It is no secret that Florida was one of the hardest hit states when the housing market collapsed. In fact, several thousand homeowners around the state are still in jeopardy of losing their homes. For this reason, many people are curious as to why the state declined federal funds that could help stop home foreclosure actions for at least some struggling homeowners.
According to reports, the Florida Housing Finance Corporation was eligible to dip into approximately $2 billion in money that was available to it and several other states. The funds were made available in two $1 billion parts. In the first phase of payouts, Florida did accept around $78 million. Those funds helped nearly 25,000 homeowners avoid foreclosure. However, around 120,000 additional homeowners were denied funds, which means that the state only used less than two-thirds of the federal funds it could have used.
In the second phase, the state could have dipped into approximately $250 million. However, it chose not to apply for the funds, along with other states, and no one is sure why. Without those funds, families who are struggling to keep their homes could end up facing foreclosure actions from their lenders.
Fortunately, there is another option for homeowners attempting to stop home foreclosure. Filing for bankruptcy would halt any collection activities by mortgage lenders, including the filing of a foreclosure action — at least temporarily. Depending on a homeowner’s circumstances, filing could provide the breathing space to decide whether to give up the home or work to keep it. It may be possible to keep the home while eliminating other debts, thus freeing up income for mortgage payments.
Source: orlandoweekly.com, “Florida officials reject $250 million federal foreclosure assistance funds“, Monivette Cordeiro, May 18, 2016