A $1 billion federal program designed to help people avoid foreclosure will fail to meet its goal of helping 30,000 homeowners, the government admits.
The Emergency Homeowners' Loan Program has until Sept. 30 to commit the $1 billion to homeowners in 32 states and Puerto Rico, and if it fails, uncommitted funds will go back to the U.S. Treasury, according to USA Today.
Housing and Urban Development Department spokesman Brian Sullivan says the government and local housing groups are "working feverishly" to get applicants through the pipeline in time, but "we now believe we will not meet that ambitious goal," according to the newspaper.
The problem is that many people looking for the help were not eligible or didn't fill out their paperwork correctly, a far cry for original predictions that demand would be so great that a lottery would be needed to award aid.
Some say the program was poorly managed.
"They kept delaying the start date" from late last year to mid-June, when they started taking applications, says Lew Finfer of the Massachusetts Communities Action Network, USA Today adds.
That left "inadequate time" for people to apply.
Foreclosures, meanwhile, are on the rise.
Foreclosure filings rose in August, according to RealtyTrac, a marketer of foreclosed properties.
Filings were up 7 percent compared to July although they were down 33 percent than they were a year ago.
An increase in default notices may signal that lenders are starting to finally push through delayed foreclosure paperwork, says RealtyTrac CEO James Saccacio.
"It also foreshadows more bank repossessions in the coming months as these new foreclosures make their way through the process," Saccacio says, according to CNNMoney.
© 2022 Newsmax Finance. All rights reserved.