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Inspector General Hits Obama Admin’s 'Hardest Hit' Housing Program

A $7.6 billion Obama administration program that targets areas especially suffering from the housing crisis is falling short, with the government spending only about 3% of money set aside for “underwater” mortgage borrowers and other problems, a watchdog report said.

Envisioned as an effort to help local communities target aid to address problems in their areas, the program had only spent $217.4 million as of the end of last year, according to the report. Only about 30,600 homeowners have been helped so far, out of an estimated potential for 487,000.

The inspector general, Christy Romero, said in an interview that she was worried that the Hardest Hit program will also fall flat. “There’s a great concern that, without some drastic change, that money is not going to go out and help homeowners,” Ms. Romero said.

Ms. Romero’s report is the first comprehensive examination of a newer piece of the administration’s foreclosure-prevention efforts, which have been widely criticized for not making a big dent in the country’s housing problems.

Under the Hardest Hit program, states, like California, Nevada and Arizona focused on aiding “underwater” homeowners, or those who owe more on their properties are worth.

Only $10.4 million, or 5% of the money spent so far, has gone to debt forgiveness, the report found.

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