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Florida officials used Hardest Hit mortgage relief for luxury hotel stays

Thousands of Tampa Bay homes went into foreclosure, some of them because state housing officials were slow in distributing Hardest Hit mortage relief funds. This notice was on a St. Petersburg house. [SUSAN TAYLOR MARTIN | Times (2017)]
Thousands of Tampa Bay homes went into foreclosure, some of them because state housing officials were slow in distributing Hardest Hit mortage relief funds. This notice was on a St. Petersburg house. [SUSAN TAYLOR MARTIN | Times (2017)]
Published Mar. 7, 2019

Click here to read this story in Spanish.

Florida officials used a federal fund designed to help struggling homeowners as a "deep pocket'' for travel and stays in high-end hotels, a new report says.

Between 2011 and 2016, officials of the Florida Housing Finance Corp. charged the Hardest Hit Fund all or part of the cost of attending conferences in San Diego, Orlando, Miami, Boston and Nashville, Tenn., even though less than two hours out of four days of meetings in each instance appeared to be related to the Hardest Hit mortgage relief program.

In other instances, housing officials used Hardest Hit money to pay for routine agency meetings at four-star hotels including the Vinoy Renaissance St. Petersburg Resort & Golf Club and the Hyatt Regency in Orlando, according to a report released today by the Special Inspector General for the Troubled Asset Relief Program.

Many of the expenditures, which totaled more than $40,000 and violated federal regulations, came at a time when Florida had one of the highest rates of denying Hardest Hit help to homeowners who couldn't pay their mortgages.

"Any dollar wasted or spent inappropriately is one less dollar for homeowners,'' the report said.

The U.S. Treasury Department created the $9.6 billion Hardest Hit Fund in 2010 to help Florida and 17 other states reeling from the foreclosure crisis. Florida Housing Finance, in charge of the state's $1.1 billion share, repeatedly came under fire for its slowness in disbursing the money to desperate homeowners even as agency employees received large bonuses and enjoyed taxpayer-funded meals and hotel stays.

Following a Tampa Bay Times investigation, Florida Housing's executive director, Stephen Auger, was forced to resign in 2016 when an audit showed the agency had hosted a $52,000 lobster-and-filet-mignon dinner to honor lenders that dealt with low-income borrowers.

In the new 85-page report, federal special inspector general Christy Goldsmith Romero said she found "too many times'' that officials in Florida and other states used Hardest Hit money for their own enjoyment. "Flying around the country, staying at luxury hotels, attending conferences beachside and at other vacation destinations are not 'must have' costs for a local foreclosure prevention program,'' Romero said.

Florida, in particular, "had a culture of inappropriate spending'' of Hardest Hit dollars, the report said:

• Florida Housing charged the Hardest Hit Fund nearly $18,000 — the most of any state — to send employees to an annual national housing conference that had little or nothing do with the fund. For one conference, three agency officials each charged the fund for an extra day's per diem and an extra night's stay at the Marriott New Orleans even though "there was no documentation to show how the participation of these individuals for this extra time was necessary … The Florida agency was extravagant.''

• Florida Housing's communications specialist spent $959 in Hardest Hit money to travel to Miami for three nights in 2016 although "there was no documentation of the event or why the participation of this individual was necessary for the Hardest Hit Fund.''

• Two officials of Florida Housing billed nearly $1,000 for stays in the Vinoy, Tampa's Epicurean Hotel and Orlando's Castle Hotel to conduct "Realtor training.'' The agency provided no documentation "of what the training was about or whether it related to (the Hardest Hit Fund)."

The report says Florida should reimburse the Treasury Department $23,088 for some of the travel and conference costs. Florida Housing Finance, which ended its Hardest Hit program last year, said it would have no comment until it had read the entire report.

The report also found disallowed uses of Hardest Hit funds in other states. In North Carolina, for instance, $2,500 went for a speech on " Motivation by Chocolate'' and $3,000 was spent on an evening reception with gourmet desserts like "Strawberry Shortcake Martinis, Cake Bites and Mousse Shooters of the Season.''

In all, states charged the Hardest Hit Fund for more than $400,000 in prohibited conference and travel expenses although the report said the amount could be higher "given the lack of transparency in state agency reporting.''

Contact Susan Taylor Martin at smartin@tampabay.com or (727) 893-8642. Follow @susanskate.

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