Housing Finance Agencies administrating the “Hardest Hit Fund” in 18 states have helped more than 45,000 struggling homeowners facing possible foreclosure, and another 38,000 are under review for assistance through March 2012, said a U.S. Treasury official today.
But Mary Miller, Treasury’s Under Secretary for Domestic Finance, conceded that the state agencies faced a challenging task because they had to retool and develop an infrastructure to “reach at-risk homeowners and operate their programs.”
Miller did not mention a very critical report on the Hardest Hit Fund’s progress released this month by the official watchdog overseeing its funding.
Only about 3 percent of the funds $7.6 billion has been used to help borrowers thus far, said Christy Romero, Special Inspector General for the Troubled Asset Relief Program (TARP), in a report released April 12. TARP is the primary U.S. bailout program, part of which has been diverted to fund foreclosure prevention programs.
As of February 2012, two years after the launch of the fund, only $828.6 million has been drawn to assist borrowers – with most of the money “identified for administrative expenses and cash on hand,” according to Romero’s report.
Romero’s report said Treasury could have improved its planning and execution of HHF and increased participation by all stakeholders in the program, including mortgage servicers and the state Housing Finance Agencies.
In a prepared speech today at the National Council of State Housing Agencies, the Treasury’s Miller said the pace of spending on Hardest Hit Fund programs has “picked up momentum in the first quarter of 2012, and we look forward to the full deployment of this assistance to homeowners.”
She did not specify when “full deployment” would be in effect.
For many state agencies, retooling infrastructure “meant hiring new staff and bringing on key partners, such as housing counseling organizations, to help them market their programs and provide intake and eligibility screening services,” Miller said.
Beyond the current approach, Treasury sees the Hardest Hit Fund’s value as an investment in infrastructure and the “longer-term capacity to provide foreclosure relief,” Miller said.
“In addition to selecting and training networks of housing counselors, state HFAs are using these funds to create homeowner portals to apply for assistance and hire underwriters and other staff to review and approve applications,” she said.