Many people think that U.S. Secretary Henry Paulson planned to use the second half of the recent $700 billion financial rescue program to buy up all of those devalued mortgages that are fluttering in the wind. If you are among these “theorist”, you probably need to think again. That mortgage juice is going to be spent on consumer credit instead. Any industry that has any form of consumer credit, will receive aid, which should include a payday cash loan, but most likely won't. Paulson says he wants every American to have easier access to any traditional form of credit, such as car loans, student loans, and credit cards. “This is creating a heavy burden on the American people and reducing the number of jobs in our economy,” he says. Of course it is, but was it necessary to spend all this time concocting your previous version of your rescue plan that would actually uphold that “heavy burden?” At least he admits to his mistake. If America had a President who was willing to do the same, perhaps America could make the best of the broken pieces and move on, or maybe certain problems would’ve been prevented in the first place. However, government officials seem to have the right mindset: they’re planning to use some of the bailout money to encourage private investors to come back to the market. We would have a more stable job market and fewer people will depend upon payday cash when the tide is low. Of course, the industry will always be there to provide financial assistance in case of unforeseen events, but it is not designed for long-term reliance. By understanding this, we must anticipate for better reason if we wanted to have stability in terms of financial needs.


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The authority of the United States Department of the Treasury to establish and manage a Troubled Assets Relief Program (TARP) managed by a newly created Office of Financial Stability and became law last October 3, 2008. The law which created the fund authorized the Treasury to draw up to $250 billion for immediate use, then requires the President to certify that an additional $100 billion in funds are needed; a final $350 billion are subject to Congressional approval. Secretary of the Treasury Paulson indicated that reviving the securitization market for consumer credit would be a new priority in the second allotment, while legislators proposed loans to the struggling automobile industry. Apparently, it wasn’t enough to cover the mortgage crisis up with a TARP. No, Treasury Secretary Paulson’s Troubled Asset Relief Program wasn’t the kind of credit repair scores the endangered homeowners needed. Now that Federal Deposit Insurance Corp Chairman Sheila Bair has pushed a new mortgage modification program forward, 1.5 million homeowners will have someone new on their side when they’re facing foreclosure. This $24.4 billion program will be drawn from the $700 billion pool that TARP set up, and it’s a very straightforward system. Lenders will be given a stipend of $1,000 per loan they renegotiate with financially stuck homeowners, and in the event of default on a loan, the FDIC has promised to take on up to 50 percent of the loss. Paulson has condemned this as mere spending that will only bankrupt the FDIC, others view this action on Bair’s part as a needed investment to maintain liquidity in the mortgage industry. While this won’t solve all of the problems at once, it’s certainly a valiant effort to help repair credit, isn’t it? Click to read more on Credit Repair.