Six Years Later, TARP Programs Remain Active

According to a recent report from the Government Accountability Office, the Department of Treasury is still managing $2.9 billion worth of assets through five non-housing programs in the Troubled Asset Relief Program (TARP), and has incurred costs of $37.4 billion through TARP's housing programs.

TARP was authorized in 2008 and intended to strengthen the U.S. housing and financial sectors in the wake of the subprime mortgage crisis. Congress authorized $700 billion in funding (later reduced to $475 billion) to purchase assets from major institutions like GM and AIG, in an attempt to encourage the banking system to continue lending cash rather than hoard it in fear of another financial system meltdown.

As of September 30, 2014, GAO reported that Treasury had exited four of nine non-housing programs initiated under TARP. Six of the programs received repayment income above the initial investments made, while three of them incurred net costs:

GAO reported that Treasury is still managing $2.9 billion worth of assets in the five non-housing programs it had not yet exited.

The program also established several housing assistance programs, which were allocated $38.5 billion to provide relief to the housing sector, though Treasury never expected to recover those amounts. GAO's report noted that $13.7 billion -- 36 percent -- of those funds had been disbursed as of September 30, 2014. That leaves about $24.7 billion in funding available for housing assistance.

Perhaps the most notable housing-related program established under TARP was the Home Affordable Modification Program (HAMP). HAMP offered lending agencies financial incentives to rework homeowners' mortgage loans in order to make them easier to pay back. It's expected that the program will continue for several years (through at least December 31, 2016), but participation is declining: according to GAO, the number of new loan modifications under HAMP "fell in 2014 to the lowest level since the program's inception."

To date, there have been over 3.6 million mortgage loan modifications made under HAMP and the program has incurred costs of $37.4 billion, an average of more than $10,000 per modification.