SIGTARP 16-001 October 6, 2015

Factors Impacting the Effectiveness of 

Hardest Hit Fund Florida
Office of the special inspector general

 For the Troubled Asset Relief Program 

1801 L Street, NW, 4th Floor

Washington, D.C. 20220

 

SIGTARP 16-001 October 6, 2015

October 6, 2015

MEMORANDUM FOR: The Honorable Jacob J. Lew – Secretary of the Treasury

/Signed/

FROM: The Honorable Christy Goldsmith Romero – Special Inspector 

General for the Troubled Asset Relief Program

SUBJECT: Factors Impacting the Effectiveness of Hardest Hit Fund Florida 

(SIGTARP 16-001)

We are providing this report for your information and use. It discusses the Florida Housing 

Finance Corporation’s implementation and Treasury’s oversight of the programs that comprise 

Florida’s Hardest-Hit Fund (“HHF”) Program. 

The Office of the Special Inspector General for the Troubled Asset Relief Program conducted 

this evaluation (engagement code 006), under the authority of Public Law 110-343, as 

amended, which also incorporates the 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 the Management Comments – Appendix J. 

We appreciate the courtesies extended to our staff. For additional information on this report, 

please contact Mr. Bruce S. Gimbel, Deputy Special Inspector General for Audit and 

Evaluation (Bruce.Gimbel@treasury.gov / 202-927-8978), or Ms. Jenniffer F. Wilson, 

Assistant Deputy Special Inspector General for Audit and Evaluation 

(Jenniffer.Wilson@treasury.gov / 202-622-4633.)
Factors Impacting the Effectiveness of Hardest Hit Fund Florida

SIGTARP 16-001 October 6, 2015

Summary

Five years into the Troubled Asset Relief 

Program’s (“TARP”) second largest 

foreclosure prevention program known as the 

Housing Finance Agency Innovation Fund for 

the Hardest Hit Housing Markets (“Hardest 

Hit Fund” or “HHF”), HHF in Florida has 

helped only 22,400, far less than expected at 

the beginning of the program. HHF Florida 

has drawn down only about half the $1 billion 

in TARP funds available. 

What SIGTARP Found

SIGTARP found that Treasury abandoned its 

announced intent to bring strict accountability 

by measuring Hardest Hit Fund program 

effectiveness, and as a result, Treasury has 

allowed the Hardest Hit Fund in Florida to 

underperform compared to other HHF states, 

consistently. The Administration and 

Treasury announced that the Hardest Hit 

Fund combined flexibility for states with strict 

accountability by Treasury, and that program 

effectiveness would be measured, with 

effective oversight. Treasury told all 19 

participating state housing finance agencies 

that they were required to have a tracking 

system to measure progress against goals. 

Former Treasury Home Preservation Office 

Chief Phyllis Caldwell told SIGTARP in 2011, 

that Treasury could evaluate success in HHF 

in ways such as, “are we reaching the right 

number of people, are we reaching them in a 

sustainable way.” 

Treasury has no goals or targets to measure 

program effectiveness due to fear of 

impacting the “dynamic nature” of this TARP 

program, which has led to a lack of 

accountability and effectiveness of both 

Treasury and Florida’s HFA. Treasury could 

have set specific goals/targets tailored to 

HHF Florida, but did not do so. SIGTARP 

found that as a result, HHF Florida has not 

been as effective in reaching homeowners as 

other states. HHF Florida has the lowest 

homeowner admission rate of any HHF state, 

one of the highest withdrawn application 

rates, and has consistently denied 

homeowners at higher rates than the national 

average.

Treasury has no goal for the right number of 

people to be helped by HHF Florida, and as 

a result, Treasury has allowed Florida’s HFA 

to reduce its estimate of the number of 

people to be helped by HHF by 63% from 

106,000 to 39,000, despite the fact that 

Florida had the nation’s highest foreclosure 

rate at 2.3% in 2014.

Treasury has no targeted homeowner 

admission rate for HHF Florida, and as a 

result, only 20% (22,400 of 109,774) of 

homeowners who applied for help received 

assistance. This is the lowest of any HHF 

state, and is far below the other 18 states’ 

average of providing assistance to about half 

(48%) of homeowners who apply. HHF has 

consistently had a low homeowner admission 

rate over five years (ranging from 18-23%).

Treasury has no targeted homeowner denial 

rate for HHF Florida, and as a result, HHF 

Florida has consistently denied a higher 

percentage of homeowners for assistance 

(27-45%) than the national average. This 

rate improved this year, but is still slightly 

above the national average of 26%. 

Treasury provides no transparency on why 

HHF Florida denied homeowners.

Treasury has no targeted number of 

homeowner applications withdrawn by 

Florida’s HFA, and as a result, as of March 

2015, nearly 40% of all homeowners who 

applied to HHF Florida either withdrew their 

application or had their application withdrawn 

by Florida’s HFA. This rate has escalated 

from 35% in 2012, and was far higher than 

the other 18 states’ average of 24%, as of 

March 2015.

Treasury has no target for how long HHF 

Florida should process homeowner 

applications, and as a result, it takes a 

median of nearly 6 months (167 days) for a 

homeowner to get assistance.

SIGTARP found several factors contributed 

to HHF Florida’s slowness in getting 

assistance to homeowners and lack of 

effectiveness during the height of the crisis 
Factors Impacting the Effectiveness of Hardest Hit Fund Florida

SIGTARP 16-001 October 6, 2015

when Florida homeowners needed it most. 

Treasury lacked comprehensive planning 

and waited for Florida’s HFA to get large 

servicers to participate. Unemployed 

homeowners would have to wait more than 

one year for statewide rollout of HHF 

assistance.

 

SIGTARP found that despite choosing 

Florida for HHF because it had the third 

highest home price decline in the nation, 

there was no HHF Florida program targeted 

to underwater homeowners for the first three 

years. Treasury left it to Florida’s HFA acting 

deferentially.

In the first two years, nearly half of all 

homeowners were denied as ineligible, but 

Treasury accepted Florida HFA’s justification. 

Two weeks after SIGTARP’s 2012 report, 

Florida’s HFA voted to eliminate four 

eligibility requirements that accounted for half 

of all denied homeowners.

 

In December 2010, Treasury deferred to 

Florida HFA’s request to reduce the duration 

of unemployment assistance from 18 months 

to 6 months, the shortest duration in HHF, 

despite Treasury knowing that 

unemployment was 27 weeks or longer. 

Florida’s HFA would extend assistance to 

12 months, two weeks after SIGTARP’s 2012 

report. 

Treasury can, and has on occasion, 

intervened to “change the game,” “pressure” 

or “push,” Florida’s HFA, according to senior 

Treasury officials, and that intervention has 

brought some improvement. Treasury 

intervened to get large servicers to 

participate. After SIGTARP’s 2012 HHF 

report, Treasury took strong action to 

increase HHF Florida’s effectiveness, 

sending a November 2012 Action 

Memorandum to Florida’s HFA, instructing 

them to increase homeowners assisted to 

750 a month, raise the ratio of approved 

homeowners to denied homeowners, 

increase inadequate staffing levels, and 

create a program to address negative equity. 

This brought improvement, but Treasury did 

not hold Florida’s HFA to 750 homeowners 

per month, and HHF Florida continued to lag 

behind other HHF states. 

Despite improvements made in 2013, 

SIGTARP found several factors contributing 

to HHF Florida lagging behind other HHF 

states. Treasury did not identify and mitigate 

the obstacle that Florida’s HFA was unable to 

handle the flood of applications for the 2013 

principal reduction program. After the first 

week, Florida’s HFA stopped accepting 

applications for 8 months. Only 14% of 

homeowners who applied have received this 

assistance, and more than one-third of 

homeowners have been denied. Treasury 

did not identify and mitigate obstacles for 

senior citizens with reverse mortgages facing

problems applying for assistance and 

providing necessary documentation. As a 

result, 46% of all seniors who have applied 

had their application withdrawn. Treasury 

has no goal for the length of time Florida’s 

HFA takes to process an application, and as 

a result, it takes 9 to10 months for a senior 

citizen to obtain assistance. Treasury lacked 

comprehensive planning in a HHF Florida 

program for a non-profit to buy homes and 

HHF to modify mortgages by not identifying 

and mitigating an obstacle that the non-profit 

might not be the successful bidder at HUD 

sales. After a two-year pilot, only 92 

homeowners have been helped through that 

program.

Rather than holding itself and Florida’s HFA 

strictly accountable, Treasury conducts 

deferential oversight, without a sense of 

urgency. Treasury’s current Home 

Preservation Office (HPO) Chief Mark 

McArdle described to SIGTARP how 

Treasury “leaves it to the states” to decide. 

Treasury looks for incremental change –

either a program change or steady growth 

quarter to quarter- “one or the other,” 

according to Treasury HPO Chief McArdle. 

Treasury only tracks and measures against 

the goal of HHF Florida spending their 

allocated $1 billion in TARP funds by the end 

of the program in December 2017. After five 

years, HHF Florida has spent only half of 

these funds, despite Florida’s homeowners

experiencing a critical need.
Factors Impacting the Effectiveness of Hardest Hit Fund Florida

SIGTARP 16-001 October 6, 2015

SIGTARP also found that Treasury shifts to 

homeowners the burden of complying with 

the Dodd-Frank Act’s prohibition on anyone 

convicted of a mortgage-related crime within 

the last 10 years from receiving HHF funds, 

by only complying with this law by requiring 

homeowners to self-report. Treasury 

conducts no due diligence to check readily 

available public databases on convictions of 

homeowners, making HHF vulnerable to 

fraud and thwarting the intent of the DoddFrank Act. 

What SIGTARP Recommends

Given the sense of urgency that Treasury 

must adopt to improve the effectiveness of 

HHF Florida to help the urgent needs of 

Florida homeowners now, not by 

December 31, 2017, when the program ends, 

and to ensure that Florida homeowners have 

the same chance of HHF assistance as 

homeowners in other states, SIGTARP made 

20 recommendations to Treasury to improve 

HHF Florida’s homeowner admission rate, 

homeowner withdrawal rates, homeowner 

denial rates, time to process homeowner 

applications, and time to process senior 

citizens’ applications. SIGTARP also made 

recommendations for Treasury to reassess 

whether all eligibility requirements are 

absolutely necessary and eliminate those 

that are not, particularly for senior citizens;

increase reporting at a county level to give 

insight into areas for improvement; report 

why homeowners have been denied; require 

more detailed reporting on withdrawn 

applications; increase contact with 

homeowners to give insight into areas for 

improvement; and form a performance 

committee to meet each quarter to measure 

performance in each state, identify obstacles,

and develop strategies to mitigate those 

obstacles. To reduce HHF’s vulnerability to 

fraud, waste, and abuse, SIGTARP made 

recommendations related to Treasury 

conducting due diligence, including 

background checks on homeowners and 

HFA employees related to convictions. 

Treasury provided comments to the draft 

report. SIGTARP addressed those 

comments where applicable. Treasury 

generally disagreed with SIGTARP’s 

findings, and said that “Treasury believes it 

would hamper progress and slow the pace of 

assistance by substantially increasing the 

administrative burden to operate these 

programs.” Treasury did not agree to 

implement SIGTARP’s recommendations, 

but said they would “review all of SIGTARP’s 

recommendations and respond to each one 

in the ordinary course.”
Factors Impacting the Effectiveness of Hardest Hit Fund Florida

SIGTARP 16-001 October 6, 2015

Table of Contents

Introduction................................................................................................................................................. 1

Background................................................................................................................................................. 3

According to Treasury Data, Only 20 Percent of Homeowners Who Applied for Help from the 

Hardest Hit Fund Florida Received Assistance – the Lowest of All HHF States.................................... 5

According to Treasury Data, the Other HHF States Average Providing Assistance to About 

Half (48 Percent) of Homeowners Who Applied ........................................................................... 7

HHF Florida Consistently Denied Homeowners at Higher Rates than the National HHF 

Average Every Year, Which Improved This Year, But is Still Slightly Above the 

National Average .......................................................................................................................... 10

HHF Florida Has a High Number of Withdrawn Applications (Either by the Homeowner or 

Florida’s HFA) Compared to the National HHF Average............................................................ 12

Treasury Has Not Done Everything It Can To Ensure That HHF Florida is Effective in Providing 

Assistance to Homeowners and as a Result HHF Florida Has Underperformed .................................. 14

SIGTARP Found That Treasury Abandoned Its Intent To Set Goals for HHF Program 

Effectiveness and Measure Progress Against Those Goals.......................................................... 14

Treasury Is Not Operating with a Sense of Urgency To Ensure that HHF Florida Is 

Effective........................................................................................................................................ 17

Several Factors Contributed to Hardest Hit Fund Florida’s Slowness in Getting Assistance to 

Homeowners and Lack of Effectiveness During the Height of the Crisis When Florida 

Homeowners Needed it Most................................................................................................................. 19

Plagued by a Lack of Comprehensive Planning by Treasury, Which Waited for Florida’s 

HFA To Get Large Servicers To Participate, the Hardest Hit Fund Florida was Slow To 

Reach Homeowners...................................................................................................................... 19

For the First Three Years (February 2010 – September 2013), There Was No Hardest Hit 

Fund Targeted Assistance to Underwater Homeowners in Florida .............................................. 21

For the First Two Years, Nearly Half of All Who Completed an Application for the Hardest 

Hit Fund in Florida Were Denied as Ineligible............................................................................. 22
Factors Impacting the Effectiveness of Hardest Hit Fund Florida

SIGTARP 16-001 October 6, 2015

Treasury Allowed Florida To Decrease the Duration of HHF Unemployment from 18 

Months to 6 Months Despite Treasury Knowing that Unemployment was 27 Weeks or 

Longer, and that Treasury Allowed Extended Unemployment Assistance in HAMP ................. 24

Treasury Took Some Strong Oversight Action in Response to SIGTARP’s 2012 Report and 

Recommendations To Hold Treasury and the Florida Housing Finance Agency Accountable 

and Make HHF Florida More Effective................................................................................................. 28

Improvements After Treasury Intervened To Take a Stronger Role Following SIGTARP’s 

2012 Report Prove that Stronger and More Proactive Treasury Action in HHF Leads to 

Stronger HHF Performance .......................................................................................................... 30

Despite Improvements Made in 2013, HHF Florida Continues To Lag Behind Other HHF States 

in Effectiveness...................................................................................................................................... 32

Implementation Issues Delayed HHF Florida Principal Reduction Assistance and Caused a 

Backlog ......................................................................................................................................... 32

The HHF Program for Senior Citizens Has Struggled in Part Because Seniors Had 

Difficulty Applying and Providing Necessary Documentation.................................................... 35

The HHF Florida Two-year Pilot To Buy and Modify Pools of Mortgages Has Not Been 

Effective........................................................................................................................................ 38

Treasury Must Ensure that the New Homebuyer HHF Program Progresses Effectively and 

Make Timely Changes To Ensure Effectiveness.......................................................................... 40

HHF Florida Has Vulnerabilities to Fraud That Treasury Should Strengthen ................................ 40

Conclusion ................................................................................................................................................ 45

Recommendations..................................................................................................................................... 55

Management Comments and SIGTARP’s Response................................................................................ 60

Appendix A – Objective, Scope, and Methodology ................................................................................. 61

Appendix B – Acronyms and Abbreviations............................................................................................ 63

Appendix C – Utilization of TARP HHF Funding, By State ................................................................... 64

Appendix D – HHF Florida Assistance by County Over the Last 12 Months and Program to Date 

– As of 3/31/2015................................................................................................................................... 65
Factors Impacting the Effectiveness of Hardest Hit Fund Florida

SIGTARP 16-001 October 6, 2015

Appendix E – HHF Application Volume Over Time by Application Status – Florida Compared 

to Other HHF States............................................................................................................................... 67

Appendix F – Application Denial Rate by State....................................................................................... 68

Appendix G – Application Withdrawal Rate by State.............................................................................. 69

Appendix H – Treasury Action Memorandum to Florida HFA ............................................................... 70

Appendix I – Audit Team Members......................................................................................................... 72

Appendix J – Management Comments..................................................................................................... 73
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 1

SIGTARP 16-001 October 6, 2015

Introduction

In 2009, the United States was in a financial crisis, with approximately 2.8 million 

homeowners receiving foreclosure filings, according to RealtyTrac LLC, 18.3% 

of them (517,000) in Florida.

1 Almost 6% (nearly 3 in 45) of Florida households 

entered into foreclosure, compared to slightly more than 2% (1 in 45) of 

households nationwide. In February 2010, the Administration announced the 

second largest TARP housing program, the $7.6 billion TARP Housing Finance 

Agency Innovation Fund for the Hardest Hit Housing Markets (“Hardest Hit 

Fund,” or “HHF”), to target help to families in the states “hit the hardest by the 

aftermath of the housing bubble.”2 

Treasury selected the first five HHF states because each saw the average price of 

homes fall by more than 20% from the peak – Florida had a 37.4% average price 

decline. Treasury expanded HHF three times to cover 18 states and the District of 

Columbia (the “states” or “HHF states”). Treasury was so concerned with 

Florida’s home price decline and 11.8% unemployment rate, that it would pick 

Florida in two additional rounds, allocating $1 billion in TARP funds for HHF in 

Florida (“HHF Florida”). HHF Florida is administered by Florida’s housing 

finance agency called the Florida Housing Finance Corporation (“Florida’s 

HFA”). Treasury, as the steward for TARP funds, is responsible for oversight 

over HHF.

Two years into this TARP program, on April 12, 2012, SIGTARP issued a report 

finding that HHF had experienced significant delay in providing help to 

homeowners due to several factors including a lack of comprehensive planning by 

Treasury and a delay and limitation in participation in the program by large 

servicers and the government-sponsored enterprises (“GSEs”) – Fannie Mae and 

Freddie Mac. As of December 31, 2011, which was the latest Treasury data 

available at that time, the Hardest Hit Fund had only spent $217.4 million to 

provide assistance to 30,640 homeowners – approximately 3% of the TARP funds 

allocated to HHF and approximately 7% of the minimum number of homeowners 

whom the state HFAs estimated helping over the life of the program, which ends 

in 2017. At that point, HHF Florida had provided assistance to 3,302 

homeowners (3.1% of the 106,000 expected to be helped by HHF) and spent 

$15,156,356 (1.4% of allocated TARP funds).3

 SIGTARP also reported that 

nearly all (98%) of the help provided to homeowners under HHF had been related 

to unemployment assistance or reinstatement of past-due amounts, the only types 

of assistance for which GSEs directed servicers to participate. SIGTARP 

concluded that without significant change, HHF was likely to be limited in 

 1 RealtyTrac is a data analytics company that provides real estate data analytics and services.

2 TARP’s signature housing program that began in early 2009 is the Home Affordable Modification program (“HAMP”).

3 Florida’s estimate of the number of homeowners expected to be helped by HHF may double-count individual 

homeowners who receive assistance from more than one program. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 2

SIGTARP 16-001 October 6, 2015

addressing negative equity for homeowners who are underwater. Treasury 

rejected SIGTARP’s recommendations. 

In a letter to SIGTARP in 2013, Senator Bill Nelson requested that SIGTARP 

initiate a review of HHF Florida after a Tampa Bay Times article was published 

entitled “Tax dollars are paying Florida mortgages for felons, debtors.” 

SIGTARP began an evaluation of the Hardest Hit Fund in Florida to assess 

Florida’s HFA’s implementation and Treasury’s oversight of HHF Florida. Our 

evaluation covers the entirety of HHF Florida. SIGTARP conducted this 

evaluation in accordance with the “Quality Standards for Inspection and 

Evaluation” established by the Council of the Inspectors General on Integrity and 

Efficiency. For a discussion of the evaluation’s scope and methodology, see 

Appendix A.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 3

SIGTARP 16-001 October 6, 2015

Background

The Administration announced that HHF would “Help address urgent problems 

facing homeowners at the center of the housing crisis” [emphasis added]. The 

White House announced, “This new innovation fund will help housing finance 

agencies in the hardest-hit areas and localities further respond to the most 

pressing problems in their communities” [emphasis added].

As SIGTARP reported in 2012, former Treasury Chief of Homeownership 

Preservation Office (“HPO”) Phyllis Caldwell told SIGTARP, “We focused on 

price declines....We thought about principal reduction and negative equity to 

address that in places where homeowners had put down 20% or more and were 

still underwater.”4 Caldwell explained that Treasury thought it “could capture the 

responsible borrower caught in the bubble and then price declines.” 

Treasury’s website describes the Hardest Hit Fund as providing targeted aid to 

families in states hit hard by the economic and housing market downturn, to 

provide funding for state HFAs to develop locally-tailored foreclosure prevention 

strategies. Treasury’s former HPO Chief Phyllis Caldwell told SIGTARP in 2011 

that there were differences at the state level that showed the need for state-level 

solutions, a local program versus a national program, saying “for instance, it’s 

difficult to develop the same set of criteria for Arizona and Ohio in order to 

develop home foreclosure prevention solutions.”

Hardest Hit Fund Florida started with: (1) unemployment assistance – HHF pays 

an unemployed or underemployed homeowner’s mortgage for a set number of 

months up to a set amount and (2) reinstatement – a one-time payment up to a set 

amount to a mortgage lender to help satisfy past-due amounts. According to a 

2012 report by the State of Florida Auditor General, Florida’s HFA has 

employees who work on HHF Florida, but largely relies on approximately 100 

advisor agencies they contract with throughout Florida to process HHF 

homeowner applications and determine eligibility.

Three quarters of homeowners in Florida who are receiving HHF assistance are 

unemployed or underemployed. Almost all (96%) of homeowners in Florida 

receiving HHF assistance made less than $70,000, with 82% making less than 

$50,000. Additionally, about 80% have underwater homes.5 Half of these 

homeowners were 60 or more days’ past-due on their mortgage (including 42% 

who were 90 days past-due).

Although unemployment and home price decline have improved in Florida, 

Florida homeowners are still struggling. In 2014, Florida had the nation’s highest 

foreclosure rate at 2.3%, according to RealtyTrac. As of March 31, 2015, the 

 4 See SIGTARP, “Factors Affecting Implementation of the Hardest Hit Fund Program,” April 12, 2012. 5 Underwater homes have a loan to value ratio over 100%.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 4

SIGTARP 16-001 October 6, 2015

latest Treasury data available as of the drafting of this report, after five years, 

HHF Florida had provided assistance to 22,400 homeowners, had spent about half 

of the allocated TARP dollars ($495.6 million) and spent $53.5 million on 

administrative expenses, outreach, and counseling.6

 Only three states lag behind 

Florida in their use of available TARP funds, as a percentage of HHF funds 

received.

7

 6 As of March 31, 2015, Florida HFA had drawn down $596.3 million (56%) of the approximate $1.06 billion in HHF 

funds available, leaving $495.6 million. Figures may not add due to rounding.

7 See Appendix C for utilization of HHF funding by state.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 5

SIGTARP 16-001 October 6, 2015

According to Treasury Data, Only 20 Percent of 

Homeowners Who Applied for Help from the 

Hardest Hit Fund Florida Received Assistance –

the Lowest of All HHF States 

Only 20% of homeowners who applied for the Hardest Hit Fund Florida received 

assistance. According to Florida HFA’s most recent report sent to Treasury, as of 

March 31, 2015, only 22,400 of the 109,774 homeowners who applied for the 

Hardest Hit Fund in Florida received assistance – a 20% homeowner admission 

rate. Treasury has not set a goal for what is the right number of people for HHF 

Florida to reach, and rejected SIGTARP’s 2012 recommendation to set such 

goals. Treasury has allowed HHF Florida to decrease the estimate of 

homeowners to be helped by 63%, from 106,000 homeowners to 39,000.8

 

SIGTARP found with HHF Florida that this estimate has limited usefulness 

because Treasury has permitted Florida HFA to change its estimate several times, 

creating a shifting baseline that makes it difficult for Treasury to measure HHF 

Florida’s progress and to hold itself or Florida’s HFA accountable for getting 

assistance to homeowners when they needed it most. 

Treasury also has not set a goal for a target homeowner admission rate for HHF 

Florida. SIGTARP found that HHF Florida has the lowest rate of admitting 

homeowners into HHF than any of the other 18 HHF states. 

 8 On May 30, 2012, Treasury allowed Florida’s HFA to decrease its aggregate estimate of 53,000 homeowners to be 

helped in each of Florida’s two HHF programs (unemployment assistance and reinstatement) to 45,000 homeowners 

each. On September 20, 2013, when HHF Florida began its first HHF principal reduction program, Treasury allowed 

Florida’s HFA to adjust their estimates of homeowners to be helped in the unemployment assistance and reinstatement 

programs to a combined total of 25,000 homeowners. With the addition of the Principal Reduction Program (“PR”) and 

two other programs – Modification Enabling Pilot Program (“MEP”) and Elderly Mortgage Assistance Program 

(“ELMORE”) – Florida HFA’s estimate is 39,000.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 6

SIGTARP 16-001 October 6, 2015

TABLE 1

HARDEST HIT FUND HOMEOWNER ADMISSION RATE BY STATE

State

Homeowners 

Receiving 

Assistance

Total 

Applicants

Application 

Approval Rate

District of Columbia 697 861 81%

Tennessee 7,355 9,352 79%

Indiana 5,198 6,818 76%

Ohio 24,485 34,778 70%

Illinois 13,798 20,294 68%

Kentucky 6,668 9,881 67%

North Carolina 19,060 28,787 66%

Rhode Island 3,075 4,833 64%

Mississippi 3,187 5,096 63%

Michigan 25,573 54,230 47%

New Jersey 6,000 13,093 46%

South Carolina 9,209 22,113 42%

Oregon 11,740 28,269 42%

California 48,864 119,453 41%

Nevada 5,282 13,694 39%

Georgia 6,245 22,695 28%

Alabama 3,947 14,766 27%

Arizona 3,728 15,619 24%

Florida 22,400 109,774 20%

Source: SIGTARP analysis of Treasury, Housing Finance Agency Aggregate Report as of March 31, 2015, obtained from 

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Housing-Finance-Agency-Aggregate-Report.aspx, accessed August 10, 2015.

The low homeowner admission rate for Florida has been relatively constant 

throughout the history of HHF (ranging from 18-23% since March 2011).9

 This 

is not new information to Treasury. Each quarter, Florida’s HFA reports to 

Treasury on the total number of homeowners who applied, received assistance, 

were denied assistance, had their applications withdrawn, or have applications in 

process, by each program. 

Transparency in reporting to Treasury at a county level in HHF can be 

significantly improved to give insight into the effectiveness of HHF Florida. The 

number of homeowners who received assistance is the only county-level data that 

Treasury requires to be reported.10 This data shows that in the last year 

(April 1, 2014 to March 31, 2015), 28 of 67 Florida counties (more than 40%) 

provided HHF assistance to fewer than 10 Florida homeowners. Because 

Treasury does not require Florida HFA (or any other state HFA) to report the 

number of homeowners who applied for HHF in each county, Treasury and the 

public had no insight into each county’s homeowner admission rate. 

 9 Florida’s March 31, 2012 report to Treasury showed that HHF in Florida had only provided assistance to 18% of 

homeowners who applied. Florida’s March 31, 2013 report to Treasury showed that HHF in Florida had only provided 

assistance to 21% of homeowners who applied. Florida’s March 31, 2014 report to Treasury showed that HHF in 

Florida had only provided assistance to 23% of homeowners who applied.

10 See Appendix D for information related to Florida HHF assistance by county.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 7

SIGTARP 16-001 October 6, 2015

Treasury also does not require state HFAs to report by county, the number of 

homeowners denied for HHF, whose applications were withdrawn, or whose 

applications are in process, which would provide greater transparency and insight 

into each county’s performance. Treasury also does not require Florida HFA to 

report on a county-level the performance of each category of HHF Florida 

assistance (such as principal reduction or unemployment). County-level HHF 

performance data is particularly important for HHF Florida’s advisor agents in 

counties who review applications and make decisions on homeowners. 

Treasury has no goal for how long it takes Florida’s HFA (or their county-level 

advisor agents) to process homeowner applications. According to Treasury’s data 

as of March 31, 2015, HHF Florida takes a median of 167 days from the time a 

homeowner seeks help to the time they get unemployment assistance. Last 

quarter’s median was 174 days. HHF Florida takes a median of 226 days to get 

reinstatement assistance, which has improved, but last quarter was 167 days. 

Given the various steps and players involved in the homeowner application 

process, measuring county-level performance could bring transparency and 

insight to see where there might be delays or other obstacles.

According to Treasury Data, the Other HHF States Average 

Providing Assistance to About Half (48 Percent) of Homeowners 

Who Applied

Nationwide HHF (including Florida) Provides Assistance to 42 Percent of 

Homeowners

The other 18 states in HHF average providing assistance to about half (48%) of 

homeowners who apply. HHF Florida’s low homeowner admission rate pulls the 

national average for HHF down to 42%, which is still more than double HHF 

Florida’s homeowner admission rate. According to the latest Treasury data 

available as of the time of drafting this report, as of March 31, 2015, across all 19 

HHF states, 226,511 of the 534,406 homeowners who applied for the Hardest Hit 

Fund received assistance – a 42% homeowner admission rate nationwide. One in 

every five homeowners who applied (20%) received help from the Hardest Hit 

Fund Florida, compared to a national average of two in every five homeowners 

(42%).
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 8

SIGTARP 16-001 October 6, 2015

Figure 1: Hardest Hit Fund Homeowner Admission Rates Over Time – Florida vs. Other 

HHF States

Source: SIGTARP analysis of Treasury, Housing Finance Agency Aggregate Report as of March 31, 2015. 

An overall low homeowner admission rate raises questions as to the effectiveness 

of HHF Florida and the fact that the rate has not improved raises questions about 

whether HHF Florida has been effective in responding to “urgent” and “pressing” 

problems as HHF promised. Homeowners who did not get help from HHF 

Florida either: (1) were denied (29,544 homeowners – 27%); (2) had their 

application withdrawn by Florida’s HFA or withdrew their application after 

approval (43,030 homeowners – 39%); or (3) had an application in process 

(14,800 homeowners – 13%).11

 11 According to the latest Treasury data available, as of the time of the drafting of this report, March 31, 2015.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 9

SIGTARP 16-001 October 6, 2015

Figure 2: Status of Florida Hardest Hit Fund Applications Over Time

Source: SIGTARP analysis of Treasury, Housing Finance Agency Aggregate Reports as of March 31, 2015, 

March 31, 2014, and March 31, 2013, obtained from http://www.treasury.gov/initiatives/financialstability/reports/Pages/Housing-Finance-Agency-Aggregate-Report.aspx, accessed 8/10/2015. HFA performance data 

from March 31, 2012 was obtained from each states Q1 2012 HHF quarterly performance report, the websites containing 

these reports can be accessed through Treasury’s “Hardest Hit Fund: State-By-State Information” website at: 

http://www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Pages/Program-Documents.aspx.

Note: Figures may not total 100% due to rounding.

Compared to other HHF states, Treasury’s latest data as of the drafting of this 

report (as of March 31, 2015) shows that HHF Florida has a lower homeowner 

admission rate, higher rate of withdrawn homeowner applications, and higher 

percentage of applications in process than the national average. Because HHF 

Florida’s numbers skew the national average, SIGTARP is also presenting the 

average of the other 18 HHF states.12

 12 Appendix E shows a comparison of Florida application data to that of the other HHF states.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 10

SIGTARP 16-001 October 6, 2015

Figure 3: Status of Hardest Hit Fund Applications – Florida vs. Other HHF States

Source: SIGTARP analysis of Treasury, Housing Finance Agency Aggregate Report as of March 31, 2015, obtained from 

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Housing-Finance-Agency-Aggregate-Report.aspx, accessed 

8/10/2015.

Note: Figures may not total 100% due to rounding.

HHF Florida Consistently Denied Homeowners at Higher Rates than 

the National HHF Average Every Year, Which Improved This Year, 

But is Still Slightly Above the National Average

HHF Florida has a high number of applications “in process”

Treasury has not set a goal for a target homeowner denial rate for HHF Florida. 

As a result, through the history of HHF, HHF Florida has denied a higher 

percentage of homeowners for assistance than the national average in HHF, which 

showed improvement this year, but is still slightly above the national average. 

After the first year in HHF, as of March 31, 2011, according to Treasury’s data, 

Florida’s HFA reported denying 45% (288) of the 639 homeowners who applied, 

compared to a national HHF average of 21%. As of March 31, 2012, Florida’s 

HFA had denied 11,352 homeowners, 43% of all who applied, compared to the 

national HHF average of 31%.13 After SIGTARP’s April 2012 report, there was 

some improvement, but Florida still denied a higher percentage of homeowners 

for assistance than the national average – denying 38% of homeowners for the 

 13 According to Treasury data, as of March 31, 2012, Florida’s HFA has denied 11,352 homeowners, 43% of the 26,280

homeowners who had applied for HHF.

48%

26%

24%

2%

Other HHF States

Homeowners Receiving Assistance

Homeowners Denied Assistance

Homeowners Withdrawn

Homeowners in Process

20%

39% 27%

13%

Florida

Homeowners Receiving Assistance

Homeowners Denied Assistance

Homeowners Withdrawn

Homeowners in Process

42%

26%

27%

5%

All HHF States

Homeowners Receiving Assistance

Homeowners Denied Assistance

Homeowners Withdrawn

Homeowners in Process
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 11

SIGTARP 16-001 October 6, 2015

years ended March 2013 and March 2014, compared to the national average of 

28%.14

Figure 4: Hardest Hit Fund Homeowner Denial Rates Over Time – Florida vs. Other

HHF States 

Source: SIGTARP analysis of Treasury, Housing Finance Agency Aggregate Report as of March 31, 2015, 

Note: See Appendix F for application denial rates by state.

Treasury does not have insight into why these homeowners were denied. Even 

though Florida’s HFA includes in a letter to the homeowner the reason for denial, 

Treasury does not require reporting on those reasons. Treasury’s HPO Chief told 

SIGTARP that in 2011, Treasury looked very closely at the reasons why 

homeowners were denied in Florida. However, Treasury provides no 

transparency to the public on the reasons why HHF Florida denied homeowners.

For the first time this year ended March 31, 2015, there was improvement. HHF 

Florida reported denying 29,544 (27%) of the 109,774 homeowners who applied, 

which is slightly over the national average of 26%. Treasury has not set a goal 

that HHF Florida’s rate of denying homeowners meet some target such as the 

 14 According to Treasury data, as of March 31, 2013, Florida’s HFA had denied 15,729 homeowners, 38% of the 41,890

homeowners who had applied for HHF. According to Treasury data, as of March 31, 2014, Florida’s HFA had denied 

26,334 homeowners, 38% of the 68,598 homeowners who had applied for HHF.

45% 21% 20% 43% 31% 28% 38% 28% 27% 38% 28% 26% 27% 26% 26%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

March

2011

March

2012

March

2013

March

2014

March

2015

Florida Nationwide Average Other HHF States
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 12

SIGTARP 16-001 October 6, 2015

national average, or if it did, it was neither made public nor memorialized. This 

improvement should be maintained. Also, during this same reporting period, 

HHF Florida had very high rates of homeowners whose HHF applications were 

withdrawn – 39% (compared to the national HHF average of 27%), and 14,800 

homeowners whose HHF applications were in process – 13% (compared to the 

5% national HHF average), which requires further Treasury review. 

HHF Florida Has a High Number of Withdrawn Applications (Either 

by the Homeowner or Florida’s HFA) Compared to the National HHF 

Average 

According to Treasury’s data, nearly 40% (43,030) of all 109,774 homeowners 

who applied for HHF Florida had their application withdrawn, either initiated by 

themselves or by Florida’s HFA. This has been an escalating issue with HHF in 

Florida, growing from 2012 reporting of 35% of homeowners who applied. The 

national HHF average is 27% withdrawn applications. HHF Florida has such a 

high withdrawn applications rate that it drags the national average up. The 

average of the other HHF states is 24% withdrawn applications. 

Figure 5: Hardest Hit Fund Withdrawn Application Rates Over Time – Florida vs. Other HHF 

States 

Source: SIGTARP analysis of Treasury, Housing Finance Agency Aggregate Report as of March 31, 2015, obtained from 

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Housing-Finance-Agency-Aggregate-Report.aspx, accessed 

8/10/2015.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 13

SIGTARP 16-001 October 6, 2015

Treasury lumps two very different situations into one category: a withdrawal of 

the HHF application initiated by the homeowner after being deemed eligible for 

HHF assistance, and a withdrawal initiated by Florida’s HFA for homeowners 

who do not respond to requests for information. Treasury does not know how 

many homeowners withdrew their application themselves versus how many 

homeowners saw their application withdrawn by Florida’s HFA because Treasury

does not require that reporting.15

Neither Treasury nor Florida’s HFA know the reasons why a homeowner 

withdraws. They do not follow up with the homeowner to ask. A senior Florida 

HFA official told SIGTARP about the principal reduction assistance that HHF 

Florida began providing in September 2013, saying, “unfortunately, you know, 

there’s certainly been well over 12,000 of those folks who on their own accord 

have decided not to pursue their applications and have, you know, withdrawn and 

voluntarily left the process for reasons unfortunately they don’t often 

communicate to us.” SIGTARP found that HHF Florida has always had high 

withdrawn application rates, even prior to the launch of the principal reduction 

assistance.

Treasury has not set a goal for HHF Florida for the number of applications 

withdrawn by Florida’s HFA. High numbers of applications that Florida’s HFA, 

or their advisor agencies in counties around Florida, withdraws for homeowners 

who are not responding to requests for information, raises questions about 

whether HHF Florida is operating in the most effective way in each county. 

Treasury does not require any county-level reporting on withdrawn applications, 

let alone breaking down applications that Florida’s HFA withdrew by county. 

County-level data would bring accountability and give Treasury faster and better 

insight into program effectiveness and targeted areas for improvement, including, 

among other things, whether there is homeowner confusion that could be 

remedied or whether there could be a more effective way to reach out to 

homeowners.

 15 Appendix G shows application withdrawal rates by HHF state.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 14

SIGTARP 16-001 October 6, 2015

Treasury Has Not Done Everything It Can To 

Ensure That HHF Florida is Effective in Providing 

Assistance to Homeowners and as a Result HHF 

Florida Has Underperformed

SIGTARP found that Treasury set the objective of the Hardest Hit Fund to allow 

HFAs “to develop creative, effective approaches that consider local 

conditions”[emphasis added], but Treasury has not done everything it can do to 

ensure that HHF Florida is “effective” in providing assistance to homeowners. In 

Treasury’s March 29, 2010 press release, and in guidelines given to the HHF 

states, Treasury stated that the objective of HHF is to develop creative, effective 

approaches that consider local conditions. After Treasury approved state specific 

HHF programs, on June 23, 2010, Treasury’s Assistant Secretary for Financial 

Stability Herbert Allison stated that the Administration “will continue to do 

everything it can to help those who are struggling the most during this difficult 

time.” 

SIGTARP Found That Treasury Abandoned Its Intent To Set Goals 

for HHF Program Effectiveness and Measure Progress Against 

Those Goals

In February 2010, the White House announced, “The program will be under strict 

transparency and accountability rules.” The White House announced that 

“program effectiveness” would be measured, and that there would be “effective

oversight” under the Emergency Economic Stabilization Act of 2008 (the law that 

created TARP) [emphasis added]. Oversight under EESA means Treasury, not 

just the state HFAs. 

On March 29, 2010, Treasury repeated that program activity will be subject to 

effective oversight under EESA, and stating: 

HFAs will be required to develop and maintain operational and 

performance metrics, have a detailed financial reporting system 

and track homeowners helped through its programs. HFAs will 

report data to Treasury on a periodic basis, including metrics used 

to measure program effectiveness against stated objectives. 

Treasury may request that the HFA modify the proposed 

performance measures or seek additional metrics as necessary 

[emphasis added].

Treasury repeated this statement in its guidelines to state HFAs. Treasury’s 

guidelines provide that HHF is designed to allow the maximum possible 

flexibility to eligible HFAs in designing programs that are tailored to the needs of 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 15

SIGTARP 16-001 October 6, 2015

the specific state, while Treasury ensures the effectiveness of the program. The 

two concepts of state flexibility and Treasury measuring effectiveness were not 

mutually exclusive. Treasury required:

• Detailed information about the specific problems that the program will 

address as well as the specific goals for the program and how progress toward 

those goals will be measured.

• Identification of any anticipated program implementation obstacles and a 

related mitigation plan.

• Information of its organizational capacity to implement the program.

• Detailed staffing plan and key partners including their roles, expertise and 

relationship.

• Plan to minimize program and fraud risk, and risk management and fraud 

prevention strategies.

• Description of proposed methodology for measuring program progress, 

including key performance measurements, frequency of reporting and tracking 

system to measure progress against goals.

Treasury’s former Chief HPO Phyllis Caldwell told SIGTARP in 2011, that 

Treasury could evaluate success in HHF in ways such as, “are we reaching the 

right number of people, are we reaching them in a sustainable way...” [emphasis 

added]. HHF states performance numbers are the only information Treasury 

publishes on accountability in HHF.

SIGTARP found in its April 2012 report, that Treasury had not set any 

measurable goals and metrics that would allow Treasury, the public, and Congress 

to measure the progress of HHF. The recommendations SIGTARP made in April 

2012 reflect what Treasury said they would do at the start of HHF to conduct 

effective oversight. In April 2012, SIGTARP did not tell Treasury what goals 

they should set to measure program effectiveness, instead recommending: 

1) Treasury set meaningful and measurable performance goals for HHF, 

including, at a minimum, the number of homeowners Treasury estimates will 

be helped by the program, and measure progress against those goals. 

2) Treasury should instruct state HFAs in HHF to set meaningful and measurable 

overarching and interim performance goals with appropriate metrics to 

measure progress for their individual state programs.

3) Treasury should set milestones at which the state HFAs in HHF must review 

the progress of individual state programs and make program adjustments from 

this review.

Treasury rejected SIGTARP’s recommendations stating, “Treasury believes 

establishing static numeric targets (as the recommendations seem to suggest) is 

not well suited to the dynamic nature of HHF. Treasury has a rigorous 

performance management program in place, which requires each HFA to set goals 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 16

SIGTARP 16-001 October 6, 2015

and targets for all of its initiatives.” Treasury has not set any numeric or nonnumeric goals and targets, except one time for HHF Florida in November 2012. 

HHF Florida’s goals are “preserving homeownership” and “protecting home 

values,” goals that are more high-level expectations that could have been 

considered met in the first year. The number of people helped is not the only goal 

that Treasury could have set. There are a number of goals that Treasury could 

have set, but did not. Treasury’s current HPO Chief Mark McArdle told 

SIGTARP, “There is no such thing as one set goal that works or doesn’t work.” 

Treasury’s responsibility to define targeted outcomes and measure progress 

against them is important for accountability over the state HFAs’ uses of TARP 

funds. The Government Performance and Results Act (“GPRA”) requires Federal 

agencies to measure performance against established goals. Congress enacted this 

law to hold Federal agencies accountable for achieving program results and to 

improve management of Federal programs. Treasury cannot escape GPRA’s 

requirements because a state should have flexibility and be innovative under 

HHF. Flexibility and innovation does not come in a Federal program without 

accountability that can be measured.

 

Treasury has not done everything it can do for HHF Florida. Targeted outcomes 

that can be measured benefit Treasury, Congress, and taxpayers in seeing areas 

for improvement. HHF Florida is, and has been, underperforming. HHF Florida 

loses opportunities to be “dynamic” by having, for example, such a low 

homeowner admission rate. For five years, Treasury has tried it their way, with 

HHF Florida having no numeric goals and targets to measure effectiveness, and as 

a result, the numbers have not added up for Florida homeowners.

The dynamic nature of the program will not be harmed by numeric goals. The 

one time Treasury set numeric goals and measureable targets in HHF in 2012 

there was significant improvement (discussed in more detail later in this report). 

At the beginning of HHF, Treasury warned HHF states that Treasury may request 

that the HFA modify the proposed performance measures or seek additional 

metrics, as necessary. Treasury has only done this one time – in 2012. In 2012, 

Treasury took strong action by issuing Action Memorandums to Arizona (in 

February 2012), Georgia (in April 2012), New Jersey (in May 2012), and Florida 

(in November 2012) with numeric goals to increase the number of homeowners 

receiving assistance along with other changes.16 Treasury’s action brought 

improvements to the effectiveness of HHF Florida, but Treasury would not repeat 

it.

 16 Appendix H is Treasury’s Action Memorandum to Florida. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 17

SIGTARP 16-001 October 6, 2015

Treasury Is Not Operating with a Sense of Urgency To Ensure that 

HHF Florida Is Effective

SIGTARP found that Treasury is not operating with a sense of urgency to ensure 

that HHF Florida is effective now, but is instead tracking to see if HHF Florida 

will spend the allotted $1 billion in TARP by the end of the program in December 

2017. The Administration and Treasury announced that they would act with a 

sense of urgency to help homeowners with HHF. In February 2010, the White 

House announced HHF as a TARP program to “Help address urgent problems 

facing homeowners at the center of the housing crisis” [emphasis added]. The 

White House announcement also states that HHF will respond to “the most 

pressing problems” in those communities [emphasis added]. On June 23, 2010, 

Treasury announced that it had approved state plans to use HHF funding, 

including HHF Florida, stating that the first round of HHF states now could roll 

out their specific Hardest Hit Fund programs to provide relief to struggling 

homeowners “as soon as possible” [emphasis added]. On August 4, 2010, 

Treasury announced that it had approved the second round of HHF states to begin 

using HHF funds, with Treasury’s Assistant Secretary for Financial Stability 

Herbert Allison stating, “[W]e are committed to doing everything we can to 

immediately help those who are hurting the most during these tough times” 

[emphasis added]. 

Each quarter Treasury has seen in HHF Florida’s reports that it is 

underperforming in comparison to other states, but does not do all that it can do to 

conduct effective oversight as was promised. Treasury describes its role more as 

a collaborator with the state HFAs. Treasury’s HHF Program Director told 

SIGTARP, “There is so much going on that we just can’t see based on a quarterly 

performance report.” Treasury’s HHF Program Director told SIGTARP that she 

talks to the states every day. She described in a Treasury blog how “participating 

states and Treasury have worked together to develop and implement” HHF, 

explaining:

Treasury and other stakeholders have communicated constantly, 

sharing best practices, implementing new ideas, and refining programs 

and outreach campaigns. This collaboration and flexibility have 

helped states respond to changes in housing markets, local economies, 

and industry dynamics, and as a result, improve the quality of 

assistance provided to homeowners. Treasury has also worked with 

participating states to identify barriers to program success and make 

appropriate changes quickly so programs continue to grow. 

This collaboration is not memorialized. Treasury’s HHF Program Director told 

SIGTARP that if it’s not working, the state HFAs tweak it, and Treasury’s role is 

to support them in those efforts. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 18

SIGTARP 16-001 October 6, 2015

Rather than requiring state HFAs to have metrics used to measure program 

effectiveness against stated objectives as Treasury said it would conduct its 

oversight, senior Treasury officials instead look for improvement more generally. 

Treasury HPO Chief McArdle told SIGTARP in 2013, “What we push states to 

do is to continuously improve. So you either make a change to your program, you 

show steady growth quarter to quarter. You do one or the other. And you know, 

basically Florida followed that thing.” Success from continuous improvement 

that is not defined results in:

• No target of success for HHF Florida to aim for.

• No baseline to measure HHF Florida’s performance against.

• No standard for accountability of Treasury or Florida’s HFA.

• Lack of useful information and insight into areas where the program’s 

effectiveness can be improved mid-course, rather than at the end of HHF 

when it is too late.

The one time Treasury set a goal for HHF Florida, the program’s effectiveness 

improved, only for it to slip again, under Treasury’s watch. In November 2012, 

Treasury required HHF Florida to nearly triple the number of homeowners HHF 

assisted each month from an average of 278 to 750 homeowners. This goal 

spurred Florida’s HFA to reach for a target without diminishing their ability to 

innovate and tailor HHF programs to that state’s needs. On the contrary, it 

enabled both Florida’s HFA and Treasury to ensure that innovation was 

implemented in such a way that the program could be more effective. However, 

Treasury allowed HHF Florida to slip from this goal. Between October 2012 and 

March 2015, HHF Florida assisted an average of 534 homeowners each month –

216 fewer than Treasury’s goal. Only once, in the third quarter of 2013, did HHF 

Florida achieve the goal of an average of 750 homeowners helped a month, and 

did not meet this target in any other quarter. Treasury missed an opportunity to 

hold itself and HHF Florida continuously accountable for maintaining 

improvement. 

The one goal that Treasury does track is whether HHF Florida will use their 

allocated $1 billion in TARP funds by the program end; after five years, HHF 

Florida only used half of the allocated TARP dollars in a 7-year program. 

Treasury HPO Chief McArdle told SIGTARP, “I believe they’re going to utilize 

their funds with [the HHF principal reduction program].” Using up allotted 

TARP funds by a 7-year deadline does not necessarily mean that HHF Florida is 

effective in addressing the “urgent” and “pressing” needs of Florida homeowners 

“as soon as possible” as the Administration and Treasury announced.

Unfortunately, for some homeowners HHF help may come too late. As the next 

section of this report describes, many Florida homeowners needed HHF 

assistance the most at the height of the crisis when Floridians were hit hardest.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 19

SIGTARP 16-001 October 6, 2015

Several Factors Contributed to Hardest Hit Fund 

Florida’s Slowness in Getting Assistance to 

Homeowners and Lack of Effectiveness During 

the Height of the Crisis When Florida 

Homeowners Needed it Most 

Hardest Hit Fund Florida was slow in getting assistance to homeowners and 

lacked effectiveness during the first years of the program, which was the height of 

the crisis, when Florida homeowners needed it most. 

Plagued by a Lack of Comprehensive Planning by Treasury, Which

Waited for Florida’s HFA To Get Large Servicers To Participate, the 

Hardest Hit Fund Florida was Slow To Reach Homeowners

Florida started 2010 with an 11.8% unemployment rate, but unemployed 

homeowners would have to wait more than one year before the statewide rollout 

of HHF Florida unemployment assistance.17 By then, Florida’s unemployment 

rate although still high at 10.1% had already started to improve. 

Figure 6: Florida’s Unemployment Rate (Seasonally Adjusted)

Source: SIGTARP analysis of Bureau of Labor Statistics data.

 17 See SIGTARP, “Factors Affecting Implementation of the Hardest Hit Fund Program,” April 12, 2012 Appendix I for 

Treasury’s calculation of unemployment for Florida, related to Treasury’s selection of Florida for the first round of 

HHF.

Unemployment Rate (Seasonally Adjusted)

Announcement of Florida's participation in the Hardest Hit Fund

Start date of the HHF Florida Unemployment Mortgage Assistance Program (Statewide)

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 20

SIGTARP 16-001 October 6, 2015

SIGTARP found that the same factors that contributed to the Hardest Hit Fund’s 

significant delay in assisting homeowners nationwide, applied to Florida, 

including a lack of comprehensive planning by Treasury that led to delay and 

limitation in participation in the program by large servicers and the Governmentsponsored enterprises (GSEs) (Fannie Mae and Freddie Mac).18 Florida’s HFA 

Director of Homeownership Programs told SIGTARP in 2011 that the primary 

challenge with implementing HHF Florida was the lack of big servicer 

participation.19 He told SIGTARP in 2011, “The one billion dollars has been a 

nice carrot to use for servicers in Florida, but there is no stick with the carrot to 

force servicers to participate,” and that if Treasury had a stick to use on servicers, 

they had not used it.20

SIGTARP found in its 2012 audit that Treasury’s delay in securing support from 

large servicers and the GSEs was a planning and execution error.21 Treasury’s 

HPO Chief Mark McArdle told SIGTARP that Treasury expected states to talk 

with servicers and find out what worked, and “we wanted to let that process work 

out.” Treasury knew that the process was not working and that as a result, HHF 

programs were not rolling out. Treasury’s HPO Chief told SIGTARP, “what 

servicers wanted to do, maybe states didn’t want to do, and what states want to 

do, servicers didn’t want to do.” Treasury HPO Chief McArdle told SIGTARP 

that servicers were coming to Treasury and saying that they could have maybe 

worked with one or two states, but now there were 19, “and so we knew we had to 

change the game.” He told SIGTARP: 

By the summer of 2010, as the program got larger, we intervened. 

And we held this summit, we said, “All right. You guys can still do 

your innovation, but let’s at least all agree on the template, though, for 

one basic program.” So that was a little different than how we 

operated before. We basically said, “All right. Can we all agree to do 

this?” And everyone did agree to do that. And that program started to 

gain significant traction.

HHF states did not gain traction on their own, and there was no traction until 

Treasury intervened to “change the game.” Treasury did not gain GSE support 

for HHF programs for eight months, until October 2010, and even then GSE 

guidance to servicers only supported unemployment or reinstatement programs.22

 18 See SIGTARP, “Factors Affecting Implementation of the Hardest Hit Fund Program,” April 12, 2012.

19 Florida’s HFA delayed its pilot launch to October 2010 because large servicers were not participating, and they only 

launched with one servicer. Florida’s HFA explained, “Without big servicers, it would take much, much longer to get 

the funds out, with just community banks and credit unions. It would be a trickle of eligible applicants. Without the 

big servicers, we would only be able to help about 50%” of the applicants the HFA had originally estimated. See 

SIGTARP, “Factors Affecting Implementation of the Hardest Hit Fund Program,” April 12, 2012, page 21. 20 See SIGTARP, “Factors Affecting Implementation of the Hardest Hit Fund Program,” April 12, 2012, page 19. 21 See SIGTARP, “Factors Affecting Implementation of the Hardest Hit Fund Program,” April 12, 2012, page 19. 22 These programs require no financial sacrifice from the servicers or investors. The GSEs did not support principal 

reduction. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 21

SIGTARP 16-001 October 6, 2015

A senior Florida HFA official told SIGTARP that there was no hint of big 

servicer participation until Fannie/Freddie put out guidance. Treasury’s 

intervention to “change the game” did not take away each state’s ability to tailor 

solutions to local problems, but instead made HHF more effective. In 2011, a 

Florida HFA senior officer told SIGTARP that Treasury’s servicer summit was 

the first big step and that FHFA, the GSEs, the big servicers, and the first 10 

states looked to Treasury “to instigate this improvement.” Florida’s HFA told 

SIGTARP that only after the summit did Fannie Mae and Freddie Mac issue the 

guidance directing servicers to accept HHF funds for their loans.

For the First Three Years (February 2010 – September 2013), There 

Was No Hardest Hit Fund Targeted Assistance to Underwater 

Homeowners in Florida

SIGTARP found that despite choosing Florida as one of the first HHF states 

because it had the third highest home price decline in the nation at 37.4%, the 

Hardest Hit Fund in Florida suffered from a lack of comprehensive planning by 

Treasury to provide assistance to underwater homeowners hit hard by home price 

declines (those with negative equity) during the first three years when home price 

declines were at their highest.23

Figure 7: Florida’s Average Home Prices During the Financial Crisis

Source: SIGTARP analysis of FHFA, House Price Index Datasets, accessed August 7, 2015. 

 23 Treasury’s concerns over high home price declines and unemployment in Florida were so great, that it would select 

Florida in three of four HHF rounds. 

Average Home Price (Seasonally Adjusted)

Announcement of Florida's participation in the Hardest Hit Fund

Start Date of the HHF Florida Principal Reduction Program (Statewide)

 $-

 $50,000

 $100,000

 $150,000

 $200,000

 $250,000

 $300,000

 $350,000
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 22

SIGTARP 16-001 October 6, 2015

Treasury did not take action to ensure that HHF Florida was effective in targeting 

underwater homeowners until November 2012, when Treasury intervened to 

change the game.24 There was no HHF Florida program targeted to underwater 

homes for the first three years (February 2010 – September 2013). In fact, 

Treasury allowed HHF Florida’s only programs to deem ineligible any 

unemployed/underemployed homeowner who was significantly underwater (loan 

to value ratio exceeding 200%). Rather than propose and pressure Florida’s HFA 

to start a program targeting underwater homeowners, Treasury left it to Florida’s 

HFA, acting deferential, and only taking action in reaction to a state HFA’s 

request.25 SIGTARP issued its April 2012 report that called into question whether 

HHF would be able to reach underwater homeowners given the fact that 98% of 

the assistance provided to homeowners was for unemployment or reinstatement of 

past-due amounts. After SIGTARP’s report, Treasury proposed and pressured 

Florida’s HFA to start a program for underwater homeowners. Treasury’s 

approach of leaving the effectiveness of HHF Florida to Florida’s HFA was a lost 

opportunity for HHF to help homeowners facing declining home values at the 

worst time. By September 2013, when HHF Florida started principal reduction, 

home values had already increased by more than 22% from second quarter 2011 

lows.

For the First Two Years, Nearly Half of All Who Completed an 

Application for the Hardest Hit Fund in Florida Were Denied as 

Ineligible

SIGTARP found that the first two years of HHF Florida were plagued by the fact 

that nearly half (45%) of homeowners who applied were denied because they fell 

outside eligibility requirements. According to HHF Florida’s data, of the 27,541 

Florida homeowners who were able to complete their HHF applications by 

April 1, 2012, Florida’s HFA denied nearly half (45%) as ineligible. Although 

Treasury does not require HHF states to report on the reasons homeowners were 

denied, Florida’s HFA compiled information on the denial reasons as of April 1, 

2012, in advance of an April 27, 2012 Florida HFA board meeting. According to 

this Florida HFA data as of April 1, 2012, the most common reasons why 

Florida’s HFA turned 12,516 homeowners down as ineligible were as follows: 

 24 A senior Florida HFA official told SIGTARP in 2011 that Treasury told the states to tailor HHF to their state 

circumstances to best address foreclosures. Treasury’s directive was for these states to develop innovative housing 

programs tailored to their local conditions to help prevent foreclosures and stabilize housing markets. Treasury 

approved HHF for five categories of assistance: (1) principal reduction; (2) second-lien reduction of payoff; (3) 

reinstatement through payment of past-due amounts; or (4) unemployment/underemployment assistance; or (5) 

transition assistance such as a short-sale (when the home is sold for less that the mortgage loan balance), deed-in-lieu 

of foreclosure (where the homeowner transfers ownership to the lender or investor), or relocation assistance. Each 

state HFA could offer multiple programs under HHF, with Treasury approval. 25 Treasury knew that principal reduction was difficult at that time because the GSEs did not support it. Former Treasury 

HPO Chief told SIGTARP that principal reduction is difficult and Treasury encouraged individual HFAs to work on 

principal reduction within servicers’ non-GSE book. Given the problems that individual states had already had with 

the large servicers, it should have been apparent to Treasury that states would have a hard time gaining traction on 

their own and would need Treasury’s intervention.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 23

SIGTARP 16-001 October 6, 2015

TABLE 2

REASONS FOR INELIGIBILITY OF FLORIDA HHF APPLICANTS

Ineligibility Reason

Number of 

Homeowners 

Denied

Does not have a qualifying hardship (unemployment or 

underemployment) that is no fault of their own 3,944

First mortgage is more than 180 days past-due 2,929

Homeowner cancelled application 2,704

Monthly housing expenses including first mortgage 

plus taxes, insurance, and HOA dues less than 31% 

gross monthly income

2,157

Did not obtain mortgage loan on or before 1/1/09 1,641

Combined loan to value exceeds 200% 1,072

Home is a condo and is not on the Fannie Mae/FHA 

approved list 821

Source: Florida HFA Board of Directors data as of April 1, 2012.

Treasury did not do all that it could to stop HHF Florida’s high rates of denying 

homeowners. Treasury did not set a target denial rate for HHF Florida, or require 

that HHF states report publicly on denial reasons and the number of homeowners 

denied for each reason. Treasury’s HPO Chief McArdle told SIGTARP that 

Treasury asked Florida about their high rejection rate, and in 2011, focused on the 

“pull through rate” – the number of applications funded compared with 

withdrawn or denied. He told SIGTARP that Treasury looked very closely at the 

reasons why homeowners were denied in Florida. He explained that part of the 

rejection reason was that HHF Florida had a rule that a homeowner could not be 

more than some number of months in arrear which rejected a large number of 

borrowers. HPO Chief McArdle explained that because Florida has a long 

foreclosure timeline, there were an abnormal number of people in that bucket. 

Treasury’s HPO Chief McArdle told SIGTARP, “as long as they have – state a 

justification, you know, we’re trying to basically help people who can still be 

helped.”

Treasury could have taken action to propose or pressure Florida’s HFA to remove 

the second largest eligibility requirement leading to denials that a homeowner 

could not be more than 180 days delinquent. As of April 1, 2012, a total of 2,929 

Florida homeowners had been denied based on that reason. After SIGTARP 

released its April 12, 2012 report, Florida’s HFA board voted two weeks later, on 

April 27, 2012, to eliminated that requirement, and allow those denied to be 

reconsidered. This would cause a backlog of application reviews, and some 

homeowners may not have had the luxury of time.

After SIGTARP’s report, Florida’s HFA removed other eligibility requirements, 

including that the mortgage had to be originated prior to January 1, 2009, a loanto-value ratio could not exceed 200%, and that a condo had to be on a Fannie 

Mae- or FHA-approved list. These eligibility requirements accounted for half 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 24

SIGTARP 16-001 October 6, 2015

(6,463 homeowners) of all 12,516 homeowners who had been previously denied. 

HHF Florida’s effectiveness to reach additional homeowners improved.26 

Still, however, HHF Florida’s homeowner denial rates reported for the years 

ended March 31, 2013 and 2014 were 38%, much higher than the national 

average.

Treasury Allowed Florida To Decrease the Duration of HHF 

Unemployment from 18 Months to 6 Months Despite Treasury 

Knowing that Unemployment was 27 Weeks or Longer, and that 

Treasury Allowed Extended Unemployment Assistance in HAMP 

The effectiveness of HHF assistance to unemployed and underemployed Florida 

homeowners suffered early on due to a lack of comprehensive planning by 

Treasury to ensure that the assistance lasted long enough for a homeowner to 

become reemployed at a level where they could afford to pay their mortgage, as 

stated in Treasury’s term sheet for HHF Florida. Initially homeowners could 

receive 18 months of unemployment assistance based on the average number of 

months that individuals received unemployment benefits. Around December

2010, Treasury allowed Florida’s HFA to drop the length of assistance to 

six months, effective March 2011.

Treasury should have identified the risk that six months would be too short a time 

for Florida homeowners to regain employment at an income where they could 

afford to pay their mortgage. SIGTARP identified this risk for HAMP on 

April 20, 2010, recommending that Treasury extend the duration of its 

unemployment program in HAMP stating:

One prominent feature of this recession is an unusually high degree of 

long-term unemployment. According to the Bureau of Labor 

Statistics....nearly 43% of unemployed workers have been out of work 

for 27 weeks, a length of time longer than the six-month contemplated 

maximum for unemployment assistance....large numbers of 

unemployed homeowners may still be unemployed at the end of the 

forbearance period....For the fortunate who quickly find jobs, the 

program [HAMP’s UP] may be an important lifeline. But for the rest, 

the forbearance time period will end before a job is found, their unpaid 

amount will still be owed, and they will still face an unaffordable 

mortgage with a principal balance that has been made higher by the 

 26 SIGTARP found that the first two years of HHF in Florida were plagued by high numbers of homeowners with 

incomplete applications. As of April 1, 2012, two years after the program’s announcement, 41,406 Florida 

homeowners had applied for HHF, but one-third of them (13,865) had incomplete applications – defined as 

applications that homeowners have begun to fill out, but are not yet completed. A completed application was one 

where the homeowner had finished filling out an online application even if required documentation supporting the 

application had not necessarily been provided. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 25

SIGTARP 16-001 October 6, 2015

unpaid interest amounts during the forbearance period, potentially 

eliminating equity for some and plunging others even deeper 

underwater. In light of this reality, Treasury should consider 

implementing a program with a longer minimum term and that will 

have a broader impact. Although no program will assist all 

unemployed borrowers, Treasury should strive for a program that will 

at least assist the typical unemployed borrower.

In May 2010, Treasury sent a letter to SIGTARP citing to the Bureau of Labor 

Statistics data showing unemployment of 27 weeks or longer, and saying that 

Treasury gives servicers the discretion to extend the forbearance beyond 3 months 

with no set limit.27 Months later, Treasury allowed HHF Florida to decrease the 

length of assistance from 18 months to 6 months.28

Treasury knew that six months was the shortest duration of unemployment 

assistance provided in HHF at that time. 

 27 In July 2011, Treasury formally adopted a SIGTARP recommendation and extended the minimum forbearance to 

12 months. 28 See Letter from Treasury to SIGTARP, May 20, 2010, republished in SIGTARP, Quarterly Report to Congress, 

Appendix G, July 21, 2010. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 26

SIGTARP 16-001 October 6, 2015

Figure 8: Maximum Duration of HHF Unemployment Assistance by State as of 3/31/2011

Source: SIGTARP analysis of various Hardest Hit Fund program amendments from individual states, which can be 

obtained from the Treasury Department’s Hardest Hit Fund - Archived Program Information website at 

http://www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/hhf/Pages/Archivalinformation.aspx?Program=Hardest+Hit+Fund, accessed 8/11/2015).

Note 1: The maximum duration of HHF unemployment assistance provided by Rhode Island was not capped at a 

number of months, but rather however long it took the homeowner to go through the $6,000 of assistance the program 

provided. 

Note 2: Several states only provided the maximum benefit period to homeowners in highly distressed counties, or to 

homeowners who participated in qualifying job training or education programs.

Rather than ensure that HHF Florida’s unemployment assistance would be long 

enough to be effective – “for homeowners to become re-employed at a salary that 

is sufficient for them to either resume making full mortgage payments or qualify 

for a mortgage modification” – as Treasury’s term sheet stated, Treasury adopted 

a deferential position to the state HFA despite Treasury’s knowledge. Treasury 

HPO Chief Mark McArdle told SIGTARP that Florida HFA did not ask Treasury 

for guidance on this change. He said that Treasury did as it always did, ask for 

the rationale and reason, and Florida HFA’s reason was that lowering the 

assistance would help the money go farther to help more people. Treasury’s HPO 

Chief McArdle told SIGTARP, “Now, this is totally something the state can

decide.” He said that Treasury leaves it to the states that are closer to the situation 

to decide, and the state did have a stated rationale.

Treasury would again miss an opportunity 10 months later, in October 2011, 

when it approved California and Nevada to extend (9 months for California, 

12 months for Nevada). This left HHF Florida with the shortest duration;

however, Treasury took no action. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 27

SIGTARP 16-001 October 6, 2015

The deference Treasury gave to Florida’s HFA in leaving it to the state had 

serious consequences. After SIGTARP’s 2012 report, Florida’s HFA found, “the 

six-month duration of this program is not sufficient time for homeowners to 

achieve a successful outcome.”29 In April 2012, Florida HFA reported that only 

11% (208) of 1,904 Florida homeowners who received and exited HHF 

unemployment assistance regained employment at a level that made their 

mortgage affordable. This brings into question whether the remaining 89% of 

Florida homeowners who exited the program continue to struggle to find 

employment at an income where they could afford their mortgage.

 29 HHF in Florida also provided $6,000 in HHF to reinstate past-due mortgages for homeowners who found employment. 

However, typically those same homeowners had also been in the unemployment program and were considered 

delinquent by their mortgage servicer while in that program, leading to arrearages over $6,000. It was not until April 

2012 when Florida’s HFA internally stated that the $6,000 cap was often quite insufficient to bring the loan current 

and suggested increasing the HHF funds from $6,000 to $25,000.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 28

SIGTARP 16-001 October 6, 2015

Treasury Took Some Strong Oversight Action in 

Response to SIGTARP’s 2012 Report and 

Recommendations To Hold Treasury and the 

Florida Housing Finance Agency Accountable 

and Make HHF Florida More Effective

Two weeks after SIGTARP’s report, on April 27, 2012, the board governing 

Florida’s HFA voted to make changes:30

• Eliminate certain eligibility requirements.

• Loosen income requirements.

31

• Reconsider homeowners previously denied.

• Increase unemployment assistance to 12 months (capped at $24,000). HHF 

Florida made the change retroactive to convert those already getting that 

assistance. As explained by Treasury’s HPO Chief McArdle, “that totally 

froze up their operations.”

• Increase up to $18,000 HHF payment to reinstate a delinquent mortgage (total 

assistance capped at $42,000).

• Increase up to $25,000 in HHF funds as a one-time payment to bring current a 

past-due mortgage for homeowners who returned to work or recovered from 

underemployment.

32

Following SIGTARP’s report, Treasury increased oversight of HHF by both: 

(1) Treasury’s program and policy group and (2) Treasury’s compliance group. 

On June 14, 2012, Treasury released the results of its on-site compliance review 

at Florida’s HFA looking at 75 loan files.

• Treasury found that Florida’s HFA lacked documented processes or adequate 

controls to monitor the advisor agencies to ensure program requirements were 

being met. Treasury stated, “Without a regular review of approved and denied 

loans, the HHF cannot assess the accuracy and effectiveness of these 

processes.”

• Treasury found that Florida’s HFA did not have a clear definition of what 

qualified as substantial underemployment (the required level for HHF 

assistance).

• Treasury found insufficient documentation to support the calculation of 

income, calculation of loan-to-value ratio, or reason for denial. 

 30 The changes were announced on June 27, 2012, after Treasury’s approval. 31 Florida HFA’s board also changed threshold income from limiting it to homeowners with housing expenses less than 

31% gross monthly income to require that there be at least a 10% reduction in income for a hardship. 32 On May 30, 2012, Florida’s HFA decreased its estimates from helping 53,000 homeowners in each of its HHF 

unemployment and reinstatement programs to helping 45,000 homeowners in each program. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 29

SIGTARP 16-001 October 6, 2015

In November 2012, the State of Florida Auditor General issued a report to 

Florida’s HFA, which found that improved monitoring of the advisor agencies’ 

eligibility determination processes was needed. Florida’s Auditor General stated 

that absent effective monitoring, advisor procedure weaknesses and instances of 

noncompliance with contractual requirements may escape timely detection.

Following SIGTARP’s report, in November 2012, Treasury’s program and policy 

group took strong oversight action to hold itself and Florida’s HFA accountable 

for HHF Florida performance. Treasury’s HPO Chief told SIGTARP that 

Treasury realized that HHF Florida was not looking that good at the end of 2011, 

and told Florida’s HFA, “Maybe it’s time you think about lengthening assistance, 

widening the net a bit.” On November 20, 2012, Treasury issued an Action 

Memorandum to Florida’s HFA targeting:

(1) Florida’s low number of homeowners assisted, which averaged 375

homeowners per month.

(2) Florida’s low ratio of approved homeowners to denied homeowners.

33

(3) Florida’s inadequate staffing levels.

34

(4) Florida’s focus on unemployment and reinstatement, with no program to 

address negative equity or long-term affordability issues.

By taking strong action, Treasury was able to bring effective change to HHF in 

Florida to start providing HHF assistance to underwater homeowners. Treasury 

would change their deferential approach to one of putting pressure on Florida’s 

HFA including telling Florida HFA that they had no HHF assistance to address 

negative equity or long-term affordability issues. Treasury’s HPO Chief McArdle 

explained to SIGTARP that Treasury “gave them pressure over time saying, you 

know, perhaps you should consider changes to your program because you’re 

not—you weren’t—one of the things we asked about was the sustainability of 

assistance.” He said that Florida’s HFA did come up with changes eventually. 

In its Action Memorandum, Treasury asked Florida for a written plan and set a 

minimum benchmark for Florida’s HFA to meet a goal of an average 750 funded 

homeowners a month with action steps to achieve that goal. Treasury warned, “If 

Florida Housing fails to achieve these goals, Treasury will consider additional 

steps, including possible remedial actions, to improve performance.” Treasury 

ended by stating that “Florida still faces elevated unemployment, high 

 33 Treasury found that during the third quarter of 2012, Florida’s HFA had assisted 833 borrowers and had a pull through 

rate of 26.3%. The pull through rate is essentially the ratio of approved homeowners to denied homeowners. 

Treasury told Florida’s HFA that they “must achieve a combination of high volumes and a higher ratio of approved 

homeowners to denied homeowners.” 34 Treasury expressed concern over Florida’s HFA’s staffing level noting that on average other HHF states had one 

position for every $9 million allocated, but in Florida it was one position for every $31 million, almost double the next 

highest allocation amount per position.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 30

SIGTARP 16-001 October 6, 2015

delinquency rates, and oppressive negative equity...” and “It is urgent that 

[Florida’s HFA] take steps now to increase volume while the need is still critical.”

Improvements After Treasury Intervened To Take a Stronger Role 

Following SIGTARP’s 2012 Report Prove that Stronger and More 

Proactive Treasury Action in HHF Leads to Stronger HHF 

Performance

Treasury’s prior lack of action to demand accountability and ensure the 

effectiveness of HHF did not work for HHF Florida. Treasury’s HHF Program 

Director told SIGTARP that states get to design HHF programs and have the 

flexibility to roll it out and implement it, and if it’s not working the states tweak 

it, and Treasury’s role is to support the states, and ask questions and offer advice.

However, improvements did not come until after SIGTARP’s report when 

Treasury issued Florida the Action Memorandum. Treasury’s HHF Program 

Director told SIGTARP that Treasury issued the Action Memorandum to Florida 

to say, “We’re concerned about your performance. Here are some steps we’d like 

you to take, or we’d like you to respond to this memo with a proposed action plan 

or steps that you’re going to take.”35

Treasury officials describe the action they took with HHF Florida as “pressure” or 

“pushing.” Treasury’s HPO Chief McArdle told SIGTARP that Florida “made 

dramatic changes, under pressure.” Treasury’s strong action in 2012 brought 

improvements that show the benefit of Treasury conducting oversight to ensure 

HHF Florida is effective including:

• HHF Florida increased the number of homeowners receiving assistance, 

although it did not meet Treasury’s targeted goal of helping 750 homeowners 

per month, and Treasury did not ensure that HHF Florida met this metric.

• There are now two HHF programs in Florida to address underwater homes 

and long-term affordability.

• Treasury started a principal reduction program for current homeowners with 

underwater homes. Treasury HPO Chief McArdle explained, “Within a week 

they filled 25,000 slots. So what we pushed them to do was just that, and 

they’ve done it.” HPO Chief McArdle told SIGTARP that “Florida 

had...current borrowers who were underwater who did the right thing and 

paid their mortgage. They designed a program to address that population that 

had tremendous demand.” 

• Treasury required Florida HFA to recast the mortgage after the principal 

reduction that would result in a reduction in the mortgage payment.

• Treasury was “instrumental” in bringing Ginnie Mae to the table to discuss 

recasting the mortgages, according to Florida HFA. 

 35 The only time Treasury issued a formal directive was to three other states (Arizona, Georgia, and New Jersey) around 

the time of SIGTARP’s audit in 2012. Treasury’s HHF Program Director told SIGTARP that Treasury has not issued 

a formal directive since the end of 2012.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 31

SIGTARP 16-001 October 6, 2015

Treasury publicly heralded the improvements in its March 2013 “TARP: Four 

Year Retrospective Report,” stating, “As a result of recent program and 

operational changes made by state housing finance agencies working closely with 

Treasury, OFS expects the pace of assistance to accelerate throughout 2013.”
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 32

SIGTARP 16-001 October 6, 2015

Despite Improvements Made in 2013, HHF 

Florida Continues To Lag Behind Other HHF 

States in Effectiveness

Although there were improvements after Treasury intervened, HHF Florida 

continued to lag behind other HHF states in effectiveness. SIGTARP found 

several factors that contributed to this lag.

Implementation Issues Delayed HHF Florida Principal Reduction 

Assistance and Caused a Backlog

HHF Florida struggled with implementation issues that delayed homeowners from 

getting principal reduction assistance. The only way to apply for this assistance is 

through the web-based online application. Within the first week there was a flood 

of applications. Florida’s HFA stopped accepting applications that week, after the 

first 25,000. It would take eight months for Florida HFA to clear the backlog of 

applications. Florida HFA did not reopen their system to accept applications 

again until May 2014.

According to Treasury’s guidelines, Treasury intended to be involved in 

identifying and mitigating obstacles to program effectiveness, but Treasury did 

not do that here. Given that Florida was one of the states hit hardest by 

underwater homes during the crisis, and that this was the first HHF Florida 

program to target underwater homes, Treasury and Florida’s HFA should have 

engaged in critical thinking to anticipate a flood of applications, and determine 

any obstacles in Florida’s HFA being able to address them. Those obstacles could 

have been mitigated with additional staff. That type of comprehensive planning 

did not happen, despite Treasury’s intention to identify and mitigate obstacles 

when it designed HHF.

When the program reopened, it had helped only 1,756 homeowners. A senior 

Florida HFA official told SIGTARP that there were issues with application 

withdrawals and incomplete applications. Treasury’s HHF Program Director told 

SIGTARP that there were lots of applications from lots of people who were not 

eligible for the program, and so the approval rate is commensurately low.36 As of 

December 31, 2013, Florida HFA estimated that the program would help 10,000 

Florida homeowners. The Executive Director of Florida’s HFA was quoted in the 

press that, “at the end of March, it became clear to us that given the folks who had 

been denied and those who reserved a spot but had no other activity, we would 

not be able to spend the $350 million.”

 36 To be eligible, a homeowner must be underwater (defined as owing 125 percent or more in mortgage debt compared to 

the current value of the home), the homeowner must owe less than $350,000 in outstanding home debt, and must earn 

a household income that is below 140% of the area median. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 33

SIGTARP 16-001 October 6, 2015

Florida HFA’s decision to stop accepting applications after the first 25,000 could 

have had serious consequences to homeowners who may have been eligible but 

were kept from applying, and therefore, could not tell their mortgage servicer that 

they had applied for HHF assistance. A senior Florida HFA official told 

SIGTARP for homeowners who are in the HHF underwriting process, that 

Florida’s HFA communicates with servicers and judges to explain that certain 

homeowners are potentially eligible for HHF assistance to stop foreclosures. That 

official explained to SIGTARP that whether the foreclosure process stops depends 

on the judge and the servicer, but that some servicers may delay foreclosure. That 

official told SIGTARP that Treasury does not require HFAs to report on issues 

related to foreclosures. Treasury’s HHF Program Director addressed dual 

tracking with SIGTARP, saying “Oftentimes, servicers receiving funds through 

the Hardest Hit Fund’s side of their organization, those folks may not be fully 

communicating with the legal foreclosure side of the organization. This has been 

well documented across the board since loss mitigation programs have been in 

place.” Dual tracking is something that Treasury must monitor in HHF. 

However, a homeowner who does not have a chance to even apply to a program 

potentially can be single tracked to foreclosure.

With such a great demand, HHF Florida principal reduction can address a great 

need for Florida homeowners with underwater homes, but only if it operates 

effectively. Nearly 5,000 Florida homeowners have already received assistance.

TABLE 3

PERFORMANCE OF HHF FLORIDA’S PRINCIPAL REDUCTION PROGRAM

Quarter Ended

Homeowners 

Assisted During 

the Quarter

Cumulative 

Homeowners 

Assisted Through 

the Quarter

December 31, 2013 394 394

March 31, 2014 1,362 1,756

June 30, 2014 995 2,751

September 30, 2014 1,048 3,799

December 31, 2014 709 4,508

March 31, 2015 461 4,969

Source: SIGTARP analysis of Treasury’s Quarterly Performance Report data for HHF Florida’s Principal Reduction Program.

However, according to Treasury data as of March 31, 2015, only 14% of 

homeowners who apply for HHF Florida principal reduction have received 

assistance, and more than one-third of homeowners have been denied.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 34

SIGTARP 16-001 October 6, 2015

Figure 9: HHF Florida Principal Reduction Program – Cumulative Approval and 

Denial Rates as a Percent of Applications 

Source: SIGTARP analysis of Treasury’s Quarterly Performance Report data for Florida’s HHF Principal 

Reduction Program.

The need for assistance for underwater homeowners is so great an issue in Florida 

that Treasury should be actively engaged each quarter, and not wait to take action 

to ensure that HHF Florida operates in the most effective manner. Already, fewer 

homeowners have received assistance in the last two quarters compared to prior 

quarters. Further, it is taking longer for Florida homeowners to get help from this 

program than it did in the past. According to Treasury’s March 31, 2015 data, 

this past quarter showed that it took a median of 210 days for a homeowner to get 

this assistance, longer than the median of 154 days in the year and a half since the 

program started.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 35

SIGTARP 16-001 October 6, 2015

Figure 10: Florida Homeowners Receiving HHF Principal Reduction Assistance by 

Quarter and Cumulative

Source: SIGTARP analysis of Treasury Quarterly Performance Report data for Florida’s HHF Principal 

Reduction Program.

Treasury has set no goals for this program other than to spend $350 million in 

TARP funds. Given that it took so long for HHF Florida to have a program that 

targeted underwater homeowners, there is no time for Treasury to wait to ensure 

that this assistance is effective. 

The HHF Program for Senior Citizens Has Struggled in Part 

Because Seniors Had Difficulty Applying and Providing Necessary

Documentation

SIGTARP also found that Florida lags behind other states because both Treasury 

and Florida’s HFA lacked comprehensive planning to identify and mitigate 

obstacles that Florida seniors with reverse mortgages facing problems applying to 

the program and providing necessary documentation. Beginning in November 

2013, this $25-million HHF program helps Florida seniors with reverse mortgages 

and limited means who have suffered a hardship, avoid foreclosure due to their 

inability to pay taxes, insurance, or homeowners association fees.37 Estimated to 

 37 To be eligible, the senior must have liquid assets under $48,000 and a household income no more than 140% of the 

area median income.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 36

SIGTARP 16-001 October 6, 2015

help 2,500 seniors, the program was slow to get help to seniors, a population that 

does not have the benefit of time.

Figure 11: Quarterly Performance of HHF Florida’s ELMORE Program 

Source: SIGTARP analysis of Treasury’s Quarterly Performance Report data for Florida HHF ELMORE 

program.

There have been two obstacles to seniors getting help from this HHF program, 

first that seniors had difficulty applying, and second that elderly applicants were 

not providing the required documentation. Treasury’s HHF Program Director 

told SIGTARP that Treasury asked Florida’s HFA about the number of 

applications and the number of homeowners approved and whether there were 

operational challenges. Florida’s HFA told Treasury that they were having issues 

trying to reach seniors who are not sophisticated in applying and submitting 

documents online. 

The obstacles that senior citizens were having trouble applying and submitting 

required documents may be one explanation to Treasury’s data showing that 46% 

had their application withdrawn. However, Treasury should not assume, but 

instead dig into this number to understand it better and gain insight for 

improvement.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 37

SIGTARP 16-001 October 6, 2015

Figure 12: Status of Florida Seniors’ HHF Applications 

Source: SIGTARP analysis of Treasury’s Quarterly Performance Report data as of March 31, 2015.

Note: Percentages do not total 100% due to rounding.

The obstacles senior citizens faced could have been identified earlier through 

comprehensive planning by Treasury and Florida’s HFA before rolling out the 

program. According to Treasury’s guidelines issued to the HHF states at the start 

of the program, Treasury intended to be involved in identifying and mitigating 

obstacles to program effectiveness, but Treasury did not do that here until later. 

Treasury’s later intervention helped mitigate this obstacle, but for some 

homeowners it may have come too late. Treasury asked Florida’s HFA to 

streamline their underwriting guidelines to what was necessary, which Florida’s 

HFA did. Florida’s HFA also began working with a state agency on aging to help 

seniors submit applications and required documents. Now the Department of 

Elder Affairs can go into the home of a senior citizen and help them gather the 

documents. This type of action by Treasury to bring about change shows how 

powerful the Hardest Hit Fund can be if Treasury requests improvement. 

Treasury’s action has brought some improvement, and the program has helped 

550 seniors (still only 22% of those estimated to be helped). Seniors apply by 

calling a toll-free phone number where a live person can advise and assist them, 

and staff from the Area Agencies on Aging may assist seniors with gathering and 

submitting documents.

38 A senior Florida HFA official told SIGTARP that even 

with the applications being taken by telephone instead of requiring an online

application, the biggest delay is being able to obtain the proper documentation.

 38 According to Florida’s HFA website, the only way to apply for the Florida ELMORE program is to use the toll-free 

ELMORE Application and Information Line at 1-(800) 601-3534 to speak to a certified ELMORE advisor. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 38

SIGTARP 16-001 October 6, 2015

TABLE 4

PERFORMANCE OF HHF FLORIDA’S ELDERLY MORTGAGE ASSISTANCE 

PROGRAM

Quarter Ended

Seniors 

Provided 

Assistance 

- During 

the Quarter

Seniors 

Provided 

Assistance -

Cumulative

Days to 

Obtain 

Approval 

(Median)

Progress 

Toward 

Program Goal

December 31, 2013 1 1 36 0%

March 31, 2014 34 35 88 1%

June 30, 2014 126 161 134 6%

September 30, 2014 127 288 199 12%

December 31, 2014 113 401 296 16%

March 31, 2015 149 550 280 22%

Source: SIGTARP analysis of Treasury’s Quarterly Performance Report data for HHF Florida’s Elderly Mortgage Assistance Program.

Note: The Days to Obtain Approval column represents median days for the quarter.

Treasury has no goal for the length of time Florida’s HFA takes to process an 

application. Florida’s HFA should view a targeted length of time to process an 

application not as an excuse to deny a homeowner, but instead as a target for their 

own improvement in helping homeowners make it through the approval process. 

With a median 280 days to obtain approval for this HHF assistance, Treasury will 

need to be actively involved to ensure that the program is moving as fast as it can 

to get help to Florida seniors who need the money now, not in 9 to 10 months. 

The HHF Florida Two-year Pilot To Buy and Modify Pools of 

Mortgages Has Not Been Effective

SIGTARP found that Florida lags behind other HHF states in part because both 

Treasury and Florida’s HFA lacked comprehensive planning in a program for a 

non-profit to buy mortgages on underwater homes and HHF to pay funds to

modify those mortgages to identify the obstacle that the non-profit might not be 

the successful bidder at HUD sales. Started in April 2013, two years later, 

Treasury still refers to this program as a pilot program. Treasury approved 

Florida to use $50 million in TARP funds to modify mortgages of 1,500 Florida 

homeowners whose loans are part of a pool of loans purchased by a non-profit 

based in New Jersey named National Community Capital (“NCC”) at a HUDsponsored distressed sale. NCC would write down the principal balance to 115% 

of the current value of the home, and HHF would provide the homeowner with up 

to $50,000 to reduce the principal balance to 100% of the current value of the 

home. Treasury’s term sheet with Florida’s HFA estimated that the HHF money 

would be spent over two years. However, after two years, the program still 

remains in its pilot phase and has helped only 92 homeowners in two years – 6% 

of the 1,500 homeowners estimated to be helped. Florida’s HFA told SIGTARP 

that this is because NCC is not the successful bidder at the HUD-sponsored sales.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 39

SIGTARP 16-001 October 6, 2015

TABLE 5

PERFORMANCE OF HHF FLORIDA'S MODIFICATION ENABLING PILOT PROGRAM

Quarter Ended

Homeowners 

Assisted 

During the 

Quarter

Homeowners 

Assisted -

Cumulative

Progress 

Toward 

Program Goal

December 31, 2013 1 1 0%

March 31, 2014 7 8 1%

June 30, 2014 4 12 1%

September 30, 2014 19 31 2%

December 31, 2014 40 71 5%

March 31, 2015 21 92 6%

Source: SIGTARP analysis of Treasury’s Quarterly Performance Report data for HHF Florida’s Modification Enabling Pilot Program.

Treasury’s HHF Program Director said Treasury asked Florida’s HFA for insight.

Treasury’s HHF Program Director told SIGTARP that there may be a viable 

reason why Florida wants to continue to have a $50-million allocation ready for 

that program. HHF Program Director told SIGTARP that it takes time to engage 

borrowers, that this program has a very long tail. She told SIGTARP that 

Treasury is not at a point where they are going to say “shut it down” because they 

understand the lag. She told SIGTARP that the state has a tremendous amount of 

latitude to design and fund their own programs and elect how they wish to operate 

those programs, and if Florida feels that they’ve got a viable pipeline, “we have to 

give them a certain amount of latitude to manage that program, and we’ll continue 

to ask them questions so that we can evaluate the efficacy of that particular 

program.”

However, Treasury has not set any goals or measurable metrics to measure 

whether this program is progressing effectively. Treasury’s lack of goals, and 

lack of any action to bring accountability for this program to be effective, does 

not come without consequence. The money for this program came directly from 

existing HHF unemployment assistance programs.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 40

SIGTARP 16-001 October 6, 2015

Treasury Must Ensure that the New Homebuyer HHF Program 

Progresses Effectively and Make Timely Changes To Ensure 

Effectiveness

In April 2015, for the first time in the history of HHF, Treasury approved a HHF 

program not for homeowners, but for new homebuyers. Treasury had previously 

rejected a HHF Florida homebuyer assistance program in 2010. Treasury’s HPO 

Chief McArdle told SIGTARP in 2013, that Treasury rejected that program 

because it did not avoid a foreclosure to keep someone in their home, but instead 

was assisting other people to buy foreclosed homes, and that under EESA (the law 

governing TARP), it had to be before the foreclosure occurred or preventing a 

foreclosure somehow generally. Treasury is now allowing TARP funds to go to a 

first time homebuyer program, which is similar to a program that Florida’s HFA 

was already participating in outside of TARP. The new HHF program would 

provide up to $15,000 to qualified homebuyers to pay down payments and closing 

costs. Initially, this program is only open to buy homes located in five counties: 

Brevard, Duval, Hillsborough, Orange, and Volusia.39 Treasury must set goals 

for this program now, and set measurable targets that could be measured over 

time to ensure that this program is effective.

HHF Florida Has Vulnerabilities to Fraud That Treasury Should 

Strengthen

Although the Dodd-Frank Act precludes anyone convicted of a mortgage-related 

or real estate-related crime within the last 10 years from receiving HHF funds,

Treasury is not doing enough to ensure that HHF complies with the Dodd-Frank 

Act.40 Rather than conduct due diligence to ensure compliance with the DoddFrank Act, Treasury has shifted the burden to the homeowner to self-report in an 

affidavit affirming no mortgage fraud conviction within the past 10 years. 

The Dodd-Frank Act precludes HHF assistance for persons convicted of 

mortgage-related crimes, not persons who say they were convicted of those 

crimes. It is not the homeowner’s duty to comply with the Dodd-Frank Act, it is 

Treasury’s duty. However, SIGTARP found that neither Treasury nor Florida 

does any due diligence to determine whether a homeowner applying for the 

 39 Despite being labeled a first time home buyer program, a homeowner might be eligible even if they are not a first time 

homebuyer if they are a qualified veteran or are purchasing a home in a federally designated target area. 40 Subtitle G, Section 1481(d)(1) of the Dodd Frank Wall Street Reform and Consumer Protection Act reads, “No person 

shall be eligible to begin receiving assistance from the Making Home Affordable Program authorized under the 

Emergency Economic Stabilization Act of 2008 (12 U.S.C. 5201 et seq.), or any other mortgage assistance program 

authorized or funded by that Act, on or after 60 days after the date of the enactment of this Act, if such person, in 

connection with a mortgage or real estate transaction, has been convicted, within the last 10 years, of any one of the 

following: (A) Felony larceny, theft, fraud, or forgery. (B) Money laundering. (C) Tax evasion.” 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 41

SIGTARP 16-001 October 6, 2015

Hardest Hit Fund has been convicted of a mortgage-related crime in the last 

10 years, instead, relying entirely on homeowner self-reporting.41

The language in the self-certification makes clear that a Treasury background 

check is routine. The HHF self-certification statement says, “Treasury, or their 

agents may investigate the accuracy of my statements by performing routine 

background checks, including automated searches of federal, state and county 

databases, to confirm that I/we have not been convicted of such crimes.” 

However, Treasury does not check, or require Florida’s HFA to check, any 

database to see if a homeowner has been convicted of a mortgage-related crime. 

Self-certifications serve an important function to deter fraud, and provide a law 

enforcement remedy where fraud is found, but they are not on their own sufficient 

to protect a TARP program from being vulnerable to fraud. Given SIGTARP’s 

law enforcement authority, SIGTARP will criminally investigate anyone we find 

who lies on a certification for a TARP program. Unfortunately however, if 

discovered at all, the misrepresentation may not be found until after the applicant 

has received and spent the funds. The TARP funds paid to homeowners under 

HHF Florida are thousands of dollars. Recovery of TARP funds lost to fraud is 

not easy, and may not be successful if the person no longer has assets. 

More should be done up front by Treasury and state HFAs to prevent the funds 

from being released to an ineligible applicant. Treasury has an obligation to 

ensure that those who are not entitled to participate do not receive funds that 

otherwise could go to eligible distressed homeowners. Treasury’s oversight 

should be more than a check-the-box determination that the self-certification is a 

part of the file.42 Treasury does more than rely on a homeowner’s selfcertification about their income, their assets, their mortgage, and the value of the 

home. Treasury requires due diligence to collect documentation to verify that a 

homeowner meets the other eligibility requirements – this eligibility requirement 

should be no different.

SIGTARP found that Treasury’s oversight of Florida’s HHF programs related to 

homeowner fraud certifications is lacking and leads to vulnerability to fraud. 

Treasury’s HHF Program Director told SIGTARP that “[Treasury] does not 

perform criminal background checks to verify the accuracy of Dodd-Frank 

certifications for HHF programs.” Florida HFA’s Homeownership Director told 

SIGTARP that they did not have access to criminal databases to validate the 

certifications. The absence of a systematic process for detecting 

 41 Information is limited even for those deemed ineligible due to a homeowner self-certifying as to a mortgage fraud 

conviction. Because Treasury does not require reporting on why a homeowner was denied, Treasury does not know 

how many applicants were denied for truthfully self-reporting their mortgage fraud offenses. 42 A Treasury compliance official told SIGTARP that their compliance review consists of looking to see if the 

certification is included in the documentation for assistance but does not test for the truthfulness of the attestation. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 42

SIGTARP 16-001 October 6, 2015

misrepresentations made in the self-certifications means that most falsifications 

by an applicant would not be discovered. 

Treasury should inquire into gaining access to criminal databases; however, even 

if they do not receive access, or before they gain access, convictions are public 

records, housed as Treasury’s certificate says, in “federal, state, and county 

databases,” typically readily available to search on the internet, or at least to 

request records that could come in a matter of days while Florida HFA advisor 

agents are processing the application. The Florida Supreme Court issued an 

administrative order allowing all county clerks to post records online. For 

example, the Clerk of the Court Miami Dade County has a “Miami-Dade County 

Criminal Justice Online System” where anyone can search by defendant name and 

click an option for “I wish to request a background check,” The Lee County Clerk 

of the Court provides for an online criminal records request by defendant’s name 

on their website. 

Treasury’s lack of any due diligence to ensure that HHF funds do not go to 

ineligible homeowners (those convicted of mortgage-related fraud) makes HHF 

vulnerable to potential fraud, and thwarts the intent of the Dodd-Frank Act. 

Taxpayers who funded HHF deserve more than reliance on a self-certification to 

protect TARP from fraud. The options available to comply with the Dodd-Frank 

Act are not complicated and would require that Treasury, or its agents at Florida’s 

HFA, do what it says it does in the warning contained in the certification –

conduct routine criminal record checks against federal, state, and county 

databases.

Treasury should also ensure that companies that state HFAs contract with, such as 

Florida HFA advisor agencies, who are paid with HHF funds, also are not run or 

staffed by felons convicted of mortgage-related crimes. For example, a Florida 

homeowner who had applied for HHF and not heard back became concerned. Her

internet search revealed that the director of the advisor agency had been arrested 

and charged with organized fraud. An investigation by Florida HFA’s Office of 

Inspector General confirmed the pending organized fraud charges and also 

confirmed that a record search of the Department of Business and Professional 

Regulation and the Office of Financial Regulation showed that in a 2009 final 

order, this director of the advisor agency had his real estate license and mortgage 

broker licenses revoked for committing fraud related to a residential mortgage 

transaction, and that the director had admitted to the fraud. Florida’s HFA had no 

knowledge of this. Subsequently, Florida’s HFA terminated their contract with 

this advisor agency.

To strengthen HHF even stronger against fraud, Treasury should also search not 

just for convictions, but also for arrests. Many county sheriffs maintain online 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 43

SIGTARP 16-001 October 6, 2015

records of arrest searches by name.43 Treasury could put a notation with the 

homeowner’s application if they have been criminal charged for mortgage-related 

crimes and are awaiting trial. HHF Florida has such long application processing 

times that the trial could happen prior to a decision to provide HHF assistance. A 

notation in the system reminds an advisor agent of Florida’s HFA to go back and 

check to see whether the person has been convicted prior to HHF advancing the 

funds. 

For example, an employee at an advisor agency read an article in a local 

newspaper about criminal charges brought against an applicant who was being 

processed for HHF funds. Florida HFA’s Office of Inspector General conducted 

an investigation that revealed that the applicant had failed to disclose his 

subsequent arrest for fraud charges related to a more than $4-million investment 

fraud scheme involving more than 50 victims including many active or retired 

Florida school teachers and administrators. The scheme included conduct that 

could preclude his eligibility as it alleged that proceeds from the fraud had been 

used for personal gain to purchase commercial and residential properties. The 

applicant received his first HHF assistance just months after the indictment, and 

subsequently pled guilty to four felony counts for operating a sham investment 

fraud.

Finally, the exclusion in the Dodd-Frank Act is a minimum, and there could be 

other crimes for which a person is convicted that could make HHF vulnerable to 

fraud. A senior Florida HFA official told SIGTARP, “The only crime that 

prohibits someone from receiving HHF assistance is a conviction under DoddFrank for mortgage fraud.” Florida might have better protected against potential 

abuse of taxpayer funds had it chosen to impose additional exclusion criteria. 

Treasury’s HHF Program Director described the Dodd-Frank exclusion to 

SIGTARP as “pretty narrow.” Besides the Dodd-Frank Act exclusion for 

mortgage fraud, HHF Georgia precludes aid to individuals where the applicant 

has any federal or Georgia tax liens and the home must be unencumbered by 

federal or state tax liens.

It is possible that individuals with other types of serious convictions could make 

HHF vulnerable to fraud. This could include persons convicted of a felony within 

the last 10 years for crimes of dishonesty unrelated to mortgages, such as 

embezzlement, forgery, bank fraud, welfare fraud, unemployment compensation 

fraud, and false statements. These types of crimes have the same concerns 

regarding integrity and truthfulness as the mortgage fraud exclusion, which 

should at a minimum require a more focused review to ensure the truth about 

statements of assets and income. For example, according to a 2014 Florida HFA 

Office of Inspector General investigative report, a homeowner who had applied 

for HHF in September 2012, claimed to be unemployed. A Google search of the 

 43 For example, the Lee County Sheriff’s website allows anyone to search arrest records by name

http://www.sheriffleefl.org/main/index.php?r=crimeActivity/inmateIndex.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 44

SIGTARP 16-001 October 6, 2015

applicant’s name reveals a July 23, 2012 press release by Florida Chief Financial 

Officer Jeff Atwater, Department of Education Commissioner Gerard Robinson,

and State Attorney Stephen Russell of the 20th Judicial Circuit announcing the 

arrest of the applicant for misappropriating state funds, Federal grant funds, and 

donations of almost $1 million to fund his extravagant lifestyle, funds that were 

supposed to fund his prior employer, a Florida non-profit for disabled persons that 

later shut down where he served as the Executive Director. He was cleared for 

HHF underwriting in November 2012, but did not receive HHF funds only 

because he listed the wrong servicer, which delayed funding. He would later be 

sentenced to 39 years in prison. The arrest and charges were publicly available on 

Lee County records, but were not searched. That type of crime of 

misappropriating federal and state dollars should at a minimum require HHF 

Florida to conduct greater due diligence to ensure the truth about assets and 

income.44

 44 The Florida Housing Finance Corporation Office of Inspector General Annual Report for Fiscal year 2013 reported on 

one investigation where they found a HHF recipient received funds who had been reported about in the Tampa Bay 

Times and had been “subject to several previous fraud investigations, charges and convictions and is currently in jail.” 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 45

SIGTARP 16-001 October 6, 2015

Conclusion

When the Administration and Treasury announced that the Hardest Hit Fund 

would give states flexibility to tailor local solutions, it announced that flexibility 

would come with strict accountability by Treasury – that program effectiveness 

would be measured, and that there would be effective oversight by Treasury. At 

the beginning of HHF, Treasury told all state housing finance agencies that they 

were required to have a tracking system to measure progress against goals, and 

report to Treasury. Former Treasury Home Preservation Office Chief Phyllis 

Caldwell told SIGTARP in 2011, that Treasury could evaluate success in HHF in 

ways such as, “are we reaching the right number of people, are we reaching them 

in a sustainable way.” After five years, HHF Florida has only used half of the 

allocated $1 billion in TARP dollars in a 7-year program, has decreased the 

number of homeowners estimated assisting by 63% from 106,000 to 39,000, and 

is underperforming compared to the national average of other HHF states. 

SIGTARP found that Treasury abandoned its intent to set goals for HHF program 

effectiveness and to measure progress against those goals. Treasury rejected 

SIGTARP’s 2012 recommendations to set goals for effectiveness and measure 

progress, stating that any numeric targets are “not well suited to the dynamic 

nature of HHF.” HHF Florida’s goals are “preserving homeownership” and 

“protecting home values,” more high-level expectations that could have been 

considered met in the first year. Treasury has not set any numeric or non-numeric 

goals that could measure program effectiveness, except one-time for HHF Florida 

in 2012, after SIGTARP’s report. Instead, Treasury’s current HPO Chief Mark

McArdle told SIGTARP, “there is no such thing as one set goal that works or 

doesn’t work.” 

Treasury setting no measurable goals or targets over fear of impacting the 

“dynamic nature” of this TARP program has led to a lack of the strict 

accountability promised at the launch of HHF, and what is required of all Federal 

agencies by the Government Performance and Results Act. Flexibility and 

innovation does not come in a Federal program without accountability that can be 

measured against targets. 

Treasury has tried it their new way, different than announced, with no numeric 

goals and targets to measure the effectiveness of HHF Florida for five years, and 

as a result, the numbers have not added up for distressed Florida homeowners.

According to Treasury’s data, only 20% of homeowners who applied for help 

from HHF Florida received assistance. Treasury has not set a goal for what is the 

right number of people for HHF Florida to reach, as former HPO Chief Caldwell 

said, instead allowing HHF Florida to decrease the estimate of homeowners to be 

helped by 63%. SIGTARP found that this estimate has limited usefulness 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 46

SIGTARP 16-001 October 6, 2015

because Treasury has permitted Florida HFA to decrease its estimate several 

times, creating a shifting baseline that makes it difficult for Treasury to measure 

HHF Florida’s progress and to hold itself or Florida’s HFA accountable in getting 

assistance to homeowners in a crisis. 

Treasury has not set a goal for a target homeowner admission rate for HHF 

Florida, and as a result: 

• According to Treasury’s data, only 20% (22,400 of 109,774) of homeowners 

who applied for help from HHF Florida received assistance. 

• HHF Florida has the lowest rate of admitting homeowners into HHF than any 

other HHF state. 

• HHF Florida’s 20% homeowner admission rate is far below the other 18 HHF 

states that average providing assistance to about half (48%) 204,111 of the 

424,632 homeowners who applied. 

HHF Florida has not been as effective in reaching homeowners as other states and 

has not progressed effectively. By not measuring progress against a target 

homeowner admission rate, the low homeowner admission rate for Florida has 

been relatively constant throughout the five-year history of HHF (ranging from 

18 to 23%). If Treasury continues to reject setting a goal of the right number of 

people to reach in Florida, Treasury should at least, publicly, set a goal specific 

for HHF Florida’s homeowner admission rate. This goal would target the 

particular needs of Florida homeowners, based on the five years of knowledge 

that Treasury has about HHF Florida, while ensuring that Florida homeowners 

have as much a chance in HHF as homeowners in other HHF states. 

HHF Florida consistently denied homeowners at higher rates (38-45%) than the 

national average, which improved this year, but is still slightly above the national 

average. Treasury has not set a goal for a target homeowner denial rate for HHF 

Florida, and as a result, through the history of the five years of HHF, HHF Florida 

has denied a higher percentage of homeowners for assistance than the national 

average in HHF, which showed some improvement this year. After the first year 

in HHF, according to Treasury’s data, as of March 31, 2011, HHF Florida denied 

45% of homeowners who applied, compared to the national HHF average of 21%. 

By the second year, HHF Florida denied 43% of homeowners, compared to the 

national HHF average of 31%. 

Treasury does not have insight into why these homeowners were denied because 

it does not publicly report on denial reasons. Treasury’s HPO Chief told 

SIGTARP that in 2011, Treasury looked very closely at the reasons why 

homeowners were denied in Florida. However, Treasury provides no 

transparency on why HHF Florida denied homeowners. After SIGTARP’s 

April 12, 2012 report, Florida’s HFA compiled the reasons homeowners were 

denied, which gave insight that led to the board of Florida’s HFA voting on 

April 27, 2012, to eliminate four homeowner eligibility requirements that had led 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 47

SIGTARP 16-001 October 6, 2015

to HHF Florida denying half of all homeowners. This led to some improvement 

(HHF Florida denied 38% of homeowners for the two following years), but was 

still high compared to the national HHF average of 28%. For the first time this 

year ended March 31, 2015, there was improvement. HHF Florida reported 

denying 29,554 (27%) of the 109,774 homeowners who applied, which is slightly 

over the national average of 26%. However, during this same reporting period, 

HHF Florida had very high rates of homeowners whose HHF applications were 

withdrawn (39% compared to the national HHF average of 27%), and 14,800 

homeowners whose HHF applications were in process (13% compared to the 5% 

national HHF average), which requires further Treasury review. 

According to Treasury’s data, nearly 40% of all homeowners who applied to 

HHF Florida either withdrew their application or had their application 

withdrawn by Florida’s HFA, which is far higher than the national average. 

According to Treasury’s data, 43,030 of the 109,774 homeowners who applied for 

HHF Florida either withdrew their application after being approved, or Florida’s 

HFA withdrew their application because the homeowner did not respond to 

requests for information. Treasury lumps both of these very different situations 

into one reporting category, not broken down. The rate has escalated from 35% in 

2012. The national HHF average is 27% withdrawn applications, but HHF 

Florida drags the national average up. The average of the other HHF states is 

24% withdrawn applications. Neither Treasury nor Florida’s HFA follow up with 

the homeowner to ask why they withdrew their application. 

Treasury has not set a goal for HHF Florida for the number of applications 

withdrawn by Florida’s HFA. High numbers of applications that Florida’s HFA, 

or their advisor agencies in counties around Florida, withdraws for homeowners 

who are not responding to requests for information, raises questions about 

whether HHF Florida is operating in the most effective way. Treasury also has no 

goal for how long it takes Florida’s HFA to process homeowner applications. 

According to Treasury’s data as of March 31, 2015, HHF Florida takes a median 

of 167 days (nearly 6 months) to get a homeowner assistance.

SIGTARP found several factors contributed to the Hardest Hit Fund Florida’s 

slowness in getting assistance to homeowners and lack of effectiveness during the 

height of the crisis when Florida homeowners needed it most:

• HHF Florida lacked comprehensive planning by Treasury, who waited for 

Florida’s HFA to get large servicers to participate. According to a senior 

Florida HFA official, the lack of big servicer participation was the primary 

challenge of implementing HHF. That official told SIGTARP in 2011, “The 

one billion dollars has been a nice carrot to use for servicers in Florida, but 

there is no stick with the carrot to force servicers to participate,” and that if 

Treasury had a stick to use on servicers, they had not used it. Unemployed 

homeowners would have to wait more than one year before the statewide 

rollout of HHF assistance in Florida. A senior Florida HFA official told 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 48

SIGTARP 16-001 October 6, 2015

SIGTARP that there was no hint of big servicer participation until the Fannie 

and Freddie (the GSEs) put out guidance, and that the Federal Housing 

Finance Agency (FHFA), the GSEs, the big servicers, and the first 10 states 

looked to Treasury to instigate improvement. Treasury expected states to talk 

to servicers, and “wanted to let that process work out,” according to 

Treasury’s HPO Chief. Treasury would later intervene to “change the game” 

according to Treasury’s HPO Chief, holding a servicer summit in September 

2010, after which the program started to gain traction. Treasury’s servicer 

summit was “the first big step” according to a senior Florida HFA official, and 

only after that did Fannie Mae and Freddie Mac issue guidance directing 

servicers to accept HHF funds (in November 2010). Florida started 2010 with 

an 11.8% unemployment rate, and by the time the HHF program rolled out, 

Florida’s unemployment rate, although still high at 10.1%, had already started 

to improve.

• SIGTARP found that despite choosing Florida for HHF because it had the 

third highest home price decline in the nation, the Hardest Hit Fund in Florida 

suffered from a lack of comprehensive planning by Treasury to provide 

assistance to underwater homeowners when home price declines were at their 

highest. There was no HHF Florida program targeted to underwater 

homeowners for the first three years (2010 – September 2013). Treasury left 

it to Florida HFA, acting deferentially, only taking action in response to a 

state’s request. Treasury could have intervened to change the game, by 

proposing and pressuring Florida’s HFA to start a program targeting 

underwater homeowners, but Treasury did not do so until November 2012, 

after SIGTARP’s report. By September 2013, when HHF Florida started 

principal reduction, home values had already increased by more than 22% 

from second quarter 2011 lows.

• The first two years of HHF Florida were plagued by the fact that nearly half of 

all homeowners were denied as ineligible. By April 1, 2012, Florida’s HFA 

denied 12,516 of 27,541 homeowners (45%) as ineligible. Treasury’s HPO 

Chief told SIGTARP that Treasury looked closely at the reasons why 

homeowners were denied, and that Florida’s HFA had rejected a large number 

of borrowers because they could not be more than some number of months in 

arrears, and that because Florida has a long foreclosure timeline, there was an 

abnormal number of people in that bucket. Treasury’s HPO Chief told 

SIGTARP, “as long as they have...state a justification, you know, we’re 

trying to basically help people who can still be helped.” Two weeks after 

SIGTARP’s April 12, 2012 report, the board of Florida’s HFA voted to 

eliminate the eligibility requirement that a homeowner not be more than 180 -

days delinquent (the reason why 2,929 homeowners were denied) and three 

other eligibility requirements that had led to HHF Florida denying half of all 

homeowners who had applied.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 49

SIGTARP 16-001 October 6, 2015

• The effectiveness of HHF assistance to unemployed/underemployed Florida 

homeowners suffered early on due to a lack of comprehensive planning to 

ensure that the assistance lasted long enough for a homeowner to become 

reemployed at a level where they could afford to pay their mortgage – the 

measure of effectiveness stated in Treasury’s term sheet for HHF Florida. 

Although in July 2010, Treasury extended unemployment assistance in 

HAMP from 6 months to 12 based on SIGTARP’s warning that nearly 43% of 

unemployed workers have been out of work for 27 weeks or longer, months 

later (in December 2010), Treasury allowed Florida’s HFA to drop the 

duration of HHF unemployment assistance from 18 months to 6 months. 

Treasury knew that six months was the shortest duration of unemployment 

assistance provided in HHF. Treasury’s HPO Chief told SIGTARP that 

Treasury “leaves it to the states that are closer to the situation to decide,” and 

that the state had a rationale. In October 2011, California and Nevada, who 

also had six months of assistance, would extend their assistance, leaving HHF 

Florida as the only state at six months. But still, Treasury took no action. 

Two weeks after SIGTARP’s 2012 report, Florida’s HFA found that 6 months 

was not sufficient time for 88% of HHF-assisted homeowners to achieve a 

successful outcome, and they would extend to 12 months. They would make 

the change retroactive, which according to Treasury HPO Chief, “totally froze 

up their operations.”

Treasury also took strong action to increase the effectiveness of HHF Florida after 

SIGTARP’s 2012 report and recommendations, by issuing an Action 

Memorandum to Florida’s HFA in November 2012, instructing them to increase 

the low number of homeowners assisted, raise the ratio of approved homeowners 

to denied homeowners, increase inadequate staffing levels, and create a program 

to address negative equity. Treasury asked for a written plan and set a minimum 

target of an average of 750 funded homeowners a month, warning, “If Florida 

Housing fails to achieve these goals, Treasury will consider additional steps, 

including possible remedial actions, to improve performance.” Treasury told 

Florida’s HFA to lengthen assistance, to “widen the net,” according to Treasury’s 

HPO Chief.

The improvements made after Treasury intervened to change the game by taking a 

stronger role after SIGTARP’s 2012 report prove that the action SIGTARP 

recommended can make a difference over whether a state flourishes or flounders. 

Treasury described its action as “pressure” or “pushing.” Treasury’s HPO Chief 

told SIGTARP that Florida “made dramatic changes under pressure.” Treasury 

would not issue any Action Memorandums after 2012, and would return to 

deference to the states, no goals for effectiveness, and no measurement of 

progress against goals aimed at effectiveness. 

Despite the improvements made in 2013, from Treasury’s intervention, HHF 

Florida continues to lag behind other HHF states. Treasury missed an opportunity 

to apply what it had learned about the delays and other obstacles HHF Florida 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 50

SIGTARP 16-001 October 6, 2015

faced in its first two programs when Treasury left it to the state to design and 

implement the programs. Treasury lost opportunities with new programs to get 

involved in the planning stage to identify obstacles that could drag the 

effectiveness of the new programs down. SIGTARP found several factors 

contribute to this lag. 

• HHF Florida struggled with implementation issues that delayed homeowners 

from getting principal reduction assistance when Florida’s HFA stopped 

receiving applications for eight months after receiving a flood of in the first 

week (September 2013). According to Treasury’s guidelines issued to the 

HHF states at the start of the program, Treasury intended to be involved in 

identifying and mitigating obstacles to program effectiveness, but Treasury 

did not anticipate the flood despite knowing the need and that this was the first 

HHF program for underwater homeowners. Treasury did not mitigate the 

obstacle that Florida’s HFA was unable to handle the volume of applications. 

At that time the program reopened, only 1,756 homeowners had received 

assistance. Treasury has set no goals for this program. Underwater Florida 

homeowners do not have time for Treasury to defer to Florida for the 

effectiveness of this program. With such a great demand, HHF Florida 

principal reduction can address a great need for Florida homeowners with 

underwater homes, but only if it operates effectively. Only 14% of 

homeowners who applied have received assistance, and more than one-third 

of homeowners were denied. Already, fewer homeowners have received 

assistance in the last two quarters compared to earlier quarters, and it is taking 

longer (210 days) for a homeowner to get assistance than it took in the past 

(154 days). Treasury should reconsider which eligibility requirements it 

really needs to see if it can widen the net to target the typical underwater 

Florida homeowner. 

• In the HHF program for senior citizens with reverse mortgages that began in 

November 2013, Treasury and Florida lacked comprehensive planning to 

identify and mitigate obstacles that senior citizens faced applying to the 

program and providing supporting documents. As a result, Treasury’s data 

shows that 46% of all seniors who applied had their application withdrawn, 

and it takes a median 280 days (9 to 10 months) for a senior citizen to obtain 

approval for this HHF assistance. Flexibility and innovation does not excuse 

Treasury planning for obstacles. Comprehensive planning to identify 

obstacles unique to seniors should not take so long that it delays assistance, 

but does require critical thinking. Florida’s HFA told Treasury that they were 

having issues trying to reach seniors who are not sophisticated in applying and 

submitting documents online. HHF Florida now works with a state agency on 

aging to help go into seniors’ homes to help gather documents, and Treasury 

has streamlined the underwriting process. Treasury will need to be actively 

involved to ensure this program moves as fast as it can to get help to Florida 

seniors who need the money now, not in 9 to 10 months. Treasury has no goal 

for the length of time Florida’s HFA takes to process an application. Senior 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 51

SIGTARP 16-001 October 6, 2015

citizens do not have the time for marginal improvements in application 

processing times each quarter. Seniors deserve extraordinary effort and care 

to ensure that the program is effective, and that effort and care should come 

from Florida’s HFA and Treasury.

• SIGTARP found that Treasury and Florida’s HFA lacked comprehensive 

planning in a program for a non-profit to buy mortgages on underwater homes 

and use HHF funds to modify those mortgages by not identifying the obstacle 

that the non-profit might not be the successful bidder at Department of 

Housing and Urban Development (HUD) sales. After a 2-year pilot program, 

only 92 homeowners have been helped. Rather than take action to hold HHF 

Florida accountable or setting performance targets, Treasury’s HHF Program 

Director told SIGTARP that Treasury is not at a point to shut the program 

down, and that the state “has a tremendous amount of latitude to design and 

fund their own programs.” The states are not funding these programs, TARP 

is. In the meantime, the $50 million in TARP funds is not being used for 

other programs effectively reaching homeowners.

SIGTARP also found that although the Dodd-Frank Act precludes anyone 

convicted of a mortgage-related crime within the last 10 years from receiving 

HHF funds, Treasury shifts the burden of complying with the Dodd-Frank Act to 

homeowners to self-report, not conducting any due diligence to check readily 

available public databases for convictions. The Dodd-Frank Act precludes HHF 

for those convicted of a mortgage-related crime, not those who say they were 

convicted. This makes HHF vulnerable to fraud and thwarts the intent of the 

Dodd-Frank Act. Treasury can strengthen HHF even further against fraud by 

searching for arrests, as well as convictions for non-mortgage related crimes of 

dishonesty that could make HHF vulnerable to fraud such as misrepresented 

income and assets. Treasury should also require regular background checks of 

those who work on HHF programs.

Despite HHF announced as a TARP program to “help address urgent problems 

facing homeowners at the center of the housing crisis,” SIGTARP found that 

Treasury has not conducted oversight with a sense of urgency to ensure that HHF 

Florida is effective. Instead, Treasury looks for either a change to HHF Florida or 

steady growth quarter-to-quarter – “one or the other” – according to Treasury’s 

HPO Chief. Treasury only tracks and measures against the goal of HHF Florida 

spending their allocated $1 billion in TARP funds by the end of the program in 

December 31, 2017. Treasury HPO Chief McArdle told SIGTARP in 2013, “I 

believe they’re going to utilize their funds with [the HHF principal reduction 

program].” Some HHF states have already reached that capacity. After five 

years, HHF Florida still has half of their HHF funds, despite Florida’s 

homeowners experiencing a critical need.

Rather than bring strict accountability by measuring program effectiveness as 

promised, Treasury has allowed HHF Florida to underperform compared to other 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 52

SIGTARP 16-001 October 6, 2015

HHF states, consistently. Although there has been some improvement, it is not 

enough to address the urgent needs of Florida homeowners. Underperforming 

numbers show areas for Treasury to set goals specific to HHF Florida, rather than 

hope for marginal improvement each quarter. The lowest homeowner admission 

rate, the highest withdrawn application rate, failure to meet Treasury’s only 

minimum benchmark to help 750 homeowners a month, an eight-month stop in 

accepting applications for principal reduction assistance, a two-year pilot program 

with only 92 homeowners helped, 280 days to get assistance to senior citizens, are 

all areas where Treasury has allowed HHF Florida to proceed without 

accountability. Treasury’s HHF Program Director told SIGTARP that if it’s not 

working, the state HFAs “tweak it.” She said Treasury’s role is to support them 

in those efforts. However, Treasury’s role is to conduct oversight and ensure the 

effectiveness of HHF in each state by intervening to change the game when a 

program underperforms. That is what Treasury promised to do at the start of the 

program, and what has driven any improvement in HHF Florida.

Treasury allowing HHF Florida to underperform is not because of a lack of 

communication or close contact with Florida’s HFA. Treasury’s HHF Program 

Director told SIGTARP that she talks to the HHF states every day. Treasury 

officials told SIGTARP that they seek insight behind the quarterly performance 

numbers by asking Florida’s HFA questions. Treasury’s HHF Program Director 

has described how Treasury communicates constantly with “stakeholders” in 

HHF to share best practices, refine programs, and identify obstacles, among other 

things. She described how Treasury holds a monthly conference call with all 

HHF states, and an annual in- person summit with all states, large servicers, and 

the GSEs, to understand their issues and concerns. Despite Treasury’s constant 

contact, collaboration, and sharing, Treasury has allowed HHF Florida to lag 

behind other HHF states in program effectiveness, consistently, according to 

Treasury’s own performance numbers. Treasury’s HHF Program Director told 

SIGTARP, “there is so much going on that we just can’t see based on a quarterly 

performance report.” If Treasury cannot see what is going on, then neither can 

the public. There should be greater transparency as to the specific improvement 

(goal) that Treasury wants HHF Florida to meet and how Treasury will measure 

the state HFA getting there. To the extent those discussions happen between 

Treasury and state HFAs, they are not memorialized, which allows the HHF states 

to escape accountability from Treasury, Congress, and the American taxpayers 

that fund TARP. 

There is one significant stakeholder that Treasury did not mention – Florida 

homeowners. As times have improved for most, it can be tough for those with a 

job, an income sufficient to pay their mortgage, and who do not owe more than 

their home is worth, to understand the struggles and frustration of a homeowner 

still going through tough times looking to the TARP bailout for help. Without 

regular contact and communication with those homeowners, it can be hard for 

Treasury officials to put a face to a HHF performance statistic, hard to understand 

how an unsophisticated homeowner can get confused about all the documents 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 53

SIGTARP 16-001 October 6, 2015

required, hard to understand the desperation of a homeowner who could not wait 

months while their application was “in process” and had to go elsewhere for help 

or entered into foreclosure, and hard to understand what it is like for a senior 

citizen to face a world that has gone online, and face their own forgetfulness 

about where documents are to be found. 

To make HHF Florida as effective as possible, Treasury should increase its 

contact and communication with the stakeholders that matter the most – Florida 

homeowners who take part in the HHF application process, who can give 

Treasury the best insight into areas that need improvement. Treasury should not 

just communicate with those who received assistance, but homeowners who were 

denied or had their application withdrawn. Only regular communication and 

contact with Florida homeowners who have been part of the HHF Florida 

application process will give Treasury a true picture of what lies behind the 

performance numbers, what Florida’s HFA might not be able to tell them, and 

what obstacles stand in the way of HHF Florida being as effective as possible.

It can be natural with such close contact with a state HFA for Treasury to not 

want to come down hard on them. Oversight is not easy or comfortable. There is 

a natural tension with holding someone accountable. It is more comfortable to 

give deference – “leave it to the states” as Treasury officials told SIGTARP, to be 

satisfied with some steady improvement and a state HFA justification for worse 

performance than other states. It can be easier for Treasury’s program staff to 

leave oversight to Treasury compliance staff, but Treasury’s compliance staff 

responsibility relates to following program rules, not the effectiveness of program 

performance. Treasury’s approach to oversight has led to HHF Florida not being 

as effective as it could be, or as effective as other HHF states. Otherwise, HHF 

Florida’s performance numbers would not be lagging behind HHF national 

averages. If not Treasury, then who will bring that accountability that was 

promised, accountability that could help more Florida homeowners? 

The people who have gotten help from HHF Florida have received real assistance 

in a critical time of need, and while no program will assist all struggling 

homeowners, Treasury should strive for a program that will help the typical 

struggling Florida homeowner. As HHF Florida lags behind other HHF states, 

with only two years left for HHF, the time for Treasury giving tremendous 

latitude and deference to Florida’s HFA without the “strict accountability” 

Treasury promised must be over. HHF is not designed to be so dynamic and give 

such latitude and deference to the states that state HFAs are allowed to administer 

a program that lags well behind other HHF states in providing effective assistance 

to Florida homeowners. 

Florida homeowners in distress need help now, not by the end of 2017. 

According to RealtyTrac, Florida had the nation’s highest foreclosure rate at 2.3% 

in 2014. Five years into the program, these are not homeowners who have time 

for Treasury and Florida’s HFA to watch for steady improvement that while 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 54

SIGTARP 16-001 October 6, 2015

needed, is not enough to stop HHF Florida from lagging behind other HHF states. 

Even with improvements made in HHF, Florida homeowners still need Treasury 

to push and pressure and demand that HHF Florida is the most effective it can be 

right now, by setting targets and measuring progress against those targets, rather 

than measuring against the prior quarter. That is the role Treasury signed up for.

Treasury should go back to its roots – how it described HHF – state flexibility 

with strict Treasury accountability through goals for effectiveness and measuring 

progress against those goals. To change a future outcome for the 

underperforming HHF Florida, it is time for Treasury to change the game. 

Otherwise, HHF Florida may spend the $1 billion by December 2017, but it risks 

not being as effective as it can be to help the urgent needs of Florida homeowners 

now. All TARP programs are emergency program designed to help during times 

of crisis. That includes HHF Florida.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 55

SIGTARP 16-001 October 6, 2015

Recommendations

Making recommendations to improve the effectiveness of Government, and 

prevent fraud, waste, and abuse, is the traditional role of an office of inspector 

general. Given that SIGTARP is a Special OIG, our role is not to improve the 

effectiveness of Treasury, but to improve the effectiveness of TARP programs, 

and protect TARP programs from fraud, waste, and abuse.

1. To improve the effectiveness of the Hardest Hit Fund Florida on an urgent 

basis, and to ensure that Florida homeowners have the same chance of Hardest 

Hit Fund assistance as homeowners in other HHF states, Treasury should 

improve the homeowner admission rate in HHF Florida to a targeted level that 

would bring it closer to the average homeowner admission rate of the other 

HHF states. Treasury should set numeric targets that HHF Florida must meet 

each quarter to reach the targeted homeowner admission rate and include 

those targets in an action memorandum to Florida’s housing finance agency.

2. To improve the effectiveness of the Hardest Hit Fund in all states on an urgent 

basis, Treasury should form a HHF performance committee to meet each 

quarter to assess performance by each state housing finance agency in 

comparison to other state HHF programs, identify obstacles and risks, and 

develop strategies to mitigate those obstacles and risks. Treasury should 

memorialize the work of that committee through meeting minutes, and report 

on those obstacles and risks, as well as mitigation strategies to the Treasury 

Deputy Secretary twice a year.

 

3. To improve the effectiveness of the Hardest Hit Fund Florida in reaching 

homeowners in Florida on an urgent basis, Treasury should, within 60 days, 

reassess eligibility requirements of each HHF Florida program to ensure that 

programs target the typical Florida homeowner, keep only those requirements 

that are absolutely necessary, and eliminate those that are not. Treasury 

should memorialize the findings of this reassessment.

4. To give Treasury insight into areas to improve the effectiveness of the Hardest 

Hit Fund on an urgent basis, Treasury should require all participating state 

housing finance agencies to report on an overall state HHF level as well as 

individual HHF program level: the reasons why homeowners were denied 

assistance along with the corresponding number of homeowners denied for 

that reason. Treasury should require this reporting on a quarterly and 

cumulative basis and post that information on its website for transparency and 

accountability.

5. To give Treasury insight into areas to improve the effectiveness of the Hardest 

Hit Fund on an urgent basis, Treasury should require each state housing 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 56

SIGTARP 16-001 October 6, 2015

finance agency to report county-level data for all HHF programs and 

individual state HHF program on: the number of homeowners who have 

applied for HHF, the number of homeowners denied, the number of 

homeowners who withdrew their application after being approved for 

assistance, the number of homeowners who the state housing finance agency 

withdrew their application, the number of homeowners whose applications are 

in process, and the median number of days to process homeowner 

applications. Treasury should require this reporting on a quarterly and 

cumulative basis and post this information on its website for transparency and 

accountability.

6. To improve the effectiveness of the Hardest Hit Fund Florida on an urgent 

basis, and ensure that homeowners throughout Florida have the same chance 

of HHF assistance as homeowners in other counties within the state, Treasury 

should assess whether HHF Florida is operating in the most effective manner 

in each county. This should include, at a minimum, Treasury analyzing, 

within 60 days, which Florida counties have the lowest homeowner admission 

rates, the highest homeowner denial rates, the highest rate of homeowner 

applications withdrawn by an advisor agent for Florida’s housing finance 

agency, and the longest application processing times, Treasury setting targets 

and milestones for improvement in an action memorandum to Florida’s 

housing finance agency. Treasury program staff should, within six months, 

visit with advisor agents of Florida’s housing finance agency in counties hit 

the hardest but where HHF Florida is least effective, not for a compliance

review, but to get an understanding of eligibility requirements that may be too 

strict to target the typical Florida homeowner seeking HHF assistance, and the 

challenges and obstacles the advisor agents face in making a decision to deny 

or withdraw a homeowner.

7. To give Treasury insight into areas to improve the effectiveness of the Hardest 

Hit Fund on an urgent basis, Treasury should require that state housing 

finance agencies report separately the number of homeowners who withdrew 

their HHF application from the number of homeowners whose HHF 

application was withdrawn by the state housing finance agency. Treasury 

should require that reporting on a quarterly and cumulative basis and post that 

reporting on its website for transparency and accountability. 

8. To improve the effectiveness of the Hardest Hit Fund on an urgent basis, 

Treasury should reduce to a targeted level the length of time to process a 

senior citizen’s application and give assistance in the Hardest Hit Fund 

Florida’s senior citizen program known as ELMORE. Florida’s housing 

finance agency should view a targeted length of time to process an application 

under ELMORE not as an excuse to deny a homeowner, but instead as a target 

for their own improvement in helping homeowners make it through the 

approval process. Treasury should set numeric targets that HHF Florida must 

meet each quarter to reach the targeted processing time, and include those 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 57

SIGTARP 16-001 October 6, 2015

targets in an action memorandum to Florida’s housing finance agency, and 

measure progress quarterly.

9. To improve the effectiveness of the Hardest Hit Fund Florida on an urgent 

basis, including the median 280 days to process a homeowner’s application 

and the fact that 46% of applications have been withdrawn, Treasury should 

identify with more detail the obstacle to senior citizens getting assistance from 

the Hardest Hit Fund Florida’s program known as ELMORE by determining 

which documents senior citizens are having trouble providing. To assist in 

identifying these documents, Treasury should, within 60 days, separately meet 

with Florida’s Department of Elderly Affairs, and advisor agencies for 

Florida’s housing finance agency in targeted counties with low ELMORE 

participation in comparison to the number of senior citizens in those counties 

with reverse mortgages. After identifying the documents that are causing 

obstacles to homeowner participation, Treasury should determine whether 

those documents are essential for HHF Florida to provide assistance, and 

mitigate that obstacle by further reducing required documents (beyond what 

Treasury and Florida’s housing finance agency have already reduced) to only 

those documents that are essential.

10. To improve the effectiveness of the Hardest Hit Fund Florida on an urgent 

basis, Treasury should preclude Florida’s housing finance agency from 

withdrawing a senior citizen’s application to the HHF program known as 

ELMORE based on homeowner non-responsiveness unless Florida’s 

Department of Elderly Affairs has stated in writing that it has done all it can to 

help the homeowner complete the application and find the required 

documents.

11. To identify obstacles to the effectiveness of the Hardest Hit Fund Florida on 

an urgent basis, Treasury should increase its contact and communication with 

Florida homeowners, particularly those who have gone through HHF Florida’s 

application process by: (1) within 90 days, Treasury begin communications 

with Florida homeowners who withdrew their application or had their 

application withdrawn to understand the reasons why; (2) inviting homeowner 

advocacy groups representing homeowners who have applied for HHF to an 

annual summit with Treasury officials similar to Treasury’s servicer summit; 

(3) holding targeted Treasury-sponsored outreach events, for example, at 

Florida senior citizen centers, and in areas of high underwater Florida 

homeowners with limited participation in the principal reduction program; and 

(4) having the new HHF performance committee review and discuss 

homeowner complaints about HHF Florida at each meeting.

12. To ensure that HHF Florida is effective and ensure that homeowners 

throughout Florida have the same chance of HHF assistance as homeowners 

in other counties within the state, Treasury should hold HHF Florida 

accountable to maintaining its improvement in homeowner denial rates, by 
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SIGTARP 16-001 October 6, 2015

setting a targeted homeowner denial rate that keeps HHF Florida in line with 

the national average for HHF. Treasury should provide that targeted rate in an 

action memorandum to Florida’s housing finance agency and each quarter 

ensure that it meets that target. 

13. To improve the efficiency of the Hardest Hit Fund Florida on an urgent basis, 

Treasury should reduce the length of time HHF Florida takes to process an 

application from the median of 167 days to a targeted length of time. 

Treasury should provide that target in an action memorandum to Florida’s 

housing finance agency and each quarter measure progress against that target. 

14. To improve the effectiveness of the Hardest Hit Fund Florida on an urgent 

basis, Treasury should reduce the rate of homeowner applications withdrawn 

by the state housing finance agency to a targeted level. Treasury should 

provide that target in an action memorandum to Florida’s housing finance 

agency and each quarter measure progress against that target. 

15. To improve the effectiveness and efficiency of the Hardest Hit Fund Florida 

on an urgent basis, Treasury should, within 90 days, determine to either 

convert the Hardest Hit Fund pilot program known as the Modification 

Enabling Project to a full program or close it and put the funds to better use in 

existing HHF Florida programs. 

16. To prevent fraud, waste, and abuse in the Hardest Hit Fund and noncompliance with the Dodd-Frank Act, Treasury should ensure HHF funds do 

not go to felons convicted of mortgage-related crimes by searching or 

requiring state housing finance agencies to search federal, state, and county 

databases for an applicant homeowner’s criminal history, prior to the release 

of any funds to the applicant, given the fact that convictions are public 

records. Treasury should make efforts to gain access to other criminal 

databases.

17. To prevent fraud, waste, and abuse in the Hardest Hit Fund and noncompliance with the Dodd-Frank Act, Treasury should monitor applicants 

(and existing recipients) for subsequent mortgage-related convictions that 

would disqualify the homeowner from receiving HHF funds (or additional 

HHF funds). If an applicant has been arrested but not yet convicted of a crime 

that falls within the Dodd-Frank Act exclusion, Treasury should ensure that 

the state housing finance agency checks to see if the applicant (or existing 

recipient) has been convicted as a final underwriting step prior to releasing 

any funds (or further funds) to the homeowner. 

18. To prevent fraud, waste, and abuse in the Hardest Hit Fund, Treasury should 

ensure that state housing finance agencies conduct regular criminal history 

background checks on staff or contractors who are paid, either directly or 

indirectly, with HHF funds by searching federal, state, and county databases. 
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 59

SIGTARP 16-001 October 6, 2015

 

19. To prevent fraud, waste, and abuse in the Hardest Hit Fund, Treasury should 

conduct due diligence by searching public records for an applicant’s 

conviction for non-mortgage related crimes of dishonesty (such as 

embezzlement, forgery, bank fraud, welfare fraud, unemployment 

compensation fraud, tax fraud, money laundering, and fast statements), and, if 

found, conduct further due diligence, including looking into potential 

misrepresentations of assets and income based on the nature of the crimes. 

20. To increase nationwide stakeholder communication and address obstacles on 

an urgent need basis, Treasury should hold its servicer summit with the 19 

Hardest Hit Fund states on a bi-annual instead of an annual basis to keep 

proactively apprised of the obstacles and limitations the HHF states are 

experiencing, and to make timely interventions to better the performance and 

increase effectiveness in every HHF state in getting assistance to 

homeowners.
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SIGTARP 16-001 October 6, 2015

Management Comments and SIGTARP’s 

Response 

Treasury provided comments to the draft report. SIGTARP addressed those 

comments where applicable. Treasury generally disagreed with SIGTARP’s 

findings, and said that “Treasury believes it would hamper progress and slow the 

pace of assistance by substantially increasing the administrative burden to operate 

these programs.” Treasury did not agree to implement SIGTARP’s

recommendations, but said they would “review all of SIGTARP’s 

recommendations and respond to each one in the ordinary course.”
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 61

SIGTARP 16-001 October 6, 2015

Appendix A – Objective, Scope, and Methodology

SIGTARP performed this evaluation under authority of Public Law 110-343, as amended, which 

also incorporates the duties and responsibilities of inspectors general under the Inspector General 

Act of 1978, as amended. SIGTARP initiated this evaluation in response to a request from Senator 

Bill Nelson. The evaluation’s objective was to assess Florida Housing Finance Corporation’s 

(Florida HFA) implementation and Treasury’s oversight of the programs that comprise Florida’s 

HHF program. 

The scope of this evaluation covered Florida HFA’s Unemployment Mortgage Assistance Program, 

Mortgage Loan Reinstatement Payment Program, Principal Reduction Program, Elderly Mortgage 

Assistance Program, Modification Enabling Pilot Program, and Down Payment Assistance Program 

from each program’s inception through March 31, 2015. SIGTARP conducted this evaluation from 

June 2013 through September 2015 in Washington, D.C. and Tallahassee, Florida. 

SIGTARP interviewed Treasury and Florida HFA officials, analyzed quarterly performance and 

financial data, performed a limited review of Florida HFA’s underwriting, and reviewed other 

program documents such as FL HFA’s program proposals, readiness assessment, and Florida HFA 

and Treasury emails and memoranda. In addition, SIGTARP reviewed Treasury and Florida HFA 

press releases and obtained information from Treasury’s and Florida HFA’s websites. 

SIGTARP conducted this evaluation in accordance with the “Quality Standards for Inspection and 

Evaluation,” January 2012 edition, established by the Council of the Inspectors General on Integrity 

and Efficiency. Those standards require that SIGTARP plan and perform the evaluation to obtain 

evidence sufficient to provide a reasonable basis for findings and conclusions based on the 

evaluation objectives. SIGTARP believes that the evidence obtained provides a reasonable basis for 

the findings and conclusions based on the evaluation objectives.

Limitations on Data

SIGTARP relied on Treasury and Florida HFA to provide email communication and certain 

documentation related to Florida’s HHF Programs. It is possible that the documentation provided 

did not reflect a comprehensive response to SIGTARP’s documentation requests, potentially limiting 

SIGTARP’s review.

Use of Computer-Processed Data

SIGTARP relied on computer-processed data for this evaluation. Specifically, SIGTARP relied on 

Florida HFA’s and Treasury’s quarterly performance reports to determine the numbers and 

percentages of HHF applications approved, denied, withdrawn, and in process; and the quarterly 

financial reports to determine the status of HHF funding across each state HHF program. SIGTARP 

did not validate the accuracy of the data.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 62

SIGTARP 16-001 October 6, 2015

Internal Controls

To address the reporting objective in this evaluation, SIGTARP performed a limited review 

interviewing Treasury and Florida HFA officials, and reviewing selected Federal and state laws and 

regulations, and Treasury and state policies and procedures to determine the extent to which policies 

and procedures existed.

Prior Coverage

SIGTARP has covered the HHF program in two previous audit reports. On April 12, 2012, 

SIGTARP released an audit report titled, “Factors Affecting Implementation of the Hardest Hit Fund 

Program.” On April 21, 2015, SIGTARP released an audit report titled, “Treasury Should Do Much 

More to Increase the Effectiveness of the TARP Hardest Hit Fund Blight Elimination Program.”
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 63

SIGTARP 16-001 October 6, 2015

Appendix B – Acronyms and Abbreviations

19 jurisdictions or states 18 states and the District of Columbia

ELMORE Elderly Mortgage Assistance Program 

Fannie Mae Federal National Mortgage Association

Florida’s HFA Florida Housing Finance Corporation 

Freddie Mac Federal Home Loan Mortgage Corporation

Ginnie Mae Government National Mortgage Association

GSE Government-sponsored enterprise

HAMP Home Affordable Modification Program

HFA housing finance agency

HHF Housing Finance Agency Innovation Fund for the Hardest Hit 

Housing Markets (also “Hardest Hit Fund”)

MEP Modification Enabling Pilot Program

OFS Office of Financial Stability

PR Principal Reduction Program

SIGTARP Office of the Special Inspector General for the Troubled Asset 

Relief Program 

TARP Troubled Asset Relief Program

Treasury U.S. Department of the Treasury
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 64

SIGTARP 16-001 October 6, 2015

Appendix C – Utilization of TARP HHF Funding, By State

Source: SIGTARP analysis of Treasury Quarterly Financial Reports.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 65

SIGTARP 16-001 October 6, 2015

Appendix D – HHF Florida Assistance by County Over the 

Last 12 Months and Program to Date – As of 3/31/2015

HHF FLORIDA ASSISTANCE BY COUNTY

County

Homeowners that 

Started Receiving 

Assistance Over the 

Last 12 months

Homeowners that 

Received Assistance 

Program to Date

Dixie 0 6

Jefferson 0 6

Calhoun 0 3

Hamilton 0 1

Taylor 0 1

Madison 1 9

Bradford 1 8

Glades 1 7

Lafayette 1 3

Union 1 1

Washington 2 15

Holmes 2 10

Gulf 2 5

Liberty 2 5

Sumter 3 17

Franklin 3 8

Hardee 4 25

Levy 5 25

Columbia 5 23

Jackson 5 23

Walton 5 20

Gilchrist 6 22

Baker 6 19

DeSoto 7 29

Hendry 7 29

Suwannee 7 21

Monroe 8 20

Okeechobee 9 61

Putnam 12 49

Wakulla 12 47

Nassau 14 71

Okaloosa 23 132

Highlands 23 65

Gadsden 25 77

Martin 26 126

Santa Rosa 27 91

Flagler 29 146

Indian River 34 151

Citrus 42 140

Bay 43 133

Alachua 52 143

Collier 57 313

Escambia 61 259

St. Johns 61 259
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 66

SIGTARP 16-001 October 6, 2015

Clay 62 255

Charlotte 67 223

Leon 80 296

Manatee 83 254

Marion 87 335

Sarasota 87 309

Lake 87 299

Hernando 108 242

St. Lucie 124 506

Osceola 133 388

Seminole 145 539

Volusia 170 604

Lee 192 862

Polk 199 497

Brevard 268 931

Pasco 284 709

Pinellas 341 988

Duval 401 1,586

Orange 440 1,555

Palm Beach 480 1,825

Hillsborough 482 1,367

Miami-Dade 683 2,255

Broward 738 2,951

Source: SIGTARP analysis of Florida Housing Finance Corporation, Q1 2014 and Q1 2015 Quarterly Performance Reports.
FACTORS IMPACTING THE EFFECTIVENESS OF HARDEST HIT FUND FLORIDA 67

SIGTARP 16-001 October 6, 2015

Appendix E – HHF Application Volume Over Time by 

Application Status – Florida Compared to Other HHF States 

HHF APPLICATION VOLUME BY APPLICATION STATUS

March 

2011

March 

2012

March 

2013

March 

2014

March 

2015

Florida Homeowners Receiving Assistance 150 4,745 8,592 16,025 22,400

Homeowners Denied Assistance 288 11,352 15,729 26,334 29,544

Homeowners Withdrawn from Program 6 9,243 15,300 25,191 43,030

Homeowners in Process 195 940 2,269 1,048 14,800

Total Applications 639 26,280 41,890 68,598 109,774

Application Approval Rate 23% 18% 21% 23% 20%

Other States Homeowners Receiving Assistance 2,043 38,832 101,282 162,772 204,111

Homeowners Denied Assistance 2,607 33,804 62,991 93,266 109,991

Homeowners Withdrawn from Program 723 25,513 49,486 79,689 100,588

Homeowners in Process 7,627 22,296 21,517 18,236 9,942

Total Applications 13,000 120,445 235,276 352,768 424,632

Application Approval Rate 16% 32% 43% 46% 48%

All States Homeowners Receiving Assistance 2,193 43,577 109,874 178,797 226,511

Homeowners Denied Assistance 2,895 45,156 78,720 119,600 139,535

Homeowners Withdrawn from Program 729 34,756 64,786 104,880 143,618

Homeowners in Process 7,822 23,236 23,786 19,284 24,742

Total Applications 13,639 146,725 277,166 421,366 534,406

Application Approval Rate 16% 30% 40% 42% 42%

Source: SIGTARP analysis of Treasury, Housing Finance Agency Aggregate Report as of March 31, 2015, March 31, 2014, and 

March 31, 2013. HFA performance data from March 31, 2012 was obtained from each states Q1 2012 HHF quarterly performance 

report, the websites containing these reports can be accessed through Treasury’s “Hardest Hit Fund: State-By-State Information” 

website at: http://www.treasury.gov/initiatives/financial-stability/TARP-Programs/housing/Pages/Program-Documents.aspx.
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Appendix F – Application Denial Rate by State

HARDEST HIT FUND HOMEOWNER DENIAL RATE BY STATE

State

Homeowners 

Denied 

Assistance

Total 

Applicants

Application 

Denial Rate

Arizona 10,711 15,619 69%

New Jersey 6,951 13,093 53%

Georgia 8,815 22,695 39%

South Carolina 7,887 22,113 36%

Michigan 16,363 54,230 30%

Rhode Island 1,425 4,833 29%

California 32,262 119,453 27%

Florida 29,544 109,774 27%

Mississippi 1,296 5,096 25%

Illinois 4,072 20,294 20%

Nevada 2,694 13,694 20%

North Carolina 5,363 28,787 19%

Kentucky 1,816 9,881 18%

District of Columbia 124 861 14%

Ohio 4,841 34,778 14%

Tennessee 1,300 9,352 14%

Alabama 1,476 14,766 10%

Oregon 2,136 28,269 8%

Indiana 459 6,818 7%

Source: SIGTARP analysis of Treasury's Aggregate QPR Report for March 31, 2015, obtained from Website, 

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Housing-Finance-Agency-Aggregate-Report.aspx. 
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Appendix G – Application Withdrawal Rate by State

HARDEST HIT FUND HOMEOWNER WITHDRAWAL RATE BY STATE

State

Homeowners 

Withdrawn from 

Program

Total 

Applicants

Application 

Withdrawal 

Rate

Alabama 9,200 14,766 62%

Oregon 14,298 28,269 51%

Nevada 5,665 13,694 41%

Florida 43,030 109,774 39%

Georgia 6,555 22,695 29%

California 33,377 119,453 28%

Michigan 11,327 54,230 21%

South Carolina 4,433 22,113 20%

Ohio 5,113 34,778 15%

North Carolina 3,773 28,787 13%

Indiana 828 6,818 12%

Kentucky 1,131 9,881 11%

Illinois 2,192 20,294 11%

Mississippi 469 5,096 9%

Tennessee 697 9,352 7%

Rhode Island 333 4,833 7%

Arizona 1,033 15,619 7%

District of Columbia 28 861 3%

New Jersey 136 13,093 1%

Source: SIGTARP analysis of Treasury’s Aggregate QPR Report for March 31, 2015, obtained from Website, 

http://www.treasury.gov/initiatives/financial-stability/reports/Pages/Housing-Finance-Agency-Aggregate-Report.aspx.
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Appendix H – Treasury Action Memorandum to Florida HFA
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Appendix I – Evaluation Team Members

This evaluation was conducted and the report was prepared under the direction of Bruce S. Gimbel, Deputy 

Special Inspector General for Audit and Evaluation, and Jenniffer F. Wilson, Assistant Deputy Special 

Inspector General for Audit and Evaluation, Office of the Special Inspector General for the Troubled Asset 

Relief Program.

Staff members who conducted the evaluation and contributed to the report include Craig Meklir, Michael 

Davitt, Gerardo Lopez, Dennis Lee, and Yusuf House.
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Appendix J – Management Comments
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SIGTARP Hotline

If you are aware of fraud, waste, abuse, mismanagement, or misrepresentations associated with the Troubled 

Asset Relief Program, please contact SIGTARP.

By Online Form: www.SIGTARP.gov By Phone: Call toll free: (877) SIG-2009

By Fax: (202) 622-4559

By Mail: Office of the Special Inspector General

for the Troubled Asset Relief Program

1801 L Street., NW, 3rd Floor

Washington, D.C. 20220

Press Inquiries

If you have any inquiries, please contact our Press Office:

Kyra Daley

Deputy Director of Communications

Kyra.daley@treasury.gov

202-927-1852

Legislative Affairs

For Congressional inquiries, please contact our Legislative Affairs Office:

Joseph Cwiklinski

Director of Legislative Affairs

Joseph.Cwiklinski@treasury.gov

202-927-9159

Obtaining Copies of Testimony and Reports

To obtain copies of testimony and reports, please log on to our website at www.SIGTARP.gov.