U.S. government approves state housing aid of 600 million dollars

Five more U.S. states will be eligible to draw 600 million dollars in federal aid to help their unemployed homeowners avoid foreclosure, the Treasury Department said on Wednesday.

The Obama administration has approved mortgage-assistance proposals submitted by North Carolina, Ohio, Oregon, Rhode Island and South Carolina, the department said in a statement. These states estimate that approximately 50,000 struggling homeowners will receive aid.

The aid could be used to help borrowers pay their mortgage for up to a year while they search for jobs. It could also offer incentives to loan servicers to cut monthly payments.

"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, " said Treasury Assistant Secretary for Financial Stability Herbert Allison.

"While the Obama administration has already taken critical action to strengthen the housing market and create jobs, we are committed to doing everything we can to immediately help those who are hurting the most during these tough times," Allison added.

U.S. unemployment rate stood at 9.5 percent in June, a level that President Barack Obama said was "unacceptably high." High unemployment means more people may run out of means to pay for their mortgages, which will result in a surge in foreclosure rates.

The foreclosure-prevention assistance came from the Hardest Hit Fund that the Obama administration established in February 2010. The administration in June approved the first five state plans under the fund, with a total assistance of 1.5 billion dollars allocated to Arizona, California, Florida, Michigan and Nevada, where home price declined more than 20 percent during the recession.

Source: Xinhua