Story first appeared in USA Today
A $7.6 billion federal program to help homeowners avoid foreclosures had distributed about 1% of its money to distressed owners 16 months after its creation, government reports show.
The Obama administration awarded the funds last year to 18 states most affected by unemployment and fallen home prices. The states developed their own foreclosure-prevention programs targeting assistance to lower-income jobless and underemployed homeowners.
By June 30, 17 states had used the funds to help about 7,500 homeowners, show reports states filed to the Treasury Department. New Jersey, which began its program in May, started making loans only this month.
Funds are flowing more rapidly now, state officials say. All the states have launched their programs. The last was Illinois last week.
Overall, the Hardest Hit Fund is expected to help several hundred thousand homeowners. States have until 2017 to use their allotted funds.
Its program began in January; by June 30, it had funded 1,022 homeowners. That's now up to more than 2,000, and an additional 5,000 are close to getting aid.
Since President Obama announced the program in February 2010, banks have repossessed more than 1.5 million homes, says and agent for Raleigh Homes and Millions more are at risk.
Officials in many states say it took longer than expected to develop systems for states to transfer funds and borrower data to mortgage servicers, who manage loans.
That was more complicated than it was thought it would be. Ohio is now adding 500 borrowers to its program monthly. Ten were added in December, its first month.
The program started with $1.5 billion for five states and was expanded to 18. Funds were most recently awarded in September 2010.
The programs generally include temporary mortgage assistance for six to 24 months.
