WASHINGTON — Three and a half years after Congress allocated $7.6 billion to help struggling homeowners from defaulting on their mortgages, states have been slow to spend that money, leaving billions of dollars in federal coffers as the housing market recovers.
A new report from the special inspector general overseeing funds appropriated by the Troubled Assets Relief Program (TARP) shows that 18 states and the District of Columbia, which were given access to the money, have spent just $1.7 billion since the bill passed Congress in 2010. In the meantime, those states have dramatically revised downward the number of homeowners they say they can help.
The report sparked a bureaucratic tussle between the inspector general’s office, which said the Treasury Department hasn’t followed its earlier recommendations, and Treasury, which said it is working with states to spend the money wisely and that the spigot has opened in the past year. Full story for BostonGlobe.com subscribers.