Julie Schmit, wrote an interesting article in USA TODAY, called “$1B foreclosure aid program ends with $568 million unspent.” The link is live or read it below.
“The federal government will disburse just $432 million from a $1 billion program to help unemployed homeowners avoid foreclosure, a government official said Thursday.” [Emphasis Added.]
“The rest of the money will return to the U.S. Treasury because the Emergency Homeowners’ Loan Program has ended, and not enough people were approved in time to receive aid.” [Emphasis Added.]
“The funding provided forgivable loans up to $50,000 to temporarily help unemployed or underemployed people avoid foreclosure in 32 states and Puerto Rico. Out of 100,000 applicants, 11,832 were conditionally approved for the program that the government initially said could help up to 30,000 people. Assistance will average $35,000 to $45,000 a homeowner, said Brian Sullivan, a spokesman for the Department of Housing and Urban Development.”
“The program’s failure to reach or process enough applicants in time is “sad and shameful,” says Lewis Finfer, executive director of the Massachusetts Communities Action Network. It worked to pass the legislation to make the program possible. Finfer, other community groups, and Rep. Barney Frank, D-Mass., have said that HUD took too long to launch the program.”
Ken here. So they didn’t get it together, it’s “….sad and shameful,” and “…they took to long to launch…..” What’s up with that. Read on.
“HUD started taking applications in June — almost a year after the program was made possible by Wall Street reform legislation — and six months later than HUD first intended. The deadline for HUD to commit the funds was Sept. 30. Of the 32 states, five had similar programs, so they ran their own while HUD administered the program in the other 27 states.”
“Pennsylvania, one of the five, spent its entire allocation of $106 million and approved 3,056 homeowners — 26% of the U.S. total. Only Texas and New York got more funds than Pennsylvania.”
“The HUD loans are to be forgiven if homeowners keep their homes for five years.”
“We understand that there is disappointment that the program is not reaching more families,” said Carol Galante, HUD’s acting assistant secretary for housing, in prepared testimony for a congressional hearing Thursday reviewing the Obama administration’s response to the nation’s foreclosure crisis.”
“Galante repeated HUD’s defense that the program’s setup “took longer than anticipated.” She also said the program’s eligibility requirements, which were defined by the law that created the program, disqualified a higher number of applicants than anticipated.”
“Finfer and others say HUD added additional eligibility requirements and failed to advertise the program.”
Ken here. Typical Govt. Bureaucrat crap out? Or, intentional feet dragging? You decide. Point is they went through multi-millions and left 586 Billion Dollars on the table that could have helped folks keep their homes. Therefore, before folks get mad at folks who have lost their homes driving down prices throughout the neighborhood, realize, the Govt., is screwing up your home values as well, maybe worse than your neighbor who tried. Looks like the Govt., didn’t try very hard. Finally, this is another part of Foreclosure Gate — Govt. — twist.