“Obviously we still have a few kinks in the system,” Treasury Secretary Henry Paulsen told a hastily assembled Washington, D.C. news conference, after published reports that the Government had made its first purchase of troubled real estate after the passage of the bank bailout bill.
Richard Alvarez, a Tampa mortgage broker, applied online through the Treasury Department’s website, seeking relief because his business had declined precipitously in light of the real estate crisis. He had sought $180,000 for his home, for which he had paid $240,000 in 2004, but a “oversight, a typo, really,” according to Secretary Paulsen, resulted in the $1.8 billion payout.
“The system is not geared to buy individual homeowner’s homes,” Paulsen told reporters. “Its purpose is to bail out the banks by taking unsaleable commercial paper out of the marketplace. How Mr. Alvarez’s situation slipped past our regulators is something we’re looking closely at.”
Paulsen denied a reporter’s assertion that “the federal government hiring bankers to fix the banking system, after bankers looted the banking system, is analogous to hiring members of Sadaam Hussein’s inner circle to run the new government of Iraq.”
“I see the logic behind what you’re saying,” Paulsen admitted, “but to be fair, we’ve had six years to work things out in Iraq and just a few weeks to get this bailout rolling. But once we have some time to get a plan in order, you won’t see any individual homeowners getting assistance. I mean, we’re the Government, right? What did Kennedy say, ‘Ask not?’ If you’re a banker and you’re out of work, or if your bank is in trouble, come see us. Otherwise, America, have a nice day.”
Mr. Alvarez, who has since relocated to Dubai, could not be reached for comment.
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