This July, Congress authorized $4 billion for a Neighborhood Stabilization Program to help communities struggling with high foreclosure rates. The Department of Housing and Urban Development is allocating the money, using a formula based on population, foreclosures and the concentration of subprime mortgages. More than 300 cities, counties and states have received monies directly from the government.
But as the Wall Street Journal says, the federal stabilization program is barely up and running, and already, many states and localities are frustrated by the small sums
involved and how HUD is
allocating the grants. The problems are an indication of how federal
efforts to halt the foreclosure crisis have proven inadequate to the
task.
For instance, Florida has half as many homes in foreclosure as does California, but will receive more money from HUD. Some counties with foreclosure rates over 10% are receiving no direct funds from the feds, and instead have to petition their state for a portion of its allotment.