Five More States Picked For Foreclosure Prevention Funding

The Obama administration is funding foreclosure prevention programs in five more states that are suffering from high rates of unemployment and home foreclosures. The five states -- North Carolina, Ohio, Oregon, Rhode Island and South Carolina --will share in $600 million that will be funneled though state housing finance agencies. To gain access to the "Hardest Hit Fund," the housing agencies will have to submit "innovative" plans to the Treasury Department for assisting unemployed homeowners and providing incentives for servicers/investors to modify loans and reduce principal. In the first round, California, Arizona, Florida, Michigan and Nevada were selected as the hardest hit states. Housing finance agencies in those states are in line to share $1.5 billion in funds when Treasury approves their foreclosure prevention plans. "We want to test models that potentially could be used in other states," HUD secretary Shaun Donovan recently told a Senate committee.