The United States Treasury Department (the “Treasury”) has announced a series of initiatives as part of its Financial Stability Plan to stimulate the purchase of troubled assets comprised of real estate loans held directly on the books of FDIC insured banks (“legacy loans”) and securities backed by loan portfolios held by banks and other financial institutions (“legacy securities”). The plan is centered around the formation of the Public-Private Investment Program (the “Program”) through which the Treasury will work in conjunction with the FDIC and the Federal Reserve to attract new private capital into the market. The Treasury intends to use between $75 to $100 billion in capital from the Troubled Asset Relief Program (TARP) along with capital from private investors to generate between $500 billion and $1 trillion in purchasing power over time. While the Program launch is still several weeks away, and subject to a specific notice and comment rulemaking period, the Program presents new opportunities for private sector entities to participate in various capacities.

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