Nevada families will miss out on millions of dollars of free money from the feds. That money could have been handed out to struggling homeowners.
But Contact 13 reveals, because the state didn't use it, homeowners lose it.
"Certainly it is reprehensible and it is shameful."
Representative Dina Titus is fired up over news that Nevada has lost nearly $6.7 million dollars from the state's Hardest Hit Fund.
"The money that we are losing could have helped 700 families. Think of that! 700 families with houses that are under water could have been helped if we hadn't lost that money."
Nevada's Hardest Hit Fund is run by a non-profit company called Nevada Affordable Housing Assistance Corporation or NAHAC. It was created by the state to distribute federal tax dollars in response to the housing crisis created by the recession.
In 2016, Nevada got nearly $8.9 million more from the U.S. Treasury--an addition to the existing fund that came with a requirement to get 70% of it out the door and into the hands of struggling homeowners by December, 2017.
Darcy: "Why couldn't it be done?"
Verise Campbell/NAHAC: "Well, I can tell you that what we were able to do in my short tenure here was reduce the amount of money that was returned."
NAHAC Chief Operating Officer Verise Campbell says her agency struggled with staffing, infrastructure and programs.
Titus says there's no excuse for the recent loss or the other millions that still sit in the fund.
"The reason we lost it is they're not doing anything and the numbers show that last year, they only helped 167 people," says Rep. Titus. "They have $84 million dollars at their disposal! What are they doing?!"
According to NAHAC, they actually helped 266 homeowners in 2017. But the Treasury Department's auditor has identified NAHAC "...as one of the worst participants in HHF." And as Contact 13 first reported, previous audits exposed fraud, waste and abuse under previous management. Titus says it's time for the state to step in.
"Nevada created it and gave them this authority," says Titus. "They could take it back and take charge of this program. They just don't want to do it."
Officials from Nevada's Housing Division continue to claim their hands are tied and referred us back to NAHAC. Despite the loss, they still have millions to distribute. They're struggling to create new programs--like down payment assistance--to reflect our changing housing market.
"We're now doing approximately $1 million dollars a month out the door to our homeowners," says Campbell.
And Campbell says they're committed to keep giving out what they've got left.
"Even with this broadcast, I'm hoping that the homeowners will realize that the funding is here, the program is here."
More Q & A with NAHAC:
Q: Do lenders have any say as to which homeowners get approved by the Hardest Hit Fund?
A: Servicers agree to participate in our program, meaning they accept our funds and apply them as agreed. The servicers are not involved in document collection, review or approvals on NAHAC’s side. However, lenders do decide if we can move forward with funding a file in accordance with their guidelines, such as recasting the loan or accepting monthly payments. Certain loan types are not eligible for a recast and in some cases the lender will not accept monthly payments if the homeowner is delinquent even though they qualify for one of our programs.
Q: Does NAHAC get some sort of kickback from lenders for not approving homeowners?
A: The Hardest Hit Fund is 100% federal funding, there are no “kickbacks”. NAHAC gains no benefit from servicers other than funding an additional file. Servicers typically refer their homeowners to our programs as a service to homeowners.
Q: How many homeowners applied and how many were denied?
A: From program inception through Sept., 2017: 16,434 people applied for help from NAHAC. Of those, 5,584 are receiving assistance; 4,146 have been denied; 6,600 borrowers have withdrawn from the program and 104 are in process.
Campbell says you can contact NAHAC at 888-320-6526 or click here for the website
We reached out to the Nevada Attorney General's office which provided this statement:
“With respect to the Hardest Hit Fund, this matter remains with federal law enforcement, and the Attorney General’s Office stands ready to assist. In fact, our office has reached out to the federal investigatory agency several times since September of 2016.”