South Carolina HFA: Foreclosure Prevention Program Picking Up Steam

When D’Agostino lost her job of more than 11 years, she started collecting unemployment, but despite a small mortgage payment she couldn’t cover all the mounting bills, she said. She tried looking for work but at 60 years old it was tough and she started to lose faith that everything would work out. Then she got a letter telling her about the SC HELP program and decided to apply.

 

“You think you have a stable job, and everything gets pulled out from underneath you ... and you feel like you’ve really screwed up,” she said. “When I got the letter I felt like this was a door that opened from the Lord.”

 

SC HELP offers struggling homeowners three types of assistance: monthly mortgage payments for those who are out of work; a one-time payment to help formerly unemployed homeowners pay off missed payments and fees; or financial help with a short sale or deed-in-lieu and relocation for homeowners who have no other solution.

 

The program, which is now a year old, got off to a slow start but officials say that they are reaching more homeowners in need and have sped up the process in recent months.

 

About 1,487 households received help from the SC HELP program last year statewide. An additional 581 households have been approved for the program but are waiting for the first payment, according to the South Carolina State Housing Finance and Development Authority, which oversees SC HELP. About $11 million has been distributed and $23.7 million has been committed out of the about $300 million the state has for the program.

 

The program is funded through the federal Hardest Hit Fund and pays up to $36,000 in mortgage payments or up to $15,000 in direct loan assistance to help struggling homeowners.

 

When SC HELP started in January 2010, the goal was to help about twice as many homeowners as it actually did in its first year, but several challenges meant the program fell short, said Matt Rivers, the director of SC HELP.

 

The first several months of the year were filled with challenges in getting the program up and running, determining qualifying criteria, signing on lenders and servicers and getting the word out, he said. In August everything finally clicked into place and for the past four months, the number of approvals was up about 200 percent each month from the first eight months of the year.

 

About 330 to 360 homeowners were approved in each of the last four months, less than half of the 800 homeowners Rivers wants the program to approve every month in the coming year, he said.

 

SC HELP is one of 19 programs funded through the Hardest Hit Fund and most of those programs have seen an increase in activity in the past several months, said Andrea Risotto, a spokeswoman for the U.S. Treasury Department. Its Hardest Hit funds program pays for foreclosure prevention programs in 18 states and the District of Columbia.

 

Risotto said she couldn’t comment on the progress of the SC HELP program or how it compared to efforts in other states.

 

“It is a little hard to compare across states,” Risotto said. “Each state was given funds and was able to design and implement programs taking into account local challenges.”

 

SC HELP qualification guidelines were too narrow initially and excluded too many homeowners in need, so the parameters were expanded several times to reach more homeowners.

 

There were also challenges with getting lenders on board, working out the process and getting the word out about the program.

 

“From day one we thought it was like a field of dreams, if you build it they will come,” said Rivers, adding that it didn’t turn out that way.