Resolution Trust Corporation:

Asset Purchase Option for Resolution of City Federal Savings Bank

GGD-93-77: Published: Apr 30, 1993. Publicly Released: Apr 30, 1993.

Additional Materials:

Contact:

Office of Public Affairs
(202) 512-4800
youngc1@gao.gov

Pursuant to a congressional request, GAO reviewed the Resolution Trust Corporation's (RTC) asset purchase option agreement to determine whether the selection and sale of assets complied with asset disposition statutory requirements, focusing on: (1) the City Federal Savings Bank resolution transaction and asset purchase option; and (2) RTC obligations and efforts to satisfy the requirements of the asset purchase option.

GAO found that: (1) RTC succeeded in resolving City Savings without an insured deposit payout and acted within its authority when it structured the terms and conditions of the asset purchase option; (2) although RTC acted within its authority and delivered $1 billion in assets to another thrift under a similar asset purchase option agreement, RTC was unable to provide the remaining $2 billion in assets as required by the option agreement without using an alternative underwriting arrangement; (3) RTC may have used questionable judgement in structuring the option's terms and conditions; (4) problems RTC experienced in fulfilling the asset purchase option included restrictive asset option requirements, a decrease in RTC residential mortgage inventory, and increased use of residential mortgage securitization; and (5) RTC planned to discontinue the use of asset purchase options due to problems in fulfilling the option's requirements.

Dec 19, 2014

Dec 17, 2014

Nov 20, 2014

Oct 6, 2014

Sep 17, 2014

Aug 5, 2014

Jul 31, 2014

Jun 18, 2014

Looking for more? Browse all our products here