I-Team: Gov. Sandoval to Announce Help for Homeowners - 8 News NOW

I-Team: Gov. Sandoval to Announce Help for Homeowners

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LAS VEGAS -- Nevada Gov. Brian Sandoval says he's rolled up his sleeves and is ready to announce big changes in programs designed to help homeowners facing foreclosure. Programs such as the Hardest Hit Funds were supposed to assist states like Nevada which were decimated when the housing bubble burst. But the programs have fallen far short of the promises.

In an exclusive interview with the I-Team, the governor outlined what he hopes will be major improvements. Big promises were made but, for the most part, they simply weren't kept. The money set aside to help Nevada has yet to arrive, and what little that did arrive hasn't been spent.

Gov. Sandoval says he is tackling the problem head on and is prepared to roll out an ambitious new agenda to assist homeowners in trouble.

"Somebody's home is their single greatest treasure. It's where their kids grew up, where their greatest memories are, and their single greatest asset. As governor, I am going to do what I can to improve that situation."

Gov. Sandoval jumped into the foreclosure mess with both feet several months ago but in a non-public way. Other Republican leaders, including presidential contender Mitt Romney, favor a free market solution, saying government should do nothing to prevent more foreclosures. That's where Sandoval parts ways with his party.

"I'm taking a different approach," he said.

At the heart of the governor's renewed effort to assist homeowners is a program known as the Hardest Hit Fund, created by the Obama administration last year as a life raft for low or middle income homeowners in states most devastated by the economic collapse.

Nearly $8 billion was allocated for the program. Of that, $190 million was designated for Nevada. Even with income restrictions, it was estimated that more than 20,000 Nevada families might qualify for mortgage assistance. That's not how it worked out. Of the $190 million promised, less than $8 million has been sent from Washington. And of that, less than $2 million has been spent, helping a mere 439 homeowners as of the end of September.

I-Team Reporter George Knapp: "Only $1.7 million spent to help 439 families. What's the hang up?"

Gov. Sandoval: "It's not enough and I think part of that is doing a better job of promoting it and making Nevadans aware it's available. We've been working with the banks. I'm going to be going on TV and radio and create a website that will be one-stop shopping for Nevadans to get their questions answered."

After the first of the year, the state will roll out its new public information campaign to let homeowners know what help is available. Of the more than 20,000 who might be eligible, fewer than 1,500 have applied.

Sandoval has also been lobbying the  U.S. Treasury Department to cut loose with more of the money that was promised and thinks he made progress. More substantial are changes he has authorized in the program itself -- doubling the amount of potential principal reductions and payment assistance, expanding the period of eligibility, and tackling the biggest hurdle of all -- which is getting banks and lenders to participate. The federal program calls for banks to negotiate for reduced principals or lower payments and to put their own money into it.

Critics like Sen. Harry Reid say the banks have simply refused to cooperate. Sandoval says he has been meeting confidentially with leading Nevada bankers and thinks he has some of them ready to work with homeowners.

"There's plenty of blame to go around. I'm trying to reach solutions. It's why I called them. We reached out to banks about what we can do for Nevada. I've been impressed with their acceptance and attendance for listening to find solutions."

Expecting banks to agree might be a stretch but other issues are within Sandoval's control. The Hardest Hit Funds received by Nevada are administered by a two-person non-profit made up of two state housing officials. Nine months after the program was launched, there is still a predictable log jam, though recent numbers show an improved response rate.

I-Team Reporter George Knapp: "homeowners say it is not enough and it is not fast enough."

Gov. Sandoval: "That's it, and I take responsibility for that. When you stack us up to other states, Nevada is doing fine but there is a big fund of money and we are only using part of it. My goal is to release as much as we can."

Even though Nevada has spent less than 4 percent of the money sent from Washington for the program, that puts us in the upper tier of states which have the same program. A few have done a lot better but most have done much worse. The governor plans to release details about the changes he has worked out within a few weeks. If he really does get banks to step up to the plate, that would be quite a coup since the only way their cooperation has been obtained elsewhere is by forcing their hand via court orders or legislation.

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