Probe comes at U.S. senator’s request
WASHINGTON, D.C. – April 12, 2013 – (RealEstateRama) — The federal government today disclosed it was launching an investigation of Florida’s $1 billion Hardest Hit mortgage assistance program, a probe requested by U.S. Sen. Bill Nelson.
In a letter this afternoon, a special inspector general within the U.S. Treasury Department told Nelson her office would initiate an audit of Florida’s program in response to concerns the lawmaker expressed in a letter he wrote last month.
“We share in your desire to bring more transparency to [ the mortgage-assistance program ] and note the importance of your concerns,” Special Inspector General Christy L. Romero wrote in her response to Nelson, which he received today.
“This is good news for the people of Florida,” Nelson said. “It’s a crucial step toward getting some of the financially strapped homeowners in our state more access to the help that should be readily available to them.”
Nelson called for the federal investigation of the Hardest Hit Fund after a Tampa Bay Times report uncovered dozens of homeowners with questionable backgrounds getting aid.
In his letter raising questions about possible “mismanagement” and “inaction,” Nelson cited the Times report and urged an investigation by the special inspector general of the federal Troubled Assets Relief Program, commonly known as TARP. “I would ask that your office look thoroughly into Florida’s management of the homeowner-help program,” Nelson wrote.
A big problem for Nelson was that out of the more than $1 billion the federal government has made available to help Florida homeowners avoid foreclosure, the state has distributed less than 16 percent of it in a three-year period. If the state doesn’t get the money to homeowners, it eventually will go elsewhere.
Last month, the Times reported that:
• The office of Gov. Rick Scott — a critic of federal stimulus programs — restricted efforts to publicize the Hardest Hit program and was instrumental in reducing aid when it went statewide in 2011.
• The vast majority of Florida’s 557,000 condo owners were ineligible for help for more than a year because of an arbitrary policy that was later reversed.
• At least 15 people in Tampa Bay alone got assistance despite felony records for fraud, possession of child pornography and other serious offenses. Dozens more received help despite previous foreclosures, IRS liens and bankruptcies.
The head of Florida Housing Finance Corp., the public agency that runs the Hardest Hit program, has said state and federal audits have not found aid going to ineligible applicants.