A billion-dollar program designed to keep 40,000 Florida homeowners out of foreclosure has helped only 3,400, according to a federal audit released Thursday.
The audit quotes an unnamed Florida official as blaming the abysmal results on lack of interest from banks and other lenders. "There is no stick with the carrot to force servicers to participate," the official said in the audit.
Another Florida official said it would have been helpful if the U.S. Treasury had been more aggressive in getting large lenders to participate.
The state's Hardest Hit Fund was supposed to help financially distressed homeowners who were not more than 180 days delinquent in their mortgage payments.
Assistance comes in two ways:
One option provides six months of mortgage assistance, up to $12,000, to unemployed or underemployed homeowners. A revision from the pilot program requires homeowners to pay 25 percent of their monthly income or $70 toward the house payment.
A second option provides up to $6,000 to bring a delinquent mortgage current if the homeowner has returned to work or is recovering from underemployment.
Of the nearly 36,500 applications received in Florida through January, more than 3,800 came from Hillsborough, Hernando, Pinellas and Polk counties.
In 2010, the U.S. Treasury selected Florida along with Nevada, California, Michigan and Arizona as Hardest Hit states because of high unemployment and diving housing prices.
The federal government ultimately distributed $7.6 billion to 18 states and the District of Columbia. As of December, housing officials have spent only $217.4 million — 3 percent of the $7.6 billion — to help 30,640 homeowners, the audit states.
The Office of the Special Inspector General for the Troubled Asset Relief Program conducted the audit.
It found that the "Treasury failed to recognize the lack of bargaining power that states had for recruiting'' banks and other lenders.
Mark Puente can be reached at [email protected] or (727) 893-8459. Follow him on Twitter at twitter.com/markpuente.