Resolution Trust Corporation

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Resolution Trust Corporation

(RTC), in U.S. history, government-owned company formed in 1989 to liquidate the assets of insolvent savings and loan associationssavings and loan association
(S&L), type of financial institution that was originally created to accept savings from private investors and to provide home mortgage services for the public.

The first U.S. S&L was founded in 1831.
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 (S&Ls). Essentially a huge property-management company operated as an agent of the federal government, the RTC had as its primary mission the disposal (at maximum value) of office buildings, homes, loans, and other assets that were held by bankrupt thrifts in order to reduce taxpayer costs associated with the S&L bailout. Hundreds of S&Ls, which had taken advantage of lax regulations and invested in high-risk real estate and other imprudent assets, failed in the 1980s, and after the Federal Savings and Loan Insurance Corporation itself became insolvent and the Federal Deposit Insurance Corporation assumed its responsibilites, the RTC was created. By the time the RTC was dissolved in 1995, it had closed or reorganized 747 institutions and managed to sell off some $400 billion in assets. The eventual cost to the taxpayers was approximately $130 billion, well below original estimates.
References in periodicals archive ?
The Bailey family waded deeper into apartment investing during the bargain hunting days of the Resolution Trust Corp. Formed during the savings and loan crisis, the RTC supervised the liquidation of real estate and other assets owned by failed S&Ls during 1989-95.
Earlier, Wolk served as Assistant General Counsel for real estate and asset disposition at the Resolution Trust Corp. and the Federal Deposit Insurance Corp., where he had senior agency legal and management responsibility for the real estate, affordable housing, environmental, and workout sections of the RTC's legal division.
Similarly, in 1989, Buffett and two partners bought a large retail property adjacent to New York University after the bursting of a bubble in commercial real estate so significant that the Resolution Trust Corp. was established to sell off failed banks' real estate assets.
Prior to joining RBS, Larocca was a senior vice president at Lehman Brothers in the mortgage finance business, managed the consumer and single family securitisation business for the Resolution Trust Corp., practiced law with the firms of Milbank, Tweed, Hadley and McCloy as well as Kutak Rock.
Before moving to Florida in 1995, he worked as a federal regulator with the Resolution Trust Corp. and was appointed director of lending at AT&T Employees FCU.
It would enable them to pool together all the bad assets into a 'bad bank', an idea that has a successful precedent in Resolution Trust Corp that emerged from the saving and loans crisis of the 1980s.
Another new entity, the Resolution Trust Corp., was created to resolve the insolvent S&Ls.
It's too early to know whether a government-created entity, such as a Resolution Trust Corp., should be formed to buy these subprime assets to give them more value prior to a discount sale, Gregg said.
The envisaged bailout entity is expected to be modeled after Resolution Trust Corp. that was set up in the late 1980s to solve the savings and loans crisis.
The plan is reminiscent of the Resolution Trust Corp (RTC), a government agency set up to help the nation out of the savings and loan crisis in the 1980s.
The model mentioned most often is the Resolution Trust Corp., the government entity that bought and disposed of the assets of failing savings and loan institutions in the 1980s and '90s.
An 11-year veteran of Freedom, earlier Henry was with The Resolution Trust Corp. for five years.