While state and federal regulators have touted programs like Florida’s Hardest-Hit Fund as a way for homeowners to seek foreclosure relief, the truth is that not only are these operations failing to help as much as promised, they may actually be pushing some people closer to losing their homes.
According to a recent in-depth report by The Guardian, billions of dollars have been poured into these so-called “relief funds,” and yet reality is that homeowners are being misguided by the kind of support these programs can offer.
The intended purpose of these programs is to intervene with the banks on behalf of the homeowner, not only are they failing in this regard, but our Miami foreclosure lawyers have learned that non-lawyers are apparently giving legal advice to many of the borrowers seeking help. What’s more, some are finding that it’s very poor legal advice.
The intentions of the Hardest-Hit programs are good. The Treasury Department kicked off the program four years ago, setting aside some $7.6 billion from the Troubled Asset Relief Program in order to fund it in 18 states (including Florida) where the foreclosure crisis had wrecked havoc. Each state was charged with designing its own foreclosure relief program with those funds.
This has led to a lack of regulation and accountability that has resulted in hundreds of thousands of dollars going to banks to save homes that ultimately end up in foreclosure anyway.
In Florida, there are two separate programs. Here, if banks agree to participate, the program pays up to $18,000 in mortgage arrears and another $24,000 to make payments for the next year. If the bank is on board, it must agree to halt any foreclosure proceedings while the homeowner is receiving assistance.
The program is inflexible with these figures, so someone who was $25,000 in arrears would still be left $7,000 in debt, even if they didn’t ask for any help on future payments.
But many of those who have participated in the program end up losing their homes anyway. The bank pauses the foreclosure proceeding for a year while it collects federal funds, only to restart it again after the federal funding runs out. This happens despite assurances from Hardest-Hit staffers to homeowners that they won’t lose their home and they don’t need to hire a defense lawyer.
One of the Florida programs is currently under a federal audit, but the results of that won’t be known for several months. What we do know is that Florida’s Hardest-Hit programs have helped less than 10,000 homeowners, which is about 17 percent of all applicants who have reached out for help. That’s the lowest percentage of any of the 18 states participating.
Here, the Florida Housing Finance Corporation was tapped to run the state’s Hardest-Hit program. It might have seemed like a good fit initially, as this was a quasi-governmental organization that was in charge of promoting home ownership.
But here’s the problem: the housing finance corporation doesn’t have any experience with housing counseling or mortgage modification. So the customer service portion of the program was farmed out to 85 different adviser agencies with various accreditation.
Just to give you an idea of the lack of oversight: The leader of one of those organizations was recently arrested and accused of schemes to defraud.
Some of these advisers are telling homeowners they don’t need a lawyer. They are telling homeowners not to worry about the judgments being handed down by the courts.
And yet, there are instances in which the judges say they are unaware of any agreements made with Hardest-Hit, which means they are returning foreclosure judgments in favor of the banks.
The housing finance corporation has called the process “a learning curve” for its staffers. Meanwhile, people who trusted these programs are still losing their homes.
You may be entitled to relief from one of the federal foreclosure relief programs. But trust your case only to an experienced foreclosure defense lawyer.
If you’re battling foreclosure in Miami or the surrounding areas contact Jacobs Legal for a confidential appointment to discuss your rights. Call (305) 358-7991. Also, don’t miss Miami Foreclosure Attorney Bruce Jacobs on 880AM/the Biz, every Wednesday from 5 p.m. to 6 p.m. on “Mortgage Wars,” discussing foreclosure topics that matter to YOU.
A housing relief program with policies that ‘throw people into the grinder’, Jan. 19, 2014, By David Dayen, The Guardian, UK
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