Some Arizona foreclosures could have been avoided had the state properly allocated funds given by the government to aid homeowners that were bludgeoned by the 2008 housing market crash. Arizona was the second most devastated state when the housing bubble burst five years ago.

When Congress approved the Troubled Asset Relief Program (TARP) in October 2008, $46 billion of the $475 billion (the Dodd-Frank reform reduced the amount from the originally-set amount of $700 billion) was allocated throughout the states to aid families struggling with their mortgages. Arizona received $268 million of that money. However, the state of Arizona had only allocated 6 percent of that money to struggling families over 18 months from mid-2011 to the end of 2012. Over half went to the state of Arizona to construct its state housing program, Save Our Home AZ.

Inspector general for TARP Christy Romero criticized the state’s lack of priority and organization, saying that Arizona “spent so much on setting up their office that they weren’t able to get the money to homeowners. That’s something that needs to be looked into.”

Other figures are just as lopsided in the state’s misallocation of aid funding. Arizona leads the country in the amount of rejected housing aid applications, rejecting a staggering 67 percent of all applications submitted by struggling homeowners searching for aid. On many accounts, the banks would foreclose on applicants’ homes while they were still waiting for a response from the state.

“It’s too late for those homeowners who should have gotten help and were unable to – they no longer own a home,” said Romero.

The state of Arizona blamed the sluggish response times on the banks’ supposed lack of hustle and cooperation. State officials said it was because the banks “would not work with them to modify mortgages.” No matter how one looks at it, while the banks and state government officials go back and forth trying to organize and act, homeowners are being forced out of their homes. Critics place blame on the Treasury for, during the initial drafting of TARP, putting banks on top priority over homeowners.

Arizona is the second-worst participating state in homeowner aid. It has approved only 22.6 percent of its aid applications, inching behind Florida as the worst participating state which approved only 20.5 percent.

Joshua de Leon is a writer and researcher with Ring of Fire.