Government OKs $600M in housing aid for N.C., four other states
Posted August 4, 2010 8:51 a.m. EDT
Updated August 4, 2010 1:34 p.m. EDT
WASHINGTON — The Obama administration plans to send $600 million to help unemployed homeowners avoid foreclosure in five states.
The Treasury Department said Wednesday that mortgage-assistance proposals submitted by North Carolina, Ohio, Oregon, Rhode Island and South Carolina received approval. The states estimate their efforts could help up to 50,000 homeowners.
The administration is directing $2.1 billion from its existing $75 billion mortgage assistance program to a total of 10 states. Each state designed its own plan. Treasury approved money in June for Arizona, California, Florida, Michigan and Nevada.
The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis but has made only a small dent in the problem. More than 40 percent, or about 530,000 homeowners, have fallen out of the administration’s main effort to assist those facing foreclosure. That program provides lenders with incentives to reduce mortgage payments. So far, it has provided permanent help to about 390,000 homeowners, or 30 percent of the 1.3 million who have enrolled since March 2009.
In the latest package of aid, Ohio will receive $172 million — the largest amount of money. That could aid around 15,000 homeowners by helping borrowers pay their mortgage for up to a year while they search for jobs. It could also provide incentives for mortgage companies to reduce borrowers’ mortgage balances.
North Carolina is receiving $159 million, and South Carolina is in line for $138 million. Oregon is receiving $88 million and Rhode Island is receiving $43 million.
“These states have designed targeted programs with the potential to make a real difference in the lives of homeowners struggling to make their mortgage payments because of unemployment,” Herbert Allison, an assistant treasury secretary, said in a statement.
"A good home is a foundation of a stable family, and so these funds are critical to getting these families back on their feet," North Carolina Gov. Beverly Perdue said in a statement. "Although the new programs will not be available until December, other foreclosure prevention resources are available now. I urge families who are currently behind in their mortgage payments to not wait, but contact a local HUD-approved housing counselor.”
More aid to the unemployed is coming. The sweeping financial reform bill passed signed into law by President Barack Obama last month provides an additional $3 billion to help jobless homeowners pay their mortgages.
Of that money, $2 billion is coming from Treasury’s foreclosure-prevention effort. The rest is to be managed by the Department of Housing and Urban Development.