‘Hardest Hit Fund’ helps struggling homeowners

The Greenville NewsMay 2, 2013 

  • Help for homeowners

    The Hardest Hit Fund provides help for homeowners facing foreclosure because of issues such as unemployment or death of a spouse. They can receive help in several ways:

    •  Monthly mortgage payment assistance for up to 24 months and up to $36,000

    •  Back payments of up to $25,000 – in the form of a five-year forgivable loan – for those who have fallen behind in their payments

    Moving assistance of up to $5,000 if the home can’t be saved from foreclosure

    For more information: schelp.gov

— When Randolph Carter found himself without a job last year and unable to keep up his $701 monthly mortgage payments, he learned about a program that seemed too good to be true.

A letter from an organization called SC Help informed him that he may be eligible for federal funds that could save his home from foreclosure. Now, the mortgage payments for his Piedmont home are taken care of for the next year.

But Carter is one of relatively few South Carolinians who have taken advantage of a program called the Hardest Hit Fund.

South Carolina was one of 18 states, along with the District of Columbia, that received a share of $7.6 billion for the Hardest Hit Fund. The money comes from the payback of the Troubled Asset Relief Program (TARP) funds which had been loaned to financial institutions that faced collapse when the housing bubble burst in 2008.

South Carolina qualified based on having one of the nation’s highest unemployment rates.

Less than 20 percent of the $295 million that was set aside three years ago to help Palmetto state homeowners facing foreclosure has been released, according to figures from the U.S. Treasury.

Officials of SC Help, a nonprofit established by the State Housing Finance and Development Authority to distribute the money, say they’ve had difficulty connecting with homeowners who could benefit from the program.

As of the end of 2012, the most recent figure from which quarterly reports are available, 4,456 homeowners in the state had received $48 million in assistance. Of that, $10.2 million had gone out in the final quarter of 2012, federal data show.

Another 4,633 applicants had been denied assistance.

The agency had spent $10.7 million on “administrative support, outreach and counseling” through December, according to the Treasury Department.

Andrea Risotto, a spokeswoman for the Treasury Department, said SC Helps had spent more than $55 million as of February and committed another $18 million to homeowners.

“We feel urgency to get this assistance out to homeowners while the need is still great,” she said. “We want eligible homeowners to know this assistance is available and encourage them to apply.”

Clayton Ingram, spokesman for SC Help, said the organization is getting ready to undertake “a comprehensive outreach campaign” to raise public awareness of the program.

The program isn’t scheduled to end until 2017, so at the current rate, the money will be used well before then, Risotto said.

Only now that the foreclosure rate is moving downward is the bulk of the money going to be released to homeowners.

Statewide, the number of properties that were either in default, up for auction or owned by the lender fell from 10,685 in the fourth quarter of 2012 to 8,321 in the first quarter of 2013, according to figures from RealtyTrac, a real estate information company.

Nationally, the number of properties with foreclosure filings fell by 1 percent in March from the previous month, to 152,500, and was down 23 percent from March 2012, RealtyTrac said.

South Carolina tied with Maryland for the eighth-highest foreclosure rate in the nation, with one foreclosure for every 254 housing units, according to the report.

SC Help has tried to get more homeowners on board by easing the requirements for eligibility and increasing the level of available assistance three times, according to Ingram.

The program initially focused on unemployed people but has been expanded to include under-employed people and self-employed people who can show they lost income due to the downturn of the economy.

Also the death of a spouse, divorce and catastrophic health expenses have been included among the criteria under which homeowners can qualify for assistance. “Really any number of things that were out of the control of the homeowner,” he said.

“We weren’t looking to help people who had just made bad budgeting decisions or taken out money of their home for unrelated expenses,” Ingram said. “There had to be a demonstrable hardship.”

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