Apr, 25 2011
Soft start for Hardest Hit foreclosure prevention program
Nearly 9,500 homeowners applied for Florida's Hardest Hit foreclosure prevention program during its statewide debut last week, only a quarter of the estimated 40,000 borrowers the $1 billion plan is intended to reach.
The online application process opened April 18 after a yearlong buildup. The Obama administration announced the initiative in February 2010.
It's aimed at
unemployed or underemployed homeowners, who can receive up to six
months' worth of mortgage payments or $6,000 to bring a late loan
current. The mortgage payments are capped at $12,000.
Palm Beach
County homeowners accounted for about 10 percent of the 9,439
applications. The counties with the most people applying were Broward,
Miami-Dade, Orange and Palm Beach.
Overseen by the Florida Housing Finance Corp., Hardest Hit applications can be found online at www.flhardesthithelp.org .
With
5 percent of Florida's 3.2 million home loans between 30 and 60 days
delinquent, foreclosure defense attorney Ron Kaniuk said the initial
turnout for the program was "pathetically low."
A year-end
Mortgage Bankers Association report found nearly 20 percent of the
state's home loans were in foreclosure or at least 90 days late.
Kaniuk, who is based in Boca Raton, said there is a lack of awareness and understanding of the Hardest Hit plan.
"Also,
those who are hardest hit are worn out," he said. "They've been so
jerked around by the banks with HAMP and HAFA and a dozen other acronyms
that they don't want to apply for anything else."
The Home Affordable Modification Program and Home Affordable Foreclosure Alternatives program are federal homeowner help plans.
Still, not everyone thinks the early application numbers were low.
More
than 400 applications have been referred to Paul Baltrun, director of
homeowner assistance for the Law Office of Paul A. Krasker in West Palm
Beach.
Krasker's firm is among 14 groups in Palm Beach County approved by the Florida Housing Finance Corp. to handle applications.
Local
organizations give first approval to the applications, which are then
sent to the state for a final sign-off. Baltrun said he's surprised by
how many applications are receiving initial approval.
"I was anticipating an 80 percent fall-out," Baltrun said. "But we're experiencing a much higher approval rate."
To
receive Hardest Hit money, homeowners cannot be more than 180 days late
on mortgage payments - a requirement that leaves out thousands of
borrowers. The home also must be the borrower's primary residence, and
the homeowner cannot have unencumbered assets of $5,000 or more.
Florida's
unemployment rate improved last month, dropping to 11.1 percent from
11.5 percent in February. Palm Beach County fared even better: Its
jobless rate fell to 10.6 percent from 11.1 percent.
But attorney
Joel Pujol, whose law office also is managing applications, said the 255
requests his office received in the first two days of the process are
evidence of a continued struggle with the recession.
"The housing crisis and economic crisis will stabilize, but not any sooner than four, five, six years from now," Pujol said.
The
Hardest Hit program uses money from the Troubled Asset Relief Program. A
total of $7.6 billion has been awarded to 18 states and Washington.
Florida
tested its plan in Lee County, where homeowners were able to apply
beginning in October. As of early March, about $23 million had been
allocated to Lee County homeowners.
For eligibility requirements and more information about Florida's Hardest Hit program, go to www.flhardesthithelp.org.
Top counties
Florida counties with the most homeowner applications for the Hardest Hit foreclosure prevention program:
Broward 1,638
Miami-Dade 1,027
Orange 957
Palm Beach 939
Brevard 528