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Thousands of underwater Florida homeowners left in limbo on Hardest Hit Fund relief

Still waiting to see whether you'll get a share of the Florida Hardest Hit Fund's $350 million in mortgage principal reductions?

Join the club.

In the four months since a flood of 25,000 underwater home­owners applied for the state-distributed relief, only 750 have had their loans paid down, state officials said.

An additional 17,000 homeowners who applied in September are left wondering when, or if, they'll qualify. About 150 applicants are close to approval; 7,400 applicants have been denied.

The program's payout limbo has frustrated homeowners hoping the money could help save their homes. About 10 percent of the money, or $40 million, is on its way to loan servicers to shave off approved applicants' mortgage debt.

But it has also marked another slowdown for the broader Hardest Hit program, which is funded by $1 billion in federal relief and has been long criticized for sluggish results. In a report Wednesday to Congress, the Special Inspector General for the Troubled Asset Relief Program said, "Florida is not getting a significant amount of these funds out the door to help homeowners."

Officials say that due diligence takes time, and that the state and about 80 contracted agencies, with names like Dream Home Organization Inc., are working quickly to verify if the applicants qualify.

"We didn't set a schedule. We didn't say, by this date we want all $350 million expended," said Cecka Rose Green, a spokeswoman for Florida Housing Finance Corp., the public agency overseeing the funds. The funding must be spent by the end of 2017.

The rules for program approval are strict: Homeowners must be current on their mortgage, owe more than 25 percent over a home's market value, and earn household wages less than 40 percent over the area's median income, which in Tampa Bay puts them at about $80,000.

But in Florida, where 29 percent of all homeowners with a mortgage are underwater, those limits barely made a dent in demand for help. The state saw a torrent of applicants, reaching its 25,000-application limit in a week.

More than 4,300 applications came from homeowners in Tampa Bay, though state officials could not say how many were approved, processed or denied. About 185,000 Tampa Bay homes are underwater, CoreLogic data show.

Since Hardest Hit was launched in the aftermath of the housing bust, Florida and 13 other states have shrunk their estimates of how many distressed homeowners they could help. In early 2011, Florida estimated its Hardest Hit relief could reach as many as 106,000 homeowners. By late last year, that estimate had slid to 39,000.

The program also came under fire after a Tampa Bay Times investigation last year found the select few that had been granted Hardest Hit help was littered with felons, tax evaders and borrowers with histories of bad debt. U.S. Sen. Bill Nelson called for a federal audit, and the U.S. Treasury Department said it would investigate.

Barbara Taylor, a 66-year-old former snowbird who bought a south St. Petersburg condo at the peak of the bubble, said she has been frustrated by the lack of communication on whether her up-to-date loan could qualify.

"I can understand getting an email that says, 'Give us 30 days and we'll update you,' Taylor said. "But when I (called my contractor and) got that response — 'Don't call us, we'll call you' — that burned me."

Contact Drew Harwell at (727) 893-8252 or dharwell@tampabay.com.

Thousands of underwater Florida homeowners left in limbo on Hardest Hit Fund relief 01/29/14 [Last modified: Wednesday, January 29, 2014 7:11pm]

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