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Billion Dollar Boondoggle That Funnels Money Back To Banks & Hurts Consumers

So, a consumer is falling behind on their payments and reaches out to their lender for help…perhaps before they’ve missed the first payment. The song and dance is all too familiar now, the lender would tell the consumer to miss payments, get further behind so that they could qualify for a modification.

In many cases that I’m aware, a consumer gets another piece of advice from the bank, looking to “help” the consumer

Contact Florida’s Hardest Hit Fund

They’re A Government Agency That might Be Able To Help Your Foreclosure

I’ve got so many problems with this advice, problems based on how I’ve seen the advice play out.  A biggest problem I’ve got is that when consumers are in the middle of a foreclosure lawsuit, they don’t need a housing counselor or someone else providing them advice on how best to resolve their dispute with the bank…they need a lawyer.  I’ve got another big problem with the way a consumer’s financial information is shared between these quasi government agencies and the banks that are suing them and the communication between the bank and that same agency….especially because the consumer is kept out of the loop on these communications.  And the consequence of this improper communication will be shown to be staggering in terms of the gross amounts of money sloshing around.  What I’m talking about is “The Banks” communicating with these quasi government entities about how much money is allegedly due from the consumer, then getting a check cut to The Bank from these agencies and then sticking the consumer with whatever cumulative debt and terms are left over at the end.

And while the money may (at first) be coming from The Government (that’s my taxpayer dollars and yours), the debt and the transaction itself are all in the name of that consumer. So why oh why is the Hardest Hit transaction not subject to the same disclosure requirements as all other transactions?

Wouldn’t it be most helpful is the consumer saw in detail the evidence that was being used against them before they sign up for another financial transaction?

The way Hardest Hit functions, it’s another brilliant boondoggle for the banks they pocket millions of additional taxpayer dollars with no consequence on the actual long term outcome.  Oh, and just wait for that long-term out come how many of the mortgages given in the name of consumers ($42,000 funneled back to the banks) will result in new foreclosures at the end of the year?  (The number is already high.)

The whole thing should be infuriating and people should be doing something about it.  People. Anyone.

The execution of Florida’s Hardest Hit Fund is like putting a band aid over cancer.

There are so very many foreclosure cases that the banks are not able to conclude…the consumer wins, the foreclosure case is dismissed….the bank was not entitled to enforce the debt or they simply could not put a case together properly so they failed at trial.  And yet, the implimentation of the Hardest Hit program seems to ignore this reality entirely, instead choosing to throw money back to the banks with no concern about the underlying validity of the bank claim or the ultimate viability of their case.

From The Guardian Story:

A minuscule portion of the money from Hardest-Hit has gone to help homeowners. An audit in 2012 found that states had delivered just $217.4m in assistance in the first two years, or 3% of the total. What is more, over a third of that figure went toward administrative expenses rather than homeowner relief.

“Florida Hardest-Hit is reaching far fewer homeowners than what was expected,” she says. In three years, Florida Hardest-Hit has provided aid to 9,745 homeowners, or 17% of all applicants, the lowest percentage of any participating state, according June 2013 report.

Weidner criticized Hardest Hit for failing to audit financial statements provided to them by banks to check for inflated fees that could make it impossible for homeowners to catch up on their mortgage. “The whole reason for the existence of this program is that the banks were engaging in fraud that led to the collapse,” he argued, citing numerous national investigations of banks overcharging homeowners. With nobody overseeing the charges in a legal capacity, the chances of abuse are higher.

Green said FHFC did not have the ability to check banking statements, relying instead on both the bank to deliver an accurate reading of the charges and homeowners to review them. “We can’t go line by line and check against the bank’s records,” said Green, who added that homeowners sometimes attempt to verify the charges and notify the bank of mistakes (“We encourage homeowners to do that”).


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