Florida opts to not seek U.S. foreclosure-relief funds

Article Courtesy of The 

By Mary Shanklin

Published May 25, 2016

 

Already lagging behind the rest of the country in aiding struggling homeowners with federal foreclosure-relief funds, Florida missed out on a chance at $250 million in additional assistance.

More than a dozen of the nation's 18 hardest-hit states got word at the end of April that they won a new round of federal foreclosure-relief funds they had sought.

 

Florida was not among those states. It never applied, a Treasury spokesman said, even though it may have gotten $250 million. State officials did not say why they didn't seek the funds but pointed instead to a $78 million infusion of "Hardest Hit Funds," which the federal government gave to all qualified states.

Florida's missed opportunity has been criticized by U.S. Sen. Bill Nelson, D-Florida.

"The state's decision not to apply for this money is tragic for Florida homeowners who are fighting to keep their homes," he said last week.

The state group charged with distributing federal foreclosure-relief funds is Florida Housing Finance Corporation. Its board members are appointed by Gov. Rick Scott, a Republican who has been reticent to accept transportation and health-care funds from the Democratic-led presidential administration.

A spokeswoman for FHFC spoke only to the $78 million the state received without applying. States did not have to actively apply for those funds, according to U.S. Treasury.

A Bank Owned sign is seen in front of a foreclosed home on September 16, 2010 in Miami, Florida. RealtyTrac, an online marketplace for foreclosure properties, released its U.S. Foreclosure Market Report for August 2010, which shows foreclosure filings - default notices, scheduled auctions and bank repossessions - were reported on 338,836 properties in August, a 4 percent increase from the previous month.



"It will be used in tandem with our remaining funds to continue assisting families throughout the state," said Cecka Green, communications director for Florida Housing Finance Corporation.

One of the country's top states for foreclosures during the historic housing bust, Florida is slated to get more than $1 billion in federal Hardest Hit Funds for 10 years ending in 2020. Halfway through that spending timetable, it distributed 60 percent while the overall distribution rate by states was 70 percent.

The deadline to spend the money, originally next year, was recently extended until 2020.

Six years after the federal mortgage-relief funds began flowing into the state, about 120,000 Floridians have applied for at least one of the state's Hardest Hit programs, which can carve down monthly mortgage payments. But only one in five of those applicants had gotten any assistance by the end of last year.

Longtime Orlando resident Kathleen Martin, 66, said the problem goes beyond the state failing to request full funding. The problem, she said, is that the state has done a poor job reaching out to struggling homeowners such as herself. Saddled with medical bills, she and her husband are slated to lose their south Orlando home to foreclosure July 15.

"I've never heard of this program," said Martin, a former AT&T employee. "We got ripped off paying $4,000 to two sets of lawyers. You work all your life and this happens."

The Martins bought their home more than 20 years ago but piled up additional mortgage debt to help pay for a relative's medical costs and, later, burial expenses.

Since the federal government announced the Hardest Hit program six years ago, Florida was late to offer much-needed principal-reduction programs that were being offered by other states. It was slammed with so many applicants that its computers crashed and it shut down the application process a week after launching it in 2013.

A special inspector general found last year that, of the 18 states awarded federal Hardest Hit Funds to help homeowners, Florida has:

  • The lowest rate of admitting homeowners into the program.

  • One of the highest rates of homeowners withdrawing applications.

  • Consistently denied homeowners at higher rates than the national average.

The Hardest Hit funds fall under the federal Troubled Asset Relief Program. The inspector policing TARP funds reported that the U.S. Treasury did not make Florida accountable by working together to set benchmarks. Florida's performance has suffered, with about 40 percent of applicants dropping out or being eliminated from the funding process far greater than the average rate of 24 percent for all Hardest Hit states, the inspector reported.

After an earlier audit by the inspector general, Florida eased its requirements to qualify for funds, according to the Special Inspector General for TARP.

And in trying to reach a broader audience, Florida has also expanded its list of Hardest Hit spending programs in recent years. Programs now include mortgage modifications, unemployment mortgage payments, principal reduction, reverse mortgage aid, and down payment assistance. The state also established a toll-free number for residents to call for assistance: 1-877-863-5244. They can also go to www.flhardesthithelp.org


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