I-Team: Federal Money Programs Offer Little Help to Nevadans - 8 News NOW

I-Team: Federal Money Programs Offer Little Help to Nevadans

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LAS VEGAS --  Nearly a $200 million piggy bank of federal money -- meant for homeowners in need -- remains almost untouched in Nevada. The I-Team's research uncovered that less than 450 families have been helped by federal dollars meant to keep thousands of Nevadans in their homes.

Last year, the federal government announced the creation of the Hardest Hit Fund to help homeowners in states including Nevada to get mortgage relief. Combined with the Home Affordable Modification Program, or HAMP, it was meant to be a one-two punch to knock out widespread foreclosures. Instead, it's become a weak left hook, leaving Nevada homeowners vulnerable to losing their homes.

A lot of Nevadans could be helped by $194 million. But the federal money is hardly helping anyone. Less than $2 million from the federal Hardest Hit Fund has actually helped Nevada families. Only 439 homeowners out of an estimated 200,000 underwater southern Nevada homeowners have received help.

"The first thing, I think about, is how frustrated people must be when they see that money is there and they can't use it," said HUD Director Ken Lobene. "The problem here is the difference between what people owe on their homes and what the homes are worth today. So, no program is going to be able to fill that hole effectively."

The Hardest Hit Fund helps in four ways:

  • The Mortgage Assistance Program (MAO) can pay your mortgage up to six months for temporary relief.
  • The Principal Reduction Program can eliminate up to $100,000 from the home's value if the lender cooperates.
  • The Short-Sale Program provides as much as $16,000 to make short sales happen quicker.
  • The Second Lien Relief Program provides money to eliminate second mortgages that often interfere with mortgage modifications.

All four programs have a wide variety of eligibility and requirements best worked through by a HUD-certified counselor.

"If you want to take the high ground, Mr. President, my senators, my congress people, put teeth in the existing law," said attorney Matt Callister who says lending banks have no incentive to follow the laws creating HAMP or the Hardest Hit Funds. He adds it leaves his clients with few options.

"Even if their income is shattered, but it's slightly over a certain notch, there is no program, there is no relief for them, I can enforce. It is for that broad middle class that the program known as HAMP works but you have to force it to work," Callister said.

UNLV economist Nasser Daneshvary says he's tracked an uptick in lending banks cooperating with the federal programs.

"I am estimating or expecting that for next year, or next three or four quarters, we should increase our share of money we have spent by about 20 percent," he said.

Nevada has until 2017 to use it's $194 million in federal money. Tens of thousands of underwater Nevada homeowners could be helped with that money but with 9,000 notices of default filed in southern Nevada, this summer alone, time is running out for underwater Nevadans seeking help now.

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