The foreclosure crisis hit Floridians particularly hard. And yet from its inception, Florida's Hardest Hit Fund failed to prevent foreclosures for too many homeowners despite having nearly $1 billion to provide relief. A report released last week illustrates the depth of Florida's deficiencies. Florida consistently underperformed when compared with other states that received federal funds to help homeowners. The state made it too hard to qualify for help, had frustratingly long wait times for assistance and failed to be transparent about why homeowners were turned down. At the height of the real estate crisis, the state sat on money that could have helped needy Floridians remain in their homes. There is no excuse for such irresponsible stewardship of federal aid.
The Tampa Bay Times' Susan Taylor Martin reported on Tuesday that a federal investigation of Florida's HHF revealed that the state had the lowest homeowner admission rate among the agencies tasked by the U.S. Treasury Department with providing mortgage assistance in 18 states and the District of Columbia. Florida also had one of the highest rates of application withdrawals and a denial rate of 27 to 45 percent, above the national average. Five years into the program, only 22,400 people have been helped, a paltry number given the magnitude of the real estate crisis in Florida.
The report was issued by the special inspector general for the Troubled Asset Relief Program, who investigated Florida's HHF program at the behest of Sen. Bill Nelson, D-Fla. The senator called for federal scrutiny in 2013 after a Times' investigation revealed that Florida denied seemingly deserving homeowners yet provided aid to sex offenders, tax cheats and other felons. The people who fell on hard times that HHF could have helped are legion. They are young and old, blue-collar workers and professionals, first-time homeowners and seasoned buyers.
Though strangers, Tampa's Myna Burnett and Johnnie Hunt had similarly frustrating experiences with HHF. Both appealed for help after losing their job, and both were offered assistance if they could come up with the balance of missed payments to their lenders. Hunt, a 54-year-old tile contractor, was granted $25,000 but couldn't come up with the remaining $27,000 in back payments for his home near Raymond James Stadium. Burnett, a 50-year-old paralegal, also didn't have the money to cover the balance of three years of missed payments and fees on her Seminole Heights home. In the end, neither homeowner got anything. Now gainfully employed, Burnett recently entered into a loan modification program with her new lender. Hunt, who also is working again, seems headed for foreclosure. Last week, he received notice of a sale date for his home.
Officials at the Florida Housing Finance Corp., which runs the state's HHF program, concede that they were slow to roll out some programs such as principal reduction efforts. But like Treasury officials, they largely discount the report, saying it dredges up old data that discount gains made in the last two years. Based on raw data, Florida's HHF has extended aid to 24,119 people, disbursed $542 million — second only to California — and is operating six aid programs with plans for expansion. That is progress, but it's not enough. And it's too late for many of those who should have been helped but weren't.
Investigators made 20 recommendations in the report, and officials should consider implementing many of them, even if it requires actions outside of HHF's original design. Revisiting homeowner qualifications and eliminating unnecessary obstacles is a good place to start. Federal officials also should set reasonable goals for homeowner admission rates, track and evaluate the reasons why homeowners are denied and be transparent about the decisions.
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Explore all your optionsFederal inattention and abject stubbornness at the state level are to blame for Florida's bungling of mortgage aid. There is no need for Florida to continue to operate as if it has run a model program when the data clearly show the opposite is true. The clock is ticking on HHF, which ends in 2017. With the time it has left, Florida officials have a responsibility to help as many homeowners as possible. Federal officials should make sure they do.