The State: South Carolina's Homepage
WASHINGTON - South Carolina and North Carolina were among five states chosen Monday to receive tens of millions of dollars in new federal funds to help homeowners stay in their dwellings.
South Carolina will get $138 million, and North Carolina will receive $159 million under a new $600 million initiative by the Obama administration.
"Any funding toward foreclosure mitigation is going to be very welcome," said Clayton Ingram, a spokesman for the S.C. State Housing Finance and Development Authority.
Mortgage delinquency rates in South Carolina rose to almost 10.5 percent during the last quarter of 2009, the most recent figures available from the Mortgage Bankers Association show.
Nationwide, South Carolina was ranked 17th in delinquencies and 21st in foreclosures started.
"(The U.S.) Treasury is smart to let South Carolina have a hand in designing the relief we need in our mortgage markets," said House Budget Committee chairman John Spratt.
Spratt, a York Democrat and former owner of a family bank, said state housing officials must now submit a detailed proposal to the Treasury Department, specifying how the new federal money will be used.
"It's now up to South Carolina to spell out a plan of action that will help those who need help the most and who stand to benefit the most from assistance," Spratt said.
Spratt's 5th Congressional District includes five of the state's 12 counties with the highest unemployment rates, which was a key criterion for receiving the new housing funds.
South Carolina overall is enduring record unemployment. Its 12.2 percent rate in February was tied with Florida for the nation's fifth-highest, behind Michigan, Nevada, Rhode Island and California.
"There are some measures government can take to intervene and help stabilize the market," said Diana Farrell, deputy director of Obama's National Economic Council.
"This is really an attempt to surgically go into areas where we think targeted help can be effective," Farrell said.
Ohio, Oregon and Rhode Island will also get money from the U.S. "Hardest Hit Fund" under an aid program President Barack Obama announced last month.
California, Nevada, Arizona, Florida and Michigan will divide $1.5 billion awarded in the recent first round of funding.
The new state proposals are due April 16. Once the federal government approves the S.C. plan, individual homeowners won't have to be unemployed in order to apply for aid.
Debbie Kidd, head of the Homeowner Resource Center in North Charleston, said her group's parent agency, Family Services Inc., counseled members of 3,550 S.C. households last year on how to avoid foreclosure.
"If we didn't have a handle on it, we would be in serious trouble today," Kidd said. "It's a continuous problem that we are trying to battle."
Kidd's agency already receives federal funding through NeighborWorks America, a nonprofit group founded by Congress.
Spratt said he will work with U.S. Treasury and S.C. housing officials to help them tailor their plan on how to use the new money to be distributed from Washington.
"The (U.S.) Treasury and the state need to realize that there is no cookie-cutter solution," Spratt said. "Each foreclosure has its differences, and to succeed the process needs to be supported by an adequate number of loan officers and consultants."
Herbert Allison, also a Treasury assistant secretary, said the federal agency is looking for creative approaches tied to the specific circumstances of each area.
"We are not prescribing the innovations," he said. "We want to learn from the (local) innovations and use them to help other states around the country."