The Treasury Department will invest an additional $2 billion from the Troubled Asset Relief Program into a federal fund that seeks to protect homeowners from foreclosure.
State housing agencies that participate in the Hardest Hit Fund will divvy up the money, which will come in two installments of $1 billion each, the Treasury said.
The allocations will be based on state population and how effectively housing finance agencies have used prior funding. They must have utilized at least half of existing funds to qualify for the additional money.
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Lax oversight by the Treasury Department has helped to prevent billions of dollars in aid from reaching struggling homeowners, according to a report released Tuesday by the Special Inspector General for the Troubled Asset Relief Program.
October 29 -
A report from the Special Inspector General for Tarp said Treasury didn't do enough to facilitate participation in the Hardest Hit Fund, which has distributed just 3% of the funds available to struggling borrowers in the two years since it was created.
April 12 -
A lack of communication allowed a number of banks to use funds from the small-business lending program to pay dividends or exit Tarp, Christy Romero wrote in a report issued Tuesday.
April 9
"Thanks to a bipartisan group of members of Congress who helped secure additional funding ... we will be able to provide significant resources to hard-hit states and target these critical resources towards programs that we know have helped Americans avoid foreclosure, and stabilized housing markets, including blight-elimination programs," Treasury Secretary Jacob Lew said in a news release.
The Hardest Hit Fund was created in 2010 to provide $7.6 billion in aid to homeowners in states most hurt by the housing downturn. About $4.5 billion had been apportioned as of Sept. 30, according to the Treasury release, which was issued Friday.
As part of Hardest Hit Fund program, the Treasury oversees homeowner-assistance programs administered by state housing finance agencies in 18 states and Washington, D.C.
The Treasury also announced it has extended the fund's deadline to Dec. 31, 2020. Previously, states had until 2017 to utilize their funds.
