Pa. must learn from mistakes in FHA program
A program intended to help Pennsylvania homeowners economically burdened by the pandemic has instead added insult to financial injury. And a solution appears to be a ways off.
As Spotlight PA has documented in a series of reports, the state’s $350 million mortgage relief program has been mired in ineffectiveness.
The federally funded program launched more than a year ago with the intent of helping eligible homeowners make up late payments on mortgages, taxes, utilities and the like. But what should have been a welcome infusion of relief has instead become a frustrating and disappointing headache for too many applicants who have waited an average of six months for necessary approvals.
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There seems to be enough blame to go around.
The Pennsylvania Housing Finance Agency, which oversees the program, hired a private contractor, Innovative Emergency Management Inc., to administer it.
IEM is seasoned — it was founded in 1985 — and its website brags it has “the knowledge required to manage a federally funded long-term recovery program.”
But state officials blame IEM for not being aggressive enough in securing information from private mortgage and utility companies, which is needed to complete homeowner applications. Even worse, they say IEM rejected applications in cases where private companies were deemed unresponsive.
As a result, less than $100 million of the fund has thus far been paid out while some 6,000 applications remain on hold.
So the state HFA booted IEM and is now administering the program on its own.
All well and good, except there’s no indication the agency is making any greater headway on the backlog than the contractor. Even worse, the two sides are swapping allegations. According to Spotlight PA, the state says IEM failed to deliver on its promises while the contractor maintains performance metrics weren’t made clear.
It’s hard to believe a company as experienced as IEM would need expectations spelled out in fine print. But if IEM really had been underperforming from the get-go, as the HFA argues, state officials should have conducted more aggressive oversight or stepped in more quickly.
You know who doesn’t care who’s at fault? The thousands of state residents whose applications for assistance remain in limbo.
The disagreement has not only further delayed the application process but new applications are on hold while the transition is conducted.
The agency is clearly moving to right the ship. But while it says current applications will not need to be resubmitted, it could not guarantee that some information would not have to be submitted for applicants to register under the new system. And it has yet to give a timeline for reopening the program to new applicants.
Whatever the reason for the program’s disarray, the HFA must throw every resource it has at remedying the situation. Communication with mortgage and utility companies must be quickly established. The backlog must be triaged and tackled. Rejected applications must be reviewed to ensure no one was inappropriately denied assistance. And the program must be reopened ASAP.
Once those hurdles are cleared and state residents have received their long-overdue assistance, the state should take a hard look at how it contracts with and oversee third parties who manage wide-ranging, statewide programs.
Whatever mistakes were made this go-around, let’s learn from them.