Real Estate News

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


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