Advertisement
  1. Business

Questions raised about Florida program to help homeowners behind on mortgages

Florida Housing has scheduled a news conference for 10 a.m. today to announce “important information’’ about assistance for homeowners who have stayed current on their mortgages.
Florida Housing has scheduled a news conference for 10 a.m. today to announce “important information’’ about assistance for homeowners who have stayed current on their mortgages.
Published May 13, 2014

Florida housing officials are expanding a program to help homeowners who stopped paying their mortgages and owe more than their homes are worth.

At the same time, however, more than 6,000 Floridians who are current on their payments have been denied assistance under a separate program that uses the same source of federal money.

Jack McCabe, a Deerfield Beach real estate consultant,' said "it's dead wrong'' to help delinquent borrowers at the expense of people still paying their mortgages.

"I've said for a long time that the folks that had been making their payments and held up their end of the bargain with the banks should be getting preference for any type of mortgage reduction program,'' McCabe said.

To do otherwise "is not right and I think they need to re-examine their approach,'' McCabe said of officials at the state-run Florida Housing Finance Corp.

At its April 25 meeting, the housing agency's board voted to expand the $50 million Modification Enabling Pilot Project that it quietly launched last June to help underwater homeowners behind on their mortgages. Cecka Rose-Green, Florida Housing's spokesperson, said the program is for people who originally could afford their mortgages but had an unexpected drop in income.

"These programs are designed to help two different types of homeowners,'' she said.

After the Tampa Bay Times began questioning how the federal money was being used, Florida Housing scheduled a news conference for 10 a.m. today to announce "important information'' about the program that helps homeowners who have stayed current on their mortgages. The news release indicated that officials may now expand that program, too.

Both programs, which pay down mortgage balances by up to $50,000, use money from the federal Hardest Hit Fund.

• • •

The Modification Enabling Pilot Project, dubbed ReStart, for homeowners delinquent on their mortgage payments was created by a private organization called National Community Capital. Part of a large New Jersey nonprofit that develops affordable housing, National Community Capital says its "social mission'' is to prevent foreclosure and stabilize neighborhoods.

In 2012, it bought 249 Tampa Bay mortgages from the U.S. Department of Housing and Urban Development, which auctions off pools of delinquent, federally insured loans at prices far below face value.

National Community Capital then struck a deal with Florida's housing agency to use a mix of private and Hardest Hit money to reduce loan balances on its mortgages as well as on mortgages purchased by other investors at HUD auctions in 2012 and 2013.

"When more information becomes available,'' the housing agency said in March 2013, "we will make public announcements.''

No more announcements were made. And the program got off to a glacially slow start.

The sole homeowners to benefit last year were Luis and Felicita Irizarry of Tampa. Far behind on their payments, they owed $241,553 on a small house worth less than $100,000. National Community Capital forgave part of the balance. The state then kicked in $50,000 from the Hardest Hit Fund, reducing the principal to $86,000. After the Irizarrys completed a three-month trial modification period in September, their monthly payments were permanently cut in half, to $720.

"It was a blessing,'' said Irizarry, a retired immigration officer whose wife had lost her job.

Eight more homeowners in Hillsborough, Pinellas and Polk counties got ReStart help in January and February. An additional 223 are on track to qualify.

However, the housing agency and National Community Capital realized they didn't have enough mortgages purchased from HUD in 2012 and 2013 to use up all of the federal money earmarked for the ReStart program.

"Even if all of these loans successfully modify, there will still be a substantial amount of the $50 million allocation remaining,'' agency officials said.

As a result, board members agreed that homeowners with mortgages bought at HUD auctions in 2014 and 2015 would also be eligible for principal reductions.

Instead of expanding a program that benefits investors and delinquent borrowers, Terence Fernald of Spring wonders why the agency didn't transfer some of the $50 million to a program that helps homeowners still paying their mortgages?

Called Hardest Hit Fund Principal Reduction, that program drew 25,000 applicants within a few days of being announced in September. So far, 2,230 homeowners have had their mortgages paid down by up to $50,000 but at least 6,123 more including Fernald have been rejected.

"It's amazing that if you use your 401(k) and borrow money and do everything to stay on top, they don't have any help for you,'' Fernald says. "If you go under, they help you.''

Susan Taylor Martin can be contacted at susan@tampbay.com.

ALSO IN THIS SECTION

  1. At the request of a state lawmaker, Citizens Property Insurance Co.’s board is again bringing in an outside evaluator to help the insurer decide if and how to cull its policyholder base. Pictured is  Sen. Jeff Brandes (R-St. Petersburg) (left) and Barry Gilway, CEO of Citizens. [Courtesy of Sen. Jeff Brandes and Citizens Property Insurance Co.]
    At the request of St. Petersburg Sen. Jeff Brandes, the insurer will look for ways to shrink.
  2. In addition to offering groceries through Prime Now, Amazon has just launched Amazon Fresh in Tampa Bay. (AP Photo/Mark Lennihan)
    The online retailer branches out beyond the Whole Foods’ organic products it already offers.
  3. Pinellas County Commission chairwoman Karen Seel said a Tampa economic development group's recent decision to put "Tampa Bay" into its name "does great harm to the progress we have made on regional collaboration."
    But in Tampa, the chief executive officer of the nonprofit, government-supported economic development group is giving no sign of backing off the new name.
  4. This holiday season could be a record for travel. According to AAA, the Auto Club Group. Pictured is traffic on the Bayside Bridge in Clearwater in October. [Times file photo] [CHRIS URSO  |  Times]
    According to AAA, the Auto Club Group, more Americans are traveling this year than previous years.
  5. Yankee pitcher CC Sabathia, who played 19 seasons before injuries ended his career this fall, greets children attending the Yankees holiday concert at the Straz Center in Tampa on Thursday. Sabathia was joined by his wife Amber, right. [New York Yankees]
    Long-time host and retired news anchor John Wilson passed the torch this year to a new emcee, his son Mark Wilson.
  6. NewSouth Window Solutions has a factory and its headquarters near Tampa, seven factory showrooms around Florida and in Charleston, S.C., and an eighth scheduled to open early next year in the Pensacola-Mobile, Ala. market. [LensLife Productions]
    The buyer is PGT Innovations and wants to expand. NewSouth has a factory in Tampa and eight showrooms, with a ninth on the way.
  7. Methamphetamine and drug paraphernalia sit along side the stolen DeWalt power tool and phony store receipt as evidence is collected on the hood of the car after as two men are arrested at the Home Depot at 10151 Bloomingdale Ave, in Riverview, on Tuesday, June 26, 2019. [DIRK SHADD  |  Tampa Bay Times]
    A Times report shows Hillsborough deputies struggle to stomp out tool theft networks tied to drugs.
  8. U.S. homeowners have gained an average of $5,300 in equity since September 2018.  [Associated Press] [JOHN BAZEMORE  |  AP]
    Nationwide, home equity increased an average of $5,300 per homeowner over the past year.
  9. This house on Schefflera Road in Tampa's Carrollwood area was occupied by squatters who say they are the owners. [SUSAN TAYLOR MARTIN  |  Times]
    "We were constantly asked, ‘What’s going on with that house?' "
  10. Frontier Communications this week launched tools to combat robocalls better. Pictured is a Frontier flag flies outside Frontier's regional office in Tampa in 2015. [Times file photo]
    The internet, phone and cable provider will help its customers better identify spam and fraudulent calls.
Advertisement
Advertisement
Advertisement