Tampa Bankruptcy Attorney Says Florida Has Chance at Redemption With ‘Hardest Hit’ Funds
Brandon, FL (Law Firm Newswire) March 28, 2016 – Florida and other states are set to receive additional federal foreclosure aid funds five years after the initial grants.
The Hardest Hit Fund was created in 2010 to help states with high rates of home foreclosures. A federal report last year found that Florida had both the slowest disbursement of funds and the lowest rate of acceptance of applicants. Now, Florida and other states are set to receive additional funds and an extended deadline for disbursement.
“Florida is getting a second chance,” said Reggie Osenton, a bankruptcy attorney in Tampa. “We have the embarrassing distinction of being the slowest to help struggling homeowners keep their homes. I hope state authorities will see this as a chance to redeem themselves and quickly get these funds into the hands of Florida families who need them.”
Florida received $1 billion when the Hardest Hit Fund was initially created as part of the Troubled Asset Relief Program, or TARP, with instructions to disburse the money by December 2017. Five years into that seven-year time frame, the state had paid out just half those funds, the least of all states under the program. The state also accepted applicants at the lowest rate, at 20 percent, compared with a program-wide average of 48 percent.
In February 2016, the U.S. Treasury Department announced it would give up to an additional $2 billion to states in two phases. In the first phase, Florida is set to receive $77.8 million. In the second phase, states will have to apply for additional funds, which will be awarded based on the use of previous payments. The new deadline for disbursement of foreclosure aid is the end of 2020.
“The economy may be improving, but the process is slow, and many Florida families are still struggling to make ends meet,” Osenton said. “Our foreclosure and bankruptcy rates are among the nation’s highest. State officials need to get their act together and do what’s right for Florida homeowners.”