Report: Federal Fund Meant To Help Struggling Homeowners Falls Flat

http://www.huffingtonpost.com/2012/04/12/tarp-bailout-money-report_n_1418420.html

A federal housing program funded with taxpayer money left over from the government's bailout of the banks and auto companies is failing to deliver on its promised relief to struggling homeowners.

The Hardest Hit Fund, a $7.6 billion initiative established by the federal government in February 2010 to help families in states most crippled by the collapsed housing market, has distributed just 3 percent of its money -- or $217.4 million -- to help homeowners, according to a report released Thursday by the Office of the Special Inspector General for the Troubled Asset Relief Fund, or SIGTARP.

The Hardest Hit Fund has helped just slightly more than 30,000 homeowners, or 7 percent of the roughly 480,000 homeowners targeted for assistance by the end of 2017 when the program expires, according to the report. The program is funded by TARP, the 2008 legislation that has provided a $600 billion to bail out various banks and other companies in the wake of the nation's financial crisis.

The 76-page report reads like the autopsy of a dead housing program, placing the blame for the program's paltry performance squarely on the Treasury Department, the government agency responsible for TARP and, in turn, the Hardest Hit program.

According to the report, Treasury initially dragged its heels in getting the largest mortgage servicers to participate in the initiative, instead relying on the individual states to broker arrangements with the servicers. Some of the states lacked the necessary clout to secure servicer participation, thus limiting the program's ability to reach needy homeowners, concluded the report.