The US government has distributed around one percent of its US$7.6 billion federal fund to help homeowners manage foreclosures, according to reports.
In February 2010, the Hardest Hit Fund was granted to 18 states most affected by depreciated home prices and unemployment. The states established their own programmes to help the unemployed in the lower-income bracket and underemployed homeowners.
The Treasury Department reported that by 30 June, only 17 states had utilised the funds to aid approximately 7,500 homeowners. New Jersey only started distributing loans this month. The programme was launched in May.
State officials said that the funds are being released more rapidly now and all states have already launched their own programmes.
“We are ramping up quickly now,” says Di Richardson, Head of the California programme. California’s programme started in January and has funded more than 2,000 homeowners.
Officials noted that developing the systems for states to borrow data and transfer funds to mortgage servicers, who manage the loans, took longer than expected.
“That was more complicated than we thought it would be,” said Cynthia Flaherty, Head of Ohio’s programme, adding that Ohio now has 200 servicers with 500 borrowers being added to its programme monthly.
“You wish states could move quicker. But you also don’t want them to waste the money,” remarked Ira Rheingold, Executive Director of the National Association of Consumer Advocates.
Treasury Spokeswoman, Andrea Risotto, noted that the programme required “considerable infrastructure.”
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