Monday, March 12, 2012

$7.6 billion in Hardest Hit funds trickle down to only a lucky few

Greta Guest, Detroit Free Press

In the two years since it was launched, the federal Hardest Hit program has paid out only about 11% of the $7.6 billion that is supposed to be provided to struggling homeowners who collect unemployment, suffered a wage cut or had a medical emergency.

Michigan, which received the fourth highest amount, has committed just 6.1% — $30.2 million — of its nearly $500 million, helping 2,897 homeowners, according to U.S. Treasury data.

Critics say desperate homeowners in need of temporary help are not getting the money fast enough and that some have given up or lost homes as a result. Other federal programs aimed at helping people avoid foreclosure have received similar criticism.

“Weeks or days make a difference for people,” said Jamele Hage, executive director for the Wayne County Foreclosure Prevention Program.

Government officials told the Free Press that lack of large bank participation early on and the lead time needed to set up the program were problems.

“Everyone thinks if you get $500 million, you should have the money on the street in six months to a year. I’d love for that to have happened,” said Mary Townley, director of the Michigan State Housing Development Authority’s homeownership division.

The fund is the subject of two federal audits yet to be released.

The money was divided among 18 states and Washington, D.C., based on how hard they were hit by the housing crisis that began five years ago. California got the most, $1.97 billion, and gave 11% to help 4,357 people through the end of last year.

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