Treasury Adds $3 Billion to Hardest Hit Fund to Help Prevent Foreclosures
The U.S. Treasury Department has added $2 billion to double the size of its Hardest Hit Fund in an effort to help unemployed homeowners avoid foreclosure.
According to a story in the New York Times, the Department of Housing and Urban Development will be drawing on $1 billion provided to it by the new financial overhaul legislation to work with local aid groups to provide interest-free bridge loans to distressed borrowers.
The Obama administration, acknowledging that the foreclosure crisis is far from over, said the new funds are needed to supplement existing programs that are already helping homeowners avoid foreclosure.
Government officials noted that while the housing market usually helps lead the U.S. out of a recession, it is holding the recovery back this time. While interest rates are at historic lows, unemployment remains high and unemployed homeowners are being squeezed out of their homes by falling values and an inability to keep up with mortgage debt.
Florida will receive an additional $235 million in federal aid and was one of the first states to benefit from the Hardest Hit Fund when it distributed over $1.5 billion to the five states hit hardest by the foreclosure crisis.
Greg Gilbert
Keith Maynard
