The program approved last week to help at least 1,500 Floridians keep their homes is the most promising effort yet by the agency that has mostly sat on $1 billion in federal foreclosure prevention money.
Florida was one of 17 states, considered hardest hit by the foreclosure crisis, to receive money from the Troubled Asset Relief Fund to help borrowers. Nearly three years after the program began, the state has spent only 10 percent of the money to help the unemployed and underemployed pay their mortgages.
To make things worse, the Tampa Bay Times reported that dozens of homeowners who did get mortgage assistance from the Hardest Hit program had foreclosures, IRS liens and bankruptcies that predated the housing crisis. The federal government prohibits homeowners with mortgage-related felony convictions from receiving aid, but doesn’t require background checks or preclude people with other felony convictions from getting help.
The nation hadn’t seen a foreclosure crisis like this since the Depression, and the Florida Housing Finance Corp. never had handled such a program. “I think we are doing the best job we can possibly do,” said Cecka Rose Green, agency spokesperson. “There are people out there that, but for this help, their homes would have been foreclosed on.”
The agency also has had to contend with interference by Gov. Rick Scott, who picks and chooses which federal stimulus programs he likes. The governor restricted efforts to publicize Hardest Hit program and forced the agency to reduce homeowner assistance from the originally planned 18 months to six months when the program launched statewide in 2011. When — big surprise — six months of assistance failed to keep many borrowers from losing their homes, the agency increased the time limit to a more reasonable 12 months.
Still, after three years the agency should have enough experience to do better. As of Dec. 31, only 18 percent of Floridians who applied for monthly Hardest Hit assistance had received it — the lowest percentage of any state.
So now the Florida Housing Finance Corp., will dedicate $50 million to paying down mortgage principal. The goal is to get payments that don’t exceed 35 percent of a borrower’s monthly income. Studies show that principal reduction is the best way to keep borrowers in their home, since such help makes monthly payments more affordable and gives homeowner equity.
If the program proves successful, the agency should expand it. And Gov. Scott, — Mr. “Florida Families First” — should stay out of the way.
for The Post Editorial Board