Treasury Dept. approves plans to provide $1.5B in housing aid to Calif., Fla., 3 other states
By Alan Zibel, APTuesday, June 22, 2010
Calif., Fla., other states to get more housing aid
WASHINGTON — The Obama administration has approved five state-designed plans to help homeowners as part of a $1.5 billion effort to assist areas slammed by the housing bust.
Treasury Department officials, who spoke on condition of anonymity because the decisions had not yet been made public, said plans for Arizona, California, Florida, Michigan and Nevada had received approval.
The states estimate that the plans are projected to help up to 93,000 homeowners. That’s a small part of the administration’s main existing $75 billion mortgage assistance program, which is widely viewed as a disappointment.
President Barack Obama unveiled the state assistance effort in February. Since then, state agencies have designed their own approaches, largely focused on borrowers who owe more on their properties than their homes are worth or those who have lost their jobs.
Officials say the state efforts could be used to make changes to the administration’s broader mortgage assistance plan. The state agencies are planning to work with local housing groups to put the plans in place.
According to the proposals from the states, the largest recipient of the funding is California, which will get nearly $700 million to assist about 46,000 borrowers. Florida is getting the second-largest pot of money, $418 million. That will help about 12,500 borrowers.
Michigan will receive about $155 million to assist 17,000 borrowers, while Arizona will receive $125 million for 12,000 borrowers. Nevada will receive $103 million for about 5,000 homeowners.
Besides these states, the Obama administration is providing an additional $600 million in financial support to help homeowners in states with high rates of unemployment.
Those states — Ohio, North Carolina, South Carolina, Oregon and Rhode Island — have submitted plans to the Treasury Department. They are being reviewed now, with approvals expected in August.
The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis, which have met with limited success.
More than a third of the 1.2 million borrowers who have enrolled in the Obama administration’s main mortgage modification program have dropped out, officials said this week. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.
AP Business Writer Martin Crutsinger contributed to this report from Washington.
(This version CORRECTS to say “up to 93,000″ instead of “at least 93,000″ and also corrects the number of borrowers affected in each state.)
