Homeowners frustrated by delays in state mortgage-aid program

Article Courtesy of The Orlando Sentinel

By Mary Shanklin

Published May 14, 2014


More than 10,000 Floridians who applied to the state for help with their mortgages seven months ago are still waiting to hear whether they will get any assistance, state records show.

So far, the state's housing agency has granted about $90 million in principal reductions for about 2,100 Florida homeowners an average of about $42,000 each. The program is aimed at homeowners who owe more than their homes are worth but have stayed current on their payments.

More than a third of the 25,000 applicants, however, are still waiting for a decision after applying for the aid in September. Growing impatient, applicants have described the process as slow, disorganized and understaffed.

"The time frame of this thing has been ridiculous," said Winter Park resident Kevin Callanan. "It's been seven months. I was thinking 90 days would be a sufficient amount of time. I don't know what they're doing every day."

Florida Housing Finance Corp. spokeswoman Cecka Green said that local housing agencies contracted by the state have worked diligently to process applications based on when they were filed. The state didn't announce any timetable when the program started, and Green could not say when the agencies will finish.

In September, the Florida Housing Finance Corp. accepted 25,000 online applications on a first-come, first-served basis for the program, which could reduce the principal of underwater mortgages by as much as $50,000 for qualified homeowners. It's one of nine programs the state has introduced to distribute about $1 billion in federal "Hardest Hit" mortgage aid by the end of 2017.

The state planned to spend $350 million on the principal-reduction program by cutting an average of $35,000 in principal for 10,000 Florida homeowners. So far, the average payouts have been higher because people have qualified for more money than expected. But the approval rate remains about one out of every 10 applicants.

Fort Myers resident Henry Graefen said Friday that he waited five months before learning in March that his mortgage principal would be reduced by $37,374. The wait, he said, was worthwhile because it reduced his monthly payment by $180. During the application process, he had to resubmit documents because the first ones he turned had become dated by the delay.

"When you're dealing with the government, everything takes a long time, and every time you think you have things straightened out, there are one or two things you have to change," he said. "That's life."

Some applicants have complained that the financial information they submitted was lost or that they wasted time and money on the application only to be denied for reasons that should have been immediately evident to counselors at local housing agencies.

Sanford resident Janice Peek said she applied Sept. 25 the day the state started taking online applications. The owner of an online retail business said she included in her application that she had previously received aid through another Hardest Hit program. Ultimately, that disqualified her.

"They could have told me that from the start," said Peek, adding that she spent about 20 hours of her time and $200 on accounting services and postage. "They don't have enough people and they don't have them trained. I wasted seven months trying to comply with everything asked of me."

Altamonte Springs resident Stacy Kirk said she mailed a certified package that detailed her financial information, bank accounts and Social Security numbers only to have the housing counseling agency lose it.

"I just didn't feel good about it," she said. "It was handled unprofessionally. I just thought they were totally unorganized."

She said she lost her trust in the process and never resubmitted the information.

Green, of the Florida Housing Finance Corp. acknowledged that paperwork sometimes gets misplaced but said homeowners who are concerned about the loss of their financial information or about the process in general can call 877-863-5244.