By Ron Barnett, Greenville News & GreenvilleOnline.com
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.
"I didn't know if it was legit or not," Carter recalled one morning in his living room in Piedmont. "And I followed through on everything and Googled it and found out they were legit."
Now, his mortgage payment is taken care of for the next year, which is enabling him to save some money, because he has found a job.
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. Some states qualified by having the biggest drop in home values.
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.
"We know we're not reaching everyone who needs it," he said, "which is the sad part for various reasons."
Only about $1 billion of that $7.6 billion had gone to help distressed homeowners as of December 2012, according to Treasury data.
The rate of flow of the money has been criticized in several states, most notably in Florida, where a federal inspector general is investigating the state's handling of its $1 billion share at the request of U.S. Sen. Bill Nelson.
Only one state, Rhode Island, had used all of its money, Risotto said.
"We have seen in South Carolina and across the country that many homeowners are reluctant to reach out for help because they are unsure of where to turn or may feel ashamed asking for assistance," Risotto said. "Many unemployed homeowners delay reaching out for help as they believe they are facing a temporary situation.
"But we hear from homeowners in the Hardest Hit Fund that the program offers tremendous peace of mind to get through a tough time so homeowners can concentrate on finding employment without the risk of foreclosure."
Although the fund was created in February 2010, SC Help didn't report spending any of the money until the first quarter of 2011.
At the end of March 2011, the agency had approved 90 applications and denied 260, according to Treasury data.
"States spent much of the first year of implementation standing up their programs - designing eligibility requirements, creating application documents and portals for homeowners, training staff and local housing counselors, conducting outreach to homeowners," Risotto said.
The program is not scheduled to end until 2017, so at the current rate, the money will be used well before then, she said.
"We had to develop the program completely from scratch," Ingram said. "We had to create a large new program with $295 million to distribute - which we did pretty quickly."
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.
In Greenville County, the number fell from 1,152 to 1,044, and Pickens County was down from 240 to 190, according to the same source.
Greenville County had the fifth-highest foreclosure rate in the state, with one foreclosure for every 185 properties. Pickens County ranked 16th, with one per 269.
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.
That ranking may be due in part to a "boomerang effect," in which foreclosures that have been backed up in the court system are now going through, said RealtyTrac vice president Daren Blomquist.
The real level of distressed properties in South Carolina is difficult to measure because the state requires foreclosures to go through the judicial system, unlike about half of the states, he said.
The number of South Carolina foreclosure cases in the fourth quarter of 2012 was higher than during the depths of the recession, when it peaked at 10,550 in the third quarter of 2010.
Nationally, the foreclosure rate is about "halfway back to normal," Blomquist said. It's down to about 150,000 filings a month, from a peak of more than 360,000 a month. Normal, before the bubble burst, was 50,000 to 75,000 a month, he said.
Lack of traction
"We've seen that for whatever reason it's been difficult to gain traction across the country," Blomquist said of the Hardest Hit Fund. "But at the same time we do still see a lot of homeowners that are still in trouble."
One issue is the criteria for qualification, he said.
"I think part of the reason is that program was really focused primarily on unemployed borrowers who are struggling," he said. "And because the unemployment rates are now dropping, that is less of a stumbling block for people to make their mortgages than it was when that program started."
And there are other programs that more homeowners have taken advantage of, he said.
Three programs under the Making Home Affordable program, also administered by the Treasury Department, have been more successful than the Hardest Hit Fund, he said.
The Home Affordable Modification Program, for example, helps homeowners get a lower interest rate or their balance reduced, or the term on the loan extended.
Another program called the Home Affordable Refinancing Program helps homeowners refinance their mortgage at a lower interest rate, even if they're "under water," or owe more on the home than its current market value, Blomquist said.
A program called Home Affordable Foreclosure Alternatives offers monetary incentives for short sales, or sale of property at less than what's owed.
"So you have all of these programs being thrown at the foreclosure problem and some of them are sticking more than others," Blomquist said.
The number of properties that potentially could be saved by the Hardest Hit Fund may be lower than it appears, because 35 percent of those listed as in the foreclosure process already have been vacated by the homeowners, he said.
Changing the rules
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.
"As the program has evolved, we have gone to Treasury to seek authorization to make the necessary changes," Ingram said. "Whenever a change is made that expanded assistance to people to who assistance was previously denied, every effort was made to go back through the applications and try to reach those homeowners."
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 and it had to be something that was pretty much out of the homeowner's control."
The program offers monthly payment assistance, in which the agency makes mortgage payments directly to the bank, for up to 24 months and up to $36,000.
For applicants who have fallen behind in their payments, the agency can make back payments of up to $25,000 per applicant.
The money for those programs is handled as a loan, but it will be forgiven at a rate of 20 percent per year that the homeowner stays in the property, zeroing out after five years, Ingram said.
If the home can't be saved from foreclosure, a grant of up to $5,000 can be awarded to help a homeowner make the transition to other housing, he said.
"This is a bridge, a lifeline if you will, to take people over hard times, from where they were responsible homeowners to where they will be able to do that once again," he said.
More information and an online application system is available at schelp.gov. The program is free, and there's no income cap for qualification, he said.
One man's story
Randolph Carter said he wanted to tell his story in hopes that others who need the help he got will seek it.
He went to work in the textile mills after graduating from Carolina High School in 1982, back when the industry was strong in the Upstate. He drove a school bus in the mornings and worked second shift at Dunean Mill.
"I've always been a hard worker," he said.
Later, he worked at another mill in Mauldin until it closed, then drove a forklift at an Anderson company for six years.
He eventually landed a production job at General Nutrition and had become a supervisor before finding himself on the unemployment rolls in October 2009.
He began to question whether he'd ever be able find another stable, good-paying job.
"It's rough out there for someone my age," the 49-year-old said.
"Everyone knows that manufacturing jobs are few and far between now," he said. "I had been looking, but I guess they were looking for younger guys."
Then he got the letter from SC Help.
His application was approved right before Christmas.
Then, in January, he found a job at Confluence, a kayak manufacturer, where he now works second shift.
Now, he's saving money and keeping his credit clean.
"They helped me right when I needed it," Carter said.
"I don't think I'd be here," he said, if not for the Hardest Hit Fund. "It wasn't looking good."
SC Help is based in Columbia, but it works through local agencies to assist homeowners with their applications.
"We wanted to have people on the ground in the local community," Ingram said. "They're closer to the situation and also people like to have a place where they can go in and speak to someone face to face."
In the Upstate, homeowners can go to one of four agencies in Greenville: the Greenville County Human Relations Commission, at County Square, Suite 1600; the Neighborhood Housing Corp. of Greenville, at 310 Mills Ave., Suite 105; the Upstate Homeless Coalition, at 150 Executive Center Drive, Suite B211; or the Urban League of the Upstate, at 15 Regency Hill Dr.
"To lose your home means that not only life becomes unstable but you're also thrown into a community and needing many more services than you might need if you had stayed in your home," said Kate Franch, executive director of the Neighborhood Housing Corp. SC Help "fits really well with our helping families to have homes."
Griffin Bell, chairman of the Neighborhood Housing Corp.'s board of directors, said the Hardest Hit Fund hasn't been fully accessed mainly because most people don't know about it.
"I think it's just a marketing issue," he said. "In my opinion, I think there are a lot of people out there who need it."
Mike Chesser, executive director of the Upstate Homeless Coalition, said the program has made a big difference in the lives of hundreds of people in the area.
"I think if we hadn't had this program, the number of people living on the street and trying to find alternative housing would have been much greater," he said. "This has had a huge impact in keeping people in their own home and we're grateful."