NORTH CHARLESTON — Editor's note: This is the final story in a four-part series looking at the local impact of the foreclosure crisis.
A group of struggling homeowners sat in a conference room in a North Charleston office building with a stack of papers and a giant calculator as they listened to Debbie Kidd, who, with a no-nonsense attitude, guided them through a foreclosure prevention clinic.
Family Services Inc.'s Homeownership Resource Center, which ran the workshop, is busier than ever as a result of the foreclosure crisis. Kidd is the director of the center, which provides free foreclosure counseling and prevention assistance to homeowners along the Grand Strand and throughout the state.
In the two-hour session, Kidd talked about how lenders make decisions, what information homeowners need to provide to get a loan modification and how the Homeownership Resource Center can help. And she didn't hold back the punches as she described the need for homeowners to be honest with the foreclosure counselors and give them all their financial information.
"If you want to tell us stories to make your file look better, we will close your file," she said. "You have to be able to back up what you put in your hardship letter."
But Kidd was also reassuring.
"It's a very frustrating process, which is why no homeowner should go it alone," she said.
Mismanagement of money is the No. 1 reason people default on their mortgage, Kidd said. She advised the homeowners to cut back on everything they could - get rid of the cable package, cut your own grass instead of paying someone else to do it, put off maintenance around the house and limit holiday spending.
"Change your spending. ... None of these has to be forever," Kidd said.
She explained that banks look at budgets and may ask for some money up front so homeowners should try to have at least two payments saved in the bank.
"Why are we scrutinizing [your spending]? This is for us to build a plan and help you make the bank feel you're a good investment and give you a second chance," Kidd said.
Three years ago Kidd was the only foreclosure counselor with the nonprofit agency, but as the foreclosure crisis has exploded, her staff has grown to more than 20 employees to handle the increasing number of homeowners who need help.
In October, 930,437 properties in the United States and 10,500 properties in South Carolina were in some stage of foreclosure. There were 1,460 in Horry County and 38 in Georgetown County. Horry County has more foreclosures than the national average, with about one in every 118 properties in some stage of foreclosure, according to RealtyTrac, a company that tracks foreclosures.
The Homeownership Resource Center, which gets its funding through grants, is working with more than 1,200 homeowners and has worked on more than 8,000 cases this year, Kidd said.
If homeowners provide all the necessary information and keep in touch with the agency, about 85 percent will get a modification and avoid foreclosure, she said. Only about 45 percent of homeowners who try to do loan modifications on their own succeed, Kidd said.
The program used to involve a lot more one-on-one counseling, but over time Kidd said it was becoming too time-consuming and pulling the foreclosure counselors away from working with banks on modifications.
Homeowners can apply to get help by filling out an application online, calling the center or showing up to attend a workshop.
The process works much more quickly than individual meetings and gets homeowners into the system so the counselors can start working with the bank on their behalf, she said.
Kidd said that she's talked with Horry County about providing some additional workshops in the area in the coming months.
The biggest barrier for homeowners seems to be pride, and many are hesitant to be seen asking for help, another reason why having fewer face-to-face meetings works, Kidd said.
Joe Parker, who went to the information session last month with his wife, Paulette, said that he was worried about someone he knows seeing him asking for help.
"Being a man, I want to be able to provide for my family," he said. "I feel proud, it's hard to ask for help."
How it works
A typical day for the counselors begins with a stack of files delivered to their desks, each representing a homeowner trying to avoid foreclosure. Each counselor works on between 12 and 18 files a day, part of a rotation system to ensure that contact with the banks is consistent and persistent.
With each file, the counselor will review the status of the file, call the lender to get an update and then get in touch with the homeowner.
They spend much of their time with phones to their ears, often on hold for 20 to 30 minutes waiting for answers from the bank representatives. While the process is similar to how a homeowners would get a modification on their own, the agency has developed contacts that help with their success rate.
The agency has strict follow-up policies with the lenders, which helps them stay on top of any changes or requests for additional documents, said Tim Bonomo, another foreclosure counselor.
"Overall the system they have in place here is very effective," Bonomo said.
The counselors work in teams so they share responsibility, especially if a modification fails and a homeowner loses his home. There used to be a lot of turnover when each homeowner worked with an individual employee.
"It was just too emotional on the staff, people were burning out," Kidd said.
The job is still tough on counselors who often take the work home with them and feel a personal responsibility to help the homeowners.
"We take it seriously. We're here fighting for these individuals. We realize what's at stake," Bonomo said.
Foreclosure counselor Yolanda Tolton said it is especially hard when she realizes she can't help someone and has to call and give them the bad news.
"You don't forget it, but you have to put it in a special compartment and move on," she said. "It can't get in the way of you coming in the next day and helping someone else."
The last resort
Some homeowners wait until the last minute to seek help, so the Homeownership Resource Center has a team that handles imminent foreclosures, mainly those scheduled for sale in the coming week.
The critical response team - Mel Meleski and Jonathan McClain - is working against the clock when they get a file.
Meleski will immediately call the bank and try to get it to agree to postpone the sale. He typically doesn't have time to submit updated documents, so he will use the pay stubs, mortgage documents, financial worksheets and hardship letters that are already in the file.
"You try to convince them there's potential," he said.
The challenge is reaching someone who has the authority to grant a postponement and then following up to ensure that the lawyer has removed it before the sale.
Meleski has worked with master-in-equity officers throughout the state and attended foreclosure hearings to contact homeowners when there is still time to save their homes.
"The main thing is getting to people in time," he said. "If you're putting some effort in, the judge is going to give you the time, which is why we're trying to get to people early."
Once Meleski stops the sale, McClain will try to get additional information from the homeowner and work toward a modification.
Some homeowners are not honest about all their expenses or their income, which is one of the problems McClain said he has run into.
"We need to know the truth when we go to battle," he said.
McClain was a mortgage banker and said that his experience on the other side helps him negotiate today.
"I have a more practical view," he said.
Even McClain, who says he's not a softy, gets satisfaction from helping homeowners.
Kathy Reynolds, 43, of Summerville, is one of those who has found help at the center. She went there as a last resort, one last-ditch effort to save her house before trying to sell it in a short sale or giving in to the foreclosure, she said. She had surgery and then lost her job, and knows she won't be able to afford the mortgage payments with her unemployment checks.
"I'm so thankful there is a resource like this, that can be a go-between," Reynolds said. "There is a light at the end of the tunnel and it is not an oncoming locomotive. For the first time I feel like I'm going to be able to keep my house."
Contact ADVA SALDINGER at 626-0317.