While he’s in the state with the highest foreclosure rate in the nation Friday, President Obama plans to announce a proposal to take $1.5 billion in funds originally designed to assist ailing banks and instead use it to help the hardest hit states stem the housing crisis, according to senior administration officials.
The proposal to redistribute money from the Troubled Asset Relief Program will benefit the five states with the steepest declines in home prices: Nevada, California, Florida, Arizona and Michigan.
$1.5 billion would be a drop in the bucket. Also, it's unclear what this money would do that his failed $75 billion loan modification plan would do. Most importantly, TARP was not supposed to be used for this purpose.
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