A program created by the U.S. Treasury Department in January to help homeowners affected by the housing and unemployment crises is finally coming to Florida.
Officials announced Wednesday that a $23 million pilot program for the Housing Finance Agency Innovation Fund for the Hardest-Hit Housing Markets will begin Monday in Lee County before being available to the rest of Florida in early 2011. The program will be administered by the Florida Housing Finance Corp.
Lee County, whose Cape Coral-Fort Myers metro area had the highest rate of foreclosures in 2008 and the second-highest in 2009, was picked for the pilot program because of the exodus of homeowners there brought about by the bursting of the housing bubble.
Lee has been identified as the epicenter of the foreclosure crisis, said David Wescott, FHFCs director for single-family housing programs. Overall, Lee was a good choice to apply this before the statewide program was implemented.
Some of those affected by the housing crisis may be able to qualify for the Unemployment Mortgage Assistance Program (UMAP), where loans can be given to homeowners to make monthly mortgage payments for up to 18 months, or for the Mortgage Loan Reinstatement Payment Program (MLRP), where loans will be issued to bring past-due mortgage payments current for up to four months.
It is uncertain how many people will actually be able to get assistance, as there are myriad qualifications homeowners must meet in order to qualify for the program, and officials are only accepting the first 1,000 applications in the Lee County pilot program. Those interested in applying can do so at this website.
In order to qualify, a homeowner must be a U.S. and Florida resident, unemployed or underemployed, have a total household income of less than 140 percent of the area median income, have a monthly housing debt of more than 31 percent of gross monthly income, use the property as a primary residence and own no other property.
Also, a homeowners loan must be older than Jan. 1, 2009, and the balance of the mortgage must not exceed $400,000 at the time of the application. Another catch is that the homeowners mortgage service provider must agree to the plan and sign up for the program.
While no major mortgage service companies have signed on to the program, officials are confident they will do so soon, and hope streamlined, standardized loan payments to homeowners will satisfy any logistical concerns on behalf of mortgage holders and entice them to join up.
Well be posting a list of those servicers (who sign up for the program) online, Wescott said, adding that the mortgage lenders are not required to reduce any of the mortgage balance to participate.
Another wrinkle to the foreclosure mess was added recently when some mortgage companies decided to halt foreclosure proceedings across the U.S. when it was discovered that improper paperwork had been filed in many cases in order to hastily process foreclosures. Bank of America has lifted its foreclosure freeze in 23 states including Florida, but other banks like JP Morgan Chase have maintained theirs so far.
FHFC officials are hoping the new program can provide some stability to a chaotic market.
I dont know if the voluntarily imposed foreclosure moratoriums would factor into what were doing here. The market here is really in flux and we want to give them a good option there, said Stephen Auger, FHFC executive director.
Auger said the program is expected to be available statewide in early 2011 and is funded in Florida to the tune of $1 billion.
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