“Hardest Hit Fund” to Help Struggling Homeowners Spent Millions on Parties, Bonuses, Cars
The Judicial Watch Blog – Corruption Chronicles AUGUST 31, 2017
A multi-billion-dollar government program launched by Obama to help families hit by the housing crisis squandered millions on parties, employee bonuses, cars, and superfluous data storage. The program is known as Hardest Hit Fund and operates under the Treasury Department, which does little to oversee it and sits by as federal audits expose pervasive fraud and waste. The findings of the latest probe were released this month by the inspector general of another reckless Treasury gem, the Troubled Asset Relief Program (TARP), Obama’s disastrous initiative to rescue the nation’s ailing financial institutions.
The findings are documented in an exhaustive 93-page report that should enrage every American taxpayer. For those who don’t have the stamina to get through the entire document, here are some highlights; $3 million in expenses, deemed “unnecessary” by the watchdog, were spent on picnics, barbecues, gift cards, a new customer center, employee bonuses, cars, and more. Here’s a breakdown straight out of the federal audit; $598,374 went to car allowances, free parking, and other transportation perks; $342,728 was spent on settlements, severance, and other employee legal expenses; $342,407 went to employee bonuses, cash debit cards, gifts, and other perks; $258,333 was spent on “avoidable” data storage expenses; $150,618 on barbecues, parties, picnics, steak and seafood dinners, and other food and beverages
U.S. Dept of the Treasury
Hardest Hit Fund
Program Purpose and Overview
The housing crisis that began in 2007 led to unprecedented home price declines and sustained and higher unemployment in certain parts of the country. Families in these areas have been particularly hard hit by this crisis as they have struggled to make their monthly mortgage payments and grappled with deeply underwater mortgages. While the housing market has strengthened in recent years, there is still an ongoing need to continue to assist homeowners and neighborhoods that continue to experience the negative effects of the financial crisis. As a result in 2016, an additional $2 billion was allocated to participating HHF states to continue foreclosure prevention and neighborhood stabilization efforts. Program participants have until the end of 2020 to utilize funds allocated under HHF.
President Obama established the Hardest Hit Fund® in February 2010 to provide targeted aid to families in states hit hard by the economic and housing market downturn. As part of the Administration’s overall strategy for restoring stability to housing markets, HHF provides funding for state HFAs to develop locally-tailored foreclosure prevention solutions in areas that have been hard hit by home price declines and high unemployment. From its initial announcement, this program evolved from a $1.5 billion initiative focused on HFAs in the five states with the steepest home price declines and the vast majority of underwater homeowners to a broader-based $9.6 billion initiative encompassing 18 states and the District of Columbia.
States were selected for funding either because they were struggling with unemployment rates at or above the national average or steep home price declines greater than 20 percent. Each state’s program was designed and is administered by that state’s housing finance agency (HFA).
Hardest Hit Fund programs vary state to state, but may include the following:
Mortgage payment assistance for unemployed or underemployed homeowners
Principal reduction to help homeowners get into more affordable mortgages
Help for homeowners who are transitioning out of their homes and into more affordable places of residence
Blight elimination and down payment assistance efforts
Most HHF programs target assistance toward unemployed homeowners and those with homes that are worth less than the value of their mortgages. For more information about the program in a particular state, please check with that state’s HFA or see the information here.
U.S. Dept of the Treasury
Treasury Announces Additional Investment in Hardest Hit Fund
Fifth Round of Funding Will Provide $2 Billion in Additional Assistance to
Struggling Homeowners and Communities
WASHINGTON – The U.S. Department of the Treasury today announced it would exercise its authority to obligate up to $2 billion in additional Troubled Asset Relief Program (TARP) funds to the Hardest Hit Fund (HHF) program. The additional investment in HHF will enable participating state Housing Finance Agencies (HFAs) to continue assisting struggling homeowners and stabilizing neighborhoods in many of the nation’s hardest hit communities. The fifth round of HHF funding will be allocated among participating HFAs in two phases of $1 billion each. States receiving additional funds will have until December 31, 2020 to utilize their HHF funds, an extension from the current program end date of December 31, 2017.
“Today’s announcement is the next step in the Administration’s effort to help struggling homeowners recover from the financial crisis, and strengthen the housing recovery,” said Treasury Secretary Jacob J. Lew. “Thanks to a bipartisan group of members of Congress who helped secure additional funding for the Hardest Hit Fund, we will be able to provide significant resources to hard hit states and target these critical resources towards programs that we know have helped Americans avoid foreclosure, and stabilized housing markets, including blight elimination programs.”
The first phase will allocate $1 billion using a formula based on state population and the HFA’s utilization of their HHF allocation to date. The use of state population as a primary factor is consistent with previous Hardest Hit Fund allocations, and consideration of utilization will prioritize states that have demonstrated the ability to effectively deploy funds. In order to qualify for funding in the first phase, HFAs must have utilized at least 50 percent of their existing HHF allocations.
State Allocations for Fifth Round Funding-Phase 1
The second phase will utilize an application process open to all participating HFAs. This phase will allow Treasury to focus additional resources on HFAs that have significant ongoing foreclosure prevention and neighborhood stabilization needs, a proven track record in utilizing funds, and successful program models to address those needs. HFAs will have until March 11, 2016 to submit applications, and will be allowed to request amounts up to 50 percent of their existing HHF allocation or $250 million (whichever is lower). Treasury anticipates announcing the second phase allocations by the end of April.
“While the housing market has strengthened in recent years, there are still many homeowners and neighborhoods experiencing the negative effects of the financial crisis,” said Mark McArdle, Treasury’s Deputy Assistant Secretary of Financial Stability. “The additional HHF funds authorized by Congress will allow states to continue their efforts to stabilize local communities and help struggling families avoid foreclosure.”
The Hardest Hit Fund was created in 2010 to provide $7.6 billion in targeted aid to 18 states and the District of Columbia deemed hardest hit by the economic and housing market downturn. The program was designed to leverage the expertise of state and local partners by funding locally-tailored foreclosure prevention and neighborhood stabilization solutions. As of the end of the third quarter of 2015, HHF has disbursed approximately $4.5 billion of the $7.6 billion obligated to the program, on behalf of homeowners and stabilization efforts, and assisted nearly a quarter of a million homeowners.
Program Allocations (pdf)
TOTAL HHF FUNDING $9,600,000,000.00
Unnecessary Expenses Charged to the Hardest Hit Fund
SIGTARP – OFFICE OF THE SPECIAL INSPECTOR GENERAL FOR THE TROUBLED ASSET RELIEF PROGRAM
OFFICE OF THE SPECIAL INSPECTOR GENERAL
FOR THE TROUBLED AsSET RELIEF PROGRAM
1801 L STREET, NW, 4 TH FLOOR
WASHINGTON, D .C . 20220
MEMORANDUM FOR: Honorable Steven T. Mnuchin – Secretary of the Treasury
Honorable Christy Goldsmith Romero – Special Inspector General ~ for the Troubled Asset Relief Program
Unnecessary Expenses Charged to the Hardest it Fund ·
(SIGT ARP 17-002)
We are providing this report for your information and use. SIGT ARP found $3 million in · unnecessary expenses charged to TARP by state agencies participating in TARP’ s Hardest Hit Fund.
The Office of the Special Inspector General for the Troubled Asset Relief Program conducted this audit (engagement code 03 5) under the authority of the Emergency Economic Stabilization Act of 2008 and Public Law 110-343, as amended, which also incorporates certain duties and responsibilities of inspectors general under the Inspector General Act of 1978, as amended.
We considered comments from the Department of the Treasury when preparing the report. Treasury’s comments are addressed in the report, where applicable, and a copy of Treasury’s response is included in its entirety.
We appreciate the courtesies extended to our staff. For additional information on this report, please contact me at any time.
SIGTARP-17-002 August 25, 2017
The findings are documented in an exhaustive 93-page report that should enrage every American taxpayer. For those who don’t have the stamina to get through the entire document, here are some highlights; $3 million in expenses, deemed “unnecessary” by the watchdog, were spent on picnics, barbecues, gift cards, a new customer center, employee bonuses, cars, and more. Here’s a breakdown straight out of the federal audit; $598,374 went to car allowances, free parking, and other transportation perks; $342,728 was spent on settlements, severance, and other employee legal expenses; $342,407 went to employee bonuses, cash debit cards, gifts, and other perks; $258,333 was spent on “avoidable” data storage expenses; $150,618 on barbecues, parties, picnics, steak and seafood dinners, and other food and beverages. The rest was spent on unemployment payments to former employees and a customer center in Rhode Island that had already received federal money years earlier for a new office. — AND MUCH MORE — GO TO LINK AND READ FULL 93 PAGE SIG AUDIT FILE.
The United States Treasury established the Hardest Hit Fund in February 2010, to provide targeted aid to states hit hardest by the subprime mortgage crisis which began in 2007. Each state housing agency gathered public input to implement programs designed to meet the distinct challenges struggling homeowners in their state were facing. HHF is part of the Troubled Asset Relief Program (TARP).
States were chosen based on two categories, their unemployment rates need to be at or above the national average or steep home price declines greater than 20 percent, since the housing market downturn. The means of funds distribution varies by state, and homeowners must contact their state housing finance agencies to apply for aid. A total of $7.6 billion were allocated to the 18 states and the District of Columbia in 2010.
As of Dec 31, 2011, only 3% of the funds had been spent according to a government report.
In 2016, another $2 billion was allocated to HHF by the Consolidated Appropriations Act, which is available to states until 2020.
According to a May 2012 report, Fox Business stated that programs like the Hardest Hit Fund and HAMP modifications are helping only a few homeowners and have not been effective at dealing with the mortgage crisis.
The Home Affordable Modification Program (HAMP) is a government program introduced in 2009 to respond to the subprime mortgage crisis. HAMP is part of the Making Home Affordable program (MHA), established in concert with the Hardest Hit Fund program (HHF) under the Troubled Asset Relief Program (TARP), a part of the Emergency Economic Stabilization Act of 2008. HHF provides targeted aid to home owners in states hit hardest by the economic crisis and works in tandem with HAMP and most MHA programs.
HAMP (and the entire MHA Program) is set to expire December 31, 2016, the last day to submit applications, and the Modification Effective Date must be on or before September 30, 2017. HHF has been extended to 2020.
Home Affordable Modification Program: Overview
The Home Affordable Modification Program (HAMP) is designed to help financially struggling homeowners avoid foreclosure by modifying loans to a level that is affordable for borrowers now and sustainable over the long term. The program provides clear and consistent loan modification guidelines that the entire mortgage industry can use. The Home Affordable Modification Program includes incentives for borrowers, servicers and investors.
Protesters: Moratorium On Foreclosures, Divert Funds From Hardest Hit To Homeowners
March 23, 2016 5:57 PM By Vickie Thomas
A protest Wednesday outside the Wayne County Treasurers Officer over tens-of-thousands of possible foreclosures.
Earl Jennings is with Russell Woods-Sullivan Area Association and helped to organize the Moratorium Now protest reports WWJ’s City Beat reporter Vickie Thomas.
“Which happens to be the largest historic district in the city,” says Jennings of the Russell Woods-Sullivan association.
Featured Image: A woman holds a sign asking for funds from ‘Hardest Hit’ be used to homeowners. (WWJ/Vickie Thomas)