State ends federal foreclosure aid with millions unspent

Article Courtesy of The Orlando Sentinel

By Mary Shanklin

Published February 4, 2018


Florida on Wednesday will close its three largest Hardest Hit federal housing-aid programs — years early — with $88 million left unspent.

State officials say they are pleased they helped tens of thousands of struggling Floridians by spending 92 percent of Florida’s $1.1 billion share of federal funds. Officials are closing three opportunities for Floridians — mortgage principal reduction, mortgage help for the unemployed and underemployed, and aid on delinquent home loans.

State officials said the program was a success, despite data showing that Florida was behind other states in helping financially underwater homeowners. In shutting down the programs, the state cited Florida’s drop-off in foreclosures and strong job growth.

“Although the Florida HHF [Hardest Hit Fund] programs were originally slated to conclude by December 2020, we were able to meet the needs of struggling homeowners ahead of schedule,” said Trey Price, executive director for Florida Housing Finance Corporation, the state’s housing arm.

Florida’s Hardest Hit program helped only about half the number of the approximately 100,000 Floridians who applied since it launched in 2010. The program has been troubled from the start, rolling out with crashed computers and an eight-month delay to get approved. Compared with 17 other states that were part of the program, Florida also had the lowest admission rate — even though Florida had one of the most severe home-price corrections in the nation, according to a 2015 federal report.

Orlando resident Candy Angell said she tried to go through the state's application channels years ago after being laid off from her position as an administrative assistant at Walt Disney World.

"They put me through the ringer," she said. "They were so rude, so ugly. I tried so many times. I got turned down so many times. It was just totally ridiculous."

The slow deployment of money from the program has drawn criticism. U.S. Rep. Darren Soto, D-Orlando, said the money approved during the Obama administration could have been deployed quickly to help speed up Florida’s recovery from the crash and save families from foreclosure.

“Unfortunately, Governor Scott and Republican legislators dragged their feet for years in getting the FHFC [Florida Housing Finance Corporation] to deploy significant funds and various assistance programs, undermining the effort and stifling its effectiveness,” Soto said. Though the state has moved toward recovery, it remains one of the few yet to rebound fully, according to data from the National Association of Realtors. Zillow recently estimated it would be another seven years for Orlando to return to home prices of 2007.

The state will keep several Hardest Hit spending programs open — mortgage help for the elderly and mortgage modifications. A down-payment assistance program will also remain open, although it is not aimed at Floridians who have lost their homes. The programs remaining open have drawn about a tenth of the applications as those closing, according to data from the most recent quarterly report by the U.S. Treasury Department.

Florida Housing Finance Corporation intends to fully spend the remaining $88 million on those three programs plus any remaining obligations on the closing programs, according to a spokeswoman.

For Floridians who have gotten through the application process and benefited from the state’s share of Hardest Hit Funds, the aid has been significant. About 15 percent of 42,661 Floridians who applied for principal-reduction assistance got help from the program, and the midpoint amount of aid was $45,889 per homeowner, according to a third-quarter report by the Treasury Department. Homeowners who were unemployed or underemployed got a median of $10,468 to assist with late mortgage payments.

“It’s criminal,” said Maitland resident Ami Colee, who tried unsuccessfully to apply for the funds. “I had all my ducks in a row but could not get through on the phone. I ended up standing in their lines, but there was no follow-up. It was a complete waste of time.”

She was able to save her condo from foreclosure but only by deferring payments on $30,000 of her Wells Fargo mortgage. The 62-year-old said she will be “working forever” but at least loves her job with a hospice organization.

Sen. Bill Nelson, D-Florida, has consistently called for investigations into Florida’s oversight of the federal spending program.