Millions of Dollars in Foreclosure Assistance Squandered by State Government Agencies

October 2, 2017 Posted by kingcade

According to a new report, state agencies “lumped unnecessary expenses into permitted expenses categories, elevating the risk of fraud, waste, abuse and over-payment throughout the (Hardest Hit Fund) program.”

The Hardest Hit Fund was created in 2010 to assist state housing finance agencies help struggling homeowners facing foreclosure.  More than $7.6 billion was designated for low-income homeowners with the Department of Treasury committing an additional $2 billion to the fund last year.

Any expense the state agencies charged to the program were supposed to be essential to easing loan modifications, according to federal guidelines. The investigation and recent report from the Office of the Special Inspector General for the Troubled Asset Relief Program (SIGTARP), found that the 19 housing finance agencies charged $3 million in wasteful and unnecessary spending.

Some of the charges were relatively small, such as TARP gift cards for housing finance employees, balloons and even a TARP piñata. But other charges were unnecessary and extravagant.  Every dollar spent on these items was one less for people desperate to save their homes.

Among the abuses covered in the 2017 SIGTARP audit report for the State of Florida include:

Florida Housing Finance Corporation. At the same time the Florida agency was billing TARP for gifts and $106,774 in bonuses to employees, it was denying TARP relief to homeowners at record rates, according to the report. The agency apparently processed only half the homeowners with incomes under $30,000 who were potentially eligible for loan modifications.

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