In an effort to help struggling homeowners, the Obama administration began the foreclosure prevention program. Funds allocated for the program were set at $50 billion during the first part of 2009. Only a very small portion of those funds have been spent.

As of the end of October, $600 million of the funds has been spent. The funds are part of the Troubled Asset Relief Program (TARP). Mortgage servicers are paid incentives to make loan modifications for struggling borrowers. The servicer who has received the most funds thus far is JPMorganChase, who has received $79 million.

As the foreclosure prevention program slows even more it's likely that the Tresury won't even come close to using the $50 billion allotted. Funds haven't been spent because not many loan modifications have been completed. Incentives are only paid on completed modifications, not trial ones. In addition payouts are made each year that the loan modification is in tack. If the borrower were to default then the incentive would not be paid. Approximately 21 percent of the modifications made a year ago have already defaulted - those incentive will not be paid. The TARP fund also pays incentives for other programs, like short sales that will help homeowners avoid foreclosure. 

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