1. Opinion

Editorial: Florida mismanaged homeowner help

Sheila Ellison, a recipient of federal mortgage assistance through got Hardest Hit fund, is still struggling to keep her home
Sheila Ellison, a recipient of federal mortgage assistance through got Hardest Hit fund, is still struggling to keep her home
Published Mar. 15, 2013

It's one thing to rail against federal spending. It's a whole other matter as governor to impede the smart disbursement of federal resources aimed at helping Floridians. The tale of how the state has managed the federally-funded Hardest Hit program is an insult to financially struggling homeowners and anyone with a financial interest in restoring Florida's housing market. Hopefully Gov. Rick Scott, who recently embraced Medicaid expansion as Florida's best option, also will learn from this debacle.

The $7.6 billion Hardest Hit program was launched in 2010 to stabilize the housing market in the midst of the economic downturn. It provides financial assistance to homeowners in states with high foreclosure rates who lose their job or take a substantial pay cut. In most cases, the funds are distributed in the form of monthly payments to underwrite mortgages or as a lump sum benefit to bring a delinquent mortgage current after a homeowner returns to work. When a home is saved, the benefits go far beyond what accrues to each family. Whole neighborhoods are better off since property values and physical plant don't decline.

But as last week's report by Tampa Bay Times senior correspondent Susan Taylor Martin showed, the state mismanaged its program from the start. Many deserving Floridians didn't get financial aid while felons, rule-breakers and scofflaws did. At the end of last year only 18 percent of Florida applicants received help, a lower rate than any other state, and only 10 percent of the $1 billion set aside for Florida homeowners had been disbursed. Much of the lackluster performance is attributable to Scott's antagonism toward federal stimulus money.

Rather than get the word out that this financial aid was available, Scott's office told the Florida Housing Finance Corp., the public agency administering the program, not to make certain public appearances to broadcast its existence. That came on the heels of another bad decision made before Scott took office in January 2011. Unlike other states, Florida wasted valuable time observing a pilot project in Lee County. Meanwhile thousands were losing their homes to foreclosure.

When the program did finally launch statewide in 2011, the state made some wrongheaded decisions on how to proceed. Florida disqualified most owners of condominiums by limiting eligibility to only condo complexes that have FHA approval — fewer than 300 of Florida's 25,000 condo complexes qualified. It capped benefits at six months when other states were offering much longer terms of help. When it became clear that only 12 percent of homeowners who received help could resume payments after the six-month run, the state extended the aid to 12 months.

The program also gave taxpayer funds to the wrong people in violation of rules and, in some cases, common sense. Recipients included people with fraud convictions. At least 10 Tampa Bay recipients had large federal tax liens. Some funds went to people who owned multiple properties, and one woman bought a second house while receiving Hardest Hit money. A Florida auditor general found the program suffered from lax verification of homeowners' incomes.

Compare Florida to the smaller state of Michigan that has already disbursed 75 percent of its Hardest Hit funds and helped thousands more homeowners than Florida. The entire episode may have supported Scott's position on federal stimulus, but it came at the expense of his pledge that is more relevant to Floridians' daily lives: Run government better.


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