Government OKs $600M in Housing Aid for 5 States

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The Obama administration plans to send $600 million to help unemployed homeowners avoid foreclosure in five states.

The Treasury Department said Wednesday that mortgage-assistance proposals submitted by North Carolina, Ohio, Oregon, Rhode Island and South Carolina received approval. The states estimate their efforts could help up to 50,000 homeowners.

The administration is directing $2.1 billion from its existing $75 billion mortgage assistance program to a total of 10 states. Each state designed its own plan. Treasury approved money in June for Arizona, California, Florida, Michigan and Nevada.

In the latest package of aid, Ohio will receive $172 million - the largest amount of money. That could aid around 15,000 homeowners by helping borrowers pay their mortgage for up to a year while they search for jobs. It could also provide incentives for mortgage companies to reduce borrowers' mortgage balances.

North Carolina is receiving $159 million, and South Carolina is in line for $138 million. Oregon is receiving $88 million and Rhode Island is receiving $43 million.

"These states have designed targeted programs with the potential to make a real difference in the lives of homeowners struggling to make their mortgage payments because of unemployment," Herbert Allison, an assistant treasury secretary, said in a statement.

The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis, but has made only a small dent in the problem. The administration's main effort, which provides lenders with incentives to reduce mortgage payments, has enrolled about 390,000 homeowners. About 530,000 have fallen out of the program.
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