Some of the states hit hardest by the foreclosure crisis, including Florida, aren't spending millions of dollars that the federal government has set aside to help struggling homeowners, a new report shows.
Of $7.6 billion the federal government has provided in the "Hardest Hit Fund" to help homeowners, states have disbursed only $3 billion, according to a report from the Congressional Research Service, a nonpartisan service that provides information to Congress.
The Hardest Hit Fund is one of several initiatives the federal government created after the recession to help families keep their homes. Eighteen states and the District of Columbia have 66 programs that use money from the Hardest Hit Fund, which is allocated to each state depending on various factors, including the impact of the housing crisis.
The CRS found that states have disbursed widely varying percentages of their Hardest Hit money, from 21 percent in Alabama to 84 percent in Rhode Island. Some of the states hit hardest have distributed the lowest percentages, including Florida (26 percent), Michigan (29 percent), Arizona (34 percent) and California (36 percent). As of October, Florida still had the nation's highest foreclosure rate.
States are required to submit plans to the Treasury, which administers the program, explaining how they'd use the money.
Critics say the Treasury is at least partly to blame for states' low payout rates. In a separate report in late October, the Office of the Special Inspector General criticized the Treasury for failing to specify how many homeowners states should help.