As part of a federal plan to keep borrowers at risk of foreclosure in their homes, more than $73 million is expected to pour into Palm Beach and Broward counties this year.
David Westcott, an executive with the Florida Housing Finance Corp. states:
"It sounds like a very large sum of money. But with the scope of the foreclosure crisis, unfortunately, it doesn't go very far."
"It sounds like a very large sum of money. But with the scope of the foreclosure crisis, unfortunately, it doesn't go very far."
Westcott's agency has proposed spending three-quarters of its allotment to temporarily cover the mortgage payments of 12,000 homeowners statewide. Almost 353,000 loans in Florida are 90 or more days past due.
The U.S. Treasury still must approve the plan, which could begin by the end of the year.
Florida Housing Finance would distribute $317.3 million to the state's 67 counties under its so-called Mortgage Intervention Strategy.
Broward County stands to receive $44.4 million, while $28.9 million is designated for Palm Beach County. Miami-Dade would get $50 million, the most of any county. On Friday, Florida Housing Finance said it will test the program in Lee County in southwest Florida before rolling it out to the rest of the state.
The money will cover as many as nine months of mortgage payments for single-family homeowners who are unemployed or in jobs with salaries below what they need for basic living expenses. The agency hopes to find lenders and investors willing to forgive up to nine more months to give homeowners additional time to get back on their feet financially.
Once homeowners find jobs and resume house payments, the state loans can be forgiven over five years if the debtors stay current on the payments and continue to live in the homes. Some of these borrowers also may qualify for a principal writedown of their mortgages.
The Mortgage Intervention Strategy is not designed for "underwater" Florida homeowners who can make their monthly payments.
These borrowers worry that negative equity will shackle them to the same homes for years.
However, Cecka Green, spokeswoman for Florida Housing Finance, said the jobless and underemployed have the more immediate concern of foreclosure. She states: "We've been entrusted with this money to help the most vulnerable people."
To get a loan, families can't make more than 140%t of the area's median income, which is $53,701 in Palm Beach County and $50,531 in Broward. That means a Palm Beach County family can't earn more than $75,181 and a Broward family can't make more than $70,743.
Once homeowners are able to apply for the program, local housing counselors will determine eligibility. They will consider such hardships as divorce and loss of income from a death or disability.
Mike Larson, a housing analyst with Weiss Research in Jupiter, said the mortgage program is a good way to help laid-off workers who likely can find similar jobs at close to the same salaries. He states: "we're not talking about huge numbers [of homeowners helped], considering the scope of the problem."
Ralph Stone, director of Broward County's Housing Finance and Community Development Division, said the money will be put to good use in Broward.
RealtyTrac Inc. said the county had the third-highest foreclosure rate in May across Florida, which posted the nation's third-highest foreclosure rate.
"Every bit helps," Stone said. "Twelve thousand is better than nothing."
Florida Housing Finance had proposed spending the other part of the $418 million on down payment assistance to buyers and on legal aid to homeowners facing foreclosure. But the Treasury rejected those programs.
State housing officials said they are exploring a plan for short sales as an option for troubled homeowners.
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