Treasury gives $121.8 million to 12 banks under $700 billion bailout program

Treasury gives $121.8M to 12 banks under bailout

WASHINGTON — The Treasury Department has approved 12 more banks to participate in the $700 billion financial rescue program.

The 12 institutions will receive a total of $121.8 million, Treasury said Tuesday, with about half going to Standard Bancshares Inc. of Hickory Hills, Ill.

The government also said it had added a 12th mortgage company to its program to provide relief to homeowners in danger of losing their homes to foreclosure. St. Paul, Minn.-based Green Tree Servicing Inc. was approved for up to $156 million in incentives, bringing the total for that program to $14.1 billion.

The administration on Tuesday said it was expanding its $75 billion effort to stem the housing crisis by offering mortgage lenders incentives to lower borrowers’ bills on second mortgages, which have been a significant stumbling block for many homeowners trying to refinance.

The 12 new banks participating in the government’s capital purchase program brings the total supplied to $198 billion for 565 financial institutions.

The government is providing the banks with loans from the bailout fund as a way of bolstering their reserves in an effort to get them to resume more normal lending to consumers and businesses.

The banks received the money on Friday. Under the law that created the program, the government has two business days to publicly disclose transactions involving the bailout fund.