Florida received $1 billion from the federal government to help struggling homeowners, but just 13 percent of that money has gone toward helping them.
Florida received the stimulus money, part of the Hardest Hit Fund, after the housing market collapsed in 2008. Only California received more from the fund.
The money is intended to help homeowners who find themselves “underwater,” owing more than their homes are worth. In the meantime, people are drowning.
‘Not Getting Fund Out the Door’
“Florida is not getting a significant amount of the funds out the door to help homeowners,” according to the most recent Troubled Asset Relief Program, or TARP, inspector general report.
About $133 million has been distributed to 9,745 people, since it was first available in February 2010.
In contrast, in the 12 months before September, 115,000 Florida homes went through foreclosure — three times the national average — according to CoreLogic, a leading real estate analytics service.
“So many people have already been foreclosed on or have been given a deed in lieu of foreclosure or may have entered into a short sale on their home because they couldn’t afford their mortgage,” Walter Dartland, executive director of the Consumer Federation of the Southeast told Watchdog.org.
The report said $27.6 million was spent on administrative expenses, and more than $70 million was being held as cash-on-hand.
“At the start of 2011, Florida estimated that it would help as many as 106,000 homeowners,” the reports states. That estimate has been revised downward to 91,500.
Housing Entity Challenges Report
But a spokeswoman for the Florida Housing Corporation, the entity responsible for disbursing the billion dollars, said the program is on track and meeting the guidelines set by the U.S. Department of Treasury.
“At this time Florida has encumbered, or allotted, over $700 million,” said Cecka Rose Green. “That wasn’t included in the IG report.”
Meaning, while the money hasn’t been spent, it eventually will be by the Dec. 31, 2017, deadline. But will it be too late?
In addition to direct payments from Florida housing to banks on behalf of eligible homeowners and its mortgage reinstatement program, the state is developing three more programs with HHF money.
That leaves roughly $150 million after the maximum allowable administrative costs are absorbed.
“We’ll either develop another program or put that money back into one of our existing programs,” Rose Green said.
Banks Not Talking
In the meantime, qualified Floridians will have to make due. But that’s assuming eligible homeowners even know about the HHF money.
“The government makes it available and assumes citizens will somehow divine how to pursue these programs,” Dartland said.
On that account, Dartland largely blames banks.
“We know a number of people whose homes have dropped significantly in value, and we’ve recently helped one in particular,” he said. “The bank never suggested there was any kind of financial help out there. That was last week.”
Mortgages are often sold and resold among banks, sometimes making them difficult to track.
HHF is part of the $700 billion TARP (Troubled Asset Relief Program) that was signed into law under President Bush in October 2008 and that has continued to be executed under President Obama.
Helping Banks Not Homeowners
Critics across the ideological spectrum have panned the stimulus as a bank bailout that hasn’t done enough to help individual homeowners.
But when it comes to getting HHF money for Floridians, Dartland said, “It’s a very convoluted situation for ordinary people, and probably for the banks, too.
“The problem is the way the system is set up. It isn’t working,” Dartland said.
Used with permission of FloridaWatchdog.org.