HUD is returning to the US Treasury $568 million of $1B allocated to the Emergency Homeowners Loan Program because not enough people being approved for help. The program was designed to help unemployed and underemployed people avoid foreclosure.
You’d have to think there’s more to this story, right? But no, it’s true. You’d also have to wonder how can it be possible that not enough people were approved for help from this seemingly worthwhile program. The fund was set up to provide up to $50,000 in forgivable loans to help homeowners in 32 states and Puerto Rico.
Worse yet, only 11,832 of the nearly 100,000 applicants were conditionally approved for a program that was originally intended to help up to 30,000 homeowners. According to HUD, the assistance will average $35,000 to $45,000 per homeowner.
Numerous community groups said much of the blame goes to HUD that took too long to implement the program. HUD didn’t start taking applicantions until June of this year, nearly a year after the program was made possible by legislation reforming Wall Street. This was six months later than HUD had intended to begin the program and only a few months before the programs mandated time to commit the funds of September 30. HUD admitted that the program set up took longer than expected but also blamed the legislation for disqualify a higher number of applicants than expected. Some community programs have claimed that most of the blame lies with HUD because HUD actually added additionally eligibility requirements as well as failing to advertise the program in addition to the long set up time.
With so many homeowners and families struggling to make ends meet and keep their homes, how in a country as wonderful as our can something like this happen? While some would argue that the Wall Street reform was a mess anyway, the fact remains that nearly $600 million in much needed aid for many families went unused due to bureaucratic blunders. Is it any wonder that the confidence level of our government is at a record low?
