Most TARP Money for Housing Relief Still Unspent
Homeowners facing foreclosure received less than 10 percent of the $45.6 billion Congress allocated for federal and state housing relief programs, according to a quarterly report submitted July 25 to Congress from the special inspector general of the Troubled Asset Relief Program.
In its report, SIGTARP censured the U.S. Department of the Treasury for not setting goals for states involved with the Hardest Hit Fund, a program launched in 2010 by the Obama Administration to help homeowners avoid foreclosure in regions hardest hit by steep home price declines and unemployment.
“Rather than set meaningful goals for HHF and measure progress against those goals, Treasury chooses instead to rely on its requirement that each state estimate the number of households to be assisted,” SIGTARP noted in its report. “This number has limited usefulness. By refusing to set any goals for the programs, Treasury is subject to criticism that it is attempting to avoid accountability.”
According to the report, only 1.7 percent of the $7.6 billion HHF money was spent. Funding went to state housing finance agencies to use for principal reduction, modification and unemployment programs.
About $29.9 billion was allocated for the Home Affordable Modification Program for short sales and leniency for homeowners dealing with unexpected unemployment, according to the report. By the end of June, only 6.4 percent of that money was spent.
The report also showed that Treasury allocated $8.1 billion for one program that would allow current borrowers who owe more than their homes are worth to refinance into a Federal Housing Administration-backed loan. According to the report, only 1.7 percent has been spent, and fewer than 1,500 borrowers made it through the program since its conception in September 2011.
Read the SIGTARP report.