- $73 million is certainly not small change
- Plan is aimed at bonded homeowners past 90 days
- Getting back to work will make it work for them
The Florida State Government has announced a proposal to invest a further $73 million of Obama’s grant money in efforts to keep homeowners in Palm Beach and Broward County out of foreclosures and in their homes.
“That’s sounds like a lot of money.” I remarked to an executive official at Florida Housing Finance Corporation. “Unfortunately,” he replied, “it won’t go far at all, given the size of the problem that we’re facing.”
While the Federal Treasury still has to formally approve the plan, the State Housing Agency intends that 75% of the $73 million be applied to temporally servicing the mortgages of as many underwater South Floridians as possible. That’s just $206.75 for each of the 353,000 households 90 days or more past due – no wonder the remark that the funds won’t go far at all.
The project is part of the State’s Mortgage Intervention Strategy. This will kick off in pilot mode in Lee County, before being rolled out throughout the State. The focus will be on single family households where breadwinners are either unemployed, or earning less than what they require for basic living. The Federal allocation could be used to lend them money to pay their mortgages for nine months, but the Florida Housing Finance Corporation is also hoping to persuade some bondholders into forgiveness, as a way to helping their customers get back on their feet financially.
State loan forgiveness could also be granted after 5 years too, once borrowers find employment again, diligently service their mortgages, and continue to remain in their homes. Principal modifications are also part of the State strategy.
The Florida focus is not on underwater borrowers who are able to keep on paying. The primary target remains underemployed and unemployed South Floridians in more imminent danger of foreclosure. As the executive at the Housing Finance Corporation explained, “We’ve been entrusted with this money to help the most vulnerable people.”
After homeowners whose incomes are equal to or below 140% of their county’s median incomes make application, the administration will consider these individually in terms of criteria such as divorce, and net income shedding due to disability or death. The program will be especially helpful in subsidizing South Floridians who could get back to work, albeit at a lower salary than when they took their loan.
Other parts of the Florida Housing Finance Corporation’s proposals to the United States Treasury included subsidizing buyers’ deposits on their houses, and paying for foreclosure-threatened households’ legal aid. These have been rejected, and State attention has now shifted to short sales.
Read more at www.foreclosuredatabank.com – we list foreclosed homes.
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Written by Alex Rolim.
