WASHINGTON (AP) ¿ The Treasury Department said Tuesday seven more banks have been approved to participate in the government's $700 billion rescue effort, and that a Colorado mortgage company was chosen to participate in a foreclosure mitigation program.
The department said the government would purchase a total of $45.5 million in preferred stock in the seven banks, bringing the total supplied through the program to $198.02 billion for more than 500 banks.
The purchases of preferred stock, essentially government loans to the banks, are designed to bolster the banks' capital reserves so they will resume more normal lending to consumers and businesses.The banks receiving the largest stock purchases were Village Bank and Trust Financial Corp. of Midlothian, Va., which got $14.74 million, and Security State Bank Holding Co. of Jamestown, N.D., which received $10.75 million. The government also announced that Aurora Loan Services LLC of Littleton, Colo., had been selected to receive up $798 million in incentives to help homeowners refinance into more affordable mortgages. This program is designed to combat a wave of mortgage foreclosures occurring in the wake of the worst housing downturn in decades.