Report: Florida has some work to do regarding foreclosure aid

On Behalf of | Oct 30, 2015 | residential real estate

Back in 2010, the U.S. Treasury Department announced the creation of the Hardest Hit Fund, a federal program designed to provide the 18 states hit hardest by the foreclosure crisis with much-needed funding to help stabilize their local housing markets.

Specifically, $7.6 billion was earmarked to help delinquent borrowers in these states — including Florida — stay in their homes or those who were underwater, meaning their homes were worth less than the amount owed on the mortgage.

Interestingly enough, a recently released report by the Special Inspector General for the Troubled Asset Relief Program found that the Florida Housing Finance Corporation, the state agency in charge of managing the Hardest Hit program, has spent $520.6 million and seen over 23,200 Floridians apply for these funds.

While these numbers may seem impressive on the surface, the report indicated that this is actually far from the case, as Florida has allocated a lower percentage of funds than other states, has one of the highest rates of withdrawn applications for the program and the lowest admission rates of any state. Indeed, the report was especially critical of the Sunshine State’s failure to take action shortly after the launch of the program.

“Hardest Hit Fund Florida was slow in getting assistance to homeowners and lacked effectiveness during the first years of the program, which was the height of the crisis, when Florida homeowners needed it most,” reads the report.

Other notable findings of the report include:

  • While the state has spent $520.6 million since the program’s launch in 2010, $411.8 million of this sum was spent over the last two years.
  • Despite roughly half of homeowners being underwater in the aftermath of the 2007 collapse, the state did nothing to cater to these underwater homeowners during the first three years of the Hardest Hit Fund’s existence.
  • Almost half of all Floridians who applied to the program were rejected during the first 2.5 years.

Here’s hoping that the Florida Housing Finance Corporation responds accordingly to this report, perhaps reevaluating it’s approach to the program, which gives states until 2017 to utilize their funds.

If you have questions or concerns regarding a residential real estate matter from foreclosure to an eminent domain concern, please consider speaking with an experienced legal professional as soon as possible.