These mortgages—often referred to as subprime mortgages—were bundled together, sometimes with solid loans and sometimes just with other subprime mortgages, and sold to Wall Street investors. In turn, these investors often resold these "mortgage-backed securities" to other investors. Eventually, as homeowners began defaulting on mortgages, investors discovered they had invested in assets that were losing money. So many investors participated in the purchasing and selling of these assets that the collapse of the mortgage-backed security market deeply impacted the most corners of the U.S. banking and financial services sector. With banks severely impaired, they began hoarding capital and stopped lending to businesses and individuals. As a result of this "credit crunch," many businesses have had to lay off employees. 

To address the problem, Congress authorized the U.S. Treasury to spend $700 billion to stabilize the economy through TARP. The first $350 billion was released last fall. Before the second $350 billion is released, Congress is developing legislation that would inject oversight of the way TARP funds are used, including strict restraints on corporate pay.   

New Mexicans are hard-hit by our struggling economy. I have heard from people who have lost their jobs, their homes, and those who are worried about the possibility of both those of things happening in the near future. I am committed to helping shape a more effective TARP program that alleviates the effects of the economic slowdown for New Mexico families.

I understand that it must be frustrating to watch Members of Congress debate when you feel that action is long overdue. But we are grappling not only with the weight of a struggling economy; we are grappling with the responsibility to use public funding in the most effective way possible as we attempt to halt the economic crisis. I am determined to work diligently and consider all proposals to ensure that TARP helps New Mexicans as much as it can.

Further Assistance: If you are experiencing difficulty with a mortgage and are worried about defaulting on your loan, please visit the U.S. Department of Housing and Urban Development's HOPE for Homeowners page. This program was established with the first TARP tranche to help struggling homeowners and has information on how you can avoid losing your home.

The New Mexico Mortgage Finance Authority is another valuable reference for struggling homeowners, as well as the United South Broadway Corporation. Both can provide information and assistance.

The U.S. Department of Treasury provides up-to-date information on news on TARP and other economic packages before Congress.

Businesses seeking financing assistance can contact the New Mexico Small Business Development Council.