SIGTARP warns of misuse of HHF blight elimination funds

This story appeared in Bank Digest. In an Alert Letter written to Treasury Secretary Jacob Lew, Christy Goldsmith Romero, Special Inspector General for the Troubled Asset Relief Program, warned that efforts to reduce blight under TARP's Housing Finance Agency Innovation Fund for the Hardest Hit Housing Markets (the Hardest Hit Fund or HHF) "could be strategically misused to select lived-in residences for the purpose of HHF-reimbursed demolition."

Romero said SIGTARP was preparing a report on risks that could undermine the Hardest Hit Fund's blight elimination efforts, but "given the fast pace at which HHF demolitions are taking place in certain cities," she believed she had to bring the matter to Lew's attention immediately. Romero pointed out in the letter that TARP's Hardest Hit Fund is intended to help people stay in their homes by preventing foreclosures, which is different from the purposes of other federally funded blight elimination programs. She said, "A program designed to keep people in their homes should not be used to reimburse acquisition or demolition that uproot other people from their homes."