It will come as news to many homeowners facing the loss of their homes that Florida has a huge fund of money available to help those facing foreclosure, and a deadline of Dec. 31, 2017 by which to spend it. And at the rate the state is going, many homeowners in trouble who might be eligible for assistance will be left out on the street when the program shuts down.
The money comes from the unfairly maligned federal TARP program, which pumped $700 billion into banks and housing markets to keep the economy from collapsing. A small part of that consisted of $7.8 billion in an assistance project called the Hardest Hit Fund.
The fund is designed to help homeowners in 18 states, including Florida, and the District of Columbia stay in their homes when threatened with foreclosure. Florida’s share comes to just over $1 billion. Essentially, the money is meant to go to unemployed homeowners or those who have jobs but don’t earn enough to pay their mortgage — although the terms of eligibility are belatedly being expanded.
Of the amount available to Florida, however, relatively little has been spent, although Congress approved it more than three years ago. According to the latest report by the U.S. Treasury Department, only 10 percent of the funds had been used by the Florida Housing Finance Corporation, the state agency running the program, as of Dec. 31, while other states had disbursed much more. Michigan, for example, had used 75 percent of its allocation.
In a letter to the TARP inspector general, U.S. Sen. Bill Nelson said distribution of the money “is being delayed to the detriment of needy homeowners” and asked for an investigation. Surely, considering that Florida has racked up the nation’s highest foreclosure rate for the last few months, such an investigation is warranted, the sooner the better.
Quoting figures from an investigative report by The Tampa Bay Times, Sen. Nelson said only 18 percent of Floridians who applied for the Hardest Hit mortgage assistance program were approved — the lowest percentage of any of the states in the national program.
According to figures provided by the state agency, close to 2,000 borrowers in South Florida have received funds from the program to stay in their homes. That includes 1,125 in Broward County, 767 in Miami-Dade and seven in Monroe. The statewide total is 7,314. But how many more could be eligible and either don’t know it or were turned down improperly?
To make matters worse, The Tampa Bay Times report found that even though twice as many applicants had been turned down as the number granted relief, dozens of homeowners with histories of financial mismanagement had received aid.
There are signs that the Florida Housing Finance Corp. is trying to do better. It has doubled the period during which eligible homeowners can receive help, from six to 12 months, and increased the amount that can be used to make up late payments. Furthermore, it is awaiting Treasury Department approval on an expansion that would reduce the principal owed by the homeowners.
These belated moves are a step forward, but Floridians need to know why their state is so far behind others in the rate of assistance and why it has been so slow to provide help.
While the real-estate market is improving, 9.9 percent of the mortgaged homes in Florida are in some stage of foreclosure, the highest inventory of any state. The need for help is urgent, and the state has a lot of catching up to do.