A $1 billion federal foreclosure aid program ended with $568 million unspent due to a restrictive application process and poor advertising, a result that some called “sad and shameful.”
Federal officials announced on Thursday that the program, which provided forgivable and interest-free loans of up to $50,000 to help the unemployed and medically ill avoid foreclosure, will use just $432 billion, reports USA Today.
The effort was aimed at helping those who lost at least 15 percent of their income due to the economy or medical conditions, and were at least 90 days delinquent on their mortgages, facing foreclosure and could show that they could resume their payments if they found new employment.
In the end, the restrictive guidelines for the program enabled only a tenth of applicants to even qualify for the grants and interest-free loans.
Government expectations were that the program could help up to 30,000 people, but out of 100,000 applicants for the program, only 11,832 were conditionally approved. Assistance will average about $35,000 to $45,000 per homeowner.
The original rollout was a “quagmire of delays and requirements,” reports CNN. The launch was postponed for months - and then only gave people six weeks to apply when it finally launched in late June. The deadline was pushed back eventually to mid-September.
Lewis Finfer, executive director of the Massachusetts Communities Action Network, worked to pass legislation to make the program possible - he told USA Today that the failure to process enough applicants in time was “sad and shameful.”
The news of the mortgage program’s shortcomings on Thursday came the same day as the Census Bureau announced that the home ownership rate in the United States had dropped over the last decade by the greatest amount since the Great Depression.
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