SC HELP foreclosure prevention program picking up steam

About SC HELP

Programs:

Monthly mortgage payment assistance | The program pays the borrower’s mortgage while they look for work for up to 24 months in the counties with the highest unemployment rates in the state and 12 months for all other counties, up to $36,000. Neither Horry County nor Georgetown County is classified as the hardest hit counties with the worst unemployment rates.

Direct loan assistance | For borrowers who fell behind but can now make payments so they can catch up on late fees, charges and missed payments. Borrowers can get up to $15,000 of assistance in the direct loan assistance program.

Property disposition assistance | In cases where the borrower will lose the house, SC HELP can help with moving expenses to a rental and possibly foreclosure alternatives like deed-in-lieu or short sales.

Who qualifies | Only responsible borrowers - homeowners who were up to date with their mortgage payments until their hardship - qualify for the program. A hardship is a job loss, underemployment or illness. Applicants must submit a substantial packet of information including a hardship letter, bank statements and tax returns. Anyone who thinks they might qualify should apply.

Get more info | Visit scmortgagehelp.com or call 1-855-435-7472

Dorine D’Agostino was laid off, got behind on mortgage payments and had started to feel like a loser when she found hope and help through the South Carolina Homeownership and Employment Lending Program, or SC HELP, last year.

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, with 76 of those from Horry County. 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.

First-year challenges

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.

Half the battle this year has been trying to find cost-effective ways to get the word out about the program and keep it there, he said.

“There are two reasons the program didn’t take off as quickly as we thought it would: public understanding and knowledge and public acceptance,” said Clayton Ingram, a spokesman for S.C. State Housing, who is responsible for the marketing and publicity for SC HELP.

SC HELP has bought billboards, newspaper, radio and television advertising and has worked with the Department of Employment and Workforce to send letters to unemployed homeowners, he said.

The program is somewhat complex and parts of it can sound too good to be true, so convincing the public that SC HELP is legitimate and not a scam has been a challenge, Ingram said. Scammers have been around longer than the program, so some homeowners have been hesitant, he said. SC HELP does not cost the homeowner any money - it connects them with approved housing counselors that they can use for free, Ingram said.

In this next year, there will be more community outreach through libraries, community centers and places of worship where unemployed and underemployed workers may seek help.

There are 119 servicers that participate in the program, and the list is still growing, but it took some time to work out the details with lenders and get them officially signed on to the program, Rivers said.

The process of getting the homeowners approved and getting the payments started also was slow at the beginning but has been streamlined as kinks are worked out, he said.

D’Agostino first submitted an application online from the library last March but didn’t get her first payment until early September, she said. Partly, that’s because it took her some time and several library visits and phone calls to submit all of the information, D’Agostino said.

Through every step of the process, SC HELP counselors were responsive, encouraging and reminded her what she needed to do, she said.

The approval process now takes at least a few weeks, but depends largely on how long it takes a homeowner to submit all of the paperwork for the application, Rivers said. After the homeowner completes the application, SC HELP has to approve it, which typically takes a few days, and send it off to the lender for verification, which can take up to several weeks. The homeowner has to go through a closing with a lawyer and then the first payment is made within a couple weeks.

All SC HELP money is paid directly to the lender through a zero-interest loan that the homeowner does not have to pay back if they stay in their home for at least five years.

Moving forward

With the first year challenges behind them and the program working smoothly, SC HELP staff is looking to offer more programs and reach more homeowners in the coming year.

The existing programs are now where they need to be and the process is flowing more smoothly and more quickly, Rivers said. So, he is turning his attention to developing new initiatives to add to the assistance SC HELP can provide.

The first is trying to find a way to help SC HELP customers work through a long-term modification. Many homeowners that come to SC HELP might be better served by getting a long-term modification through the lender but are unable to work out the deal on their own, Rivers said. SC HELP is exploring the possibility of helping those homeowners and using SC HELP money to make the modification possible, he said.

The program will be somewhat complicated to coordinate but Rivers is working with consultants, lenders and a few other states to develop the program, he said.

Rivers is also looking into a program that would help homeowners with their mortgage as they get job retraining, he said.

“There are constraints on what we can do with that money and we’re very careful to operate within those constraints but we’re also comfortable pushing through those programs,” Rivers said.

Lately there has been a pickup in the demand for the direct loan assistance program as more applicants have gotten reemployed but still have several months of missed payments that they can’t seem to payback.

That is exactly the situation Sharon DelCorro was in last year. DelCorro, a Realtor who also works a second job, didn’t have health insurance when she was diagnosed with cancer. She got treatment with the help of Medicaid, but fell behind on mortgage payments. DelCorro, who lives near Garden City Beach has lived in her house for 16 years, and she said she always paid her bills on time and had a great credit score until she got cancer.

At first she tried to work out a mortgage modification with her bank, but after trying for a year they were unwilling to work with her, she said. That’s when she turned to SC HELP, a program she learned about during a seminar she attended to help the clients she works with as a Realtor.

“I didn’t think it would be me who was going to need it,” DelCorro said.

She’s healthy now and continued working but couldn’t pay all the back payments and fees that had added up during her illness, she said.

It took about six weeks for the payments to go through, but the SC HELP money brought her up to date on her loan, DelCorro said.

“It saved me. It saved my home. I can’t say enough good things about it,” she said. “It’s a great program and unfortunately not enough people know about it.”

DelCorro has told friends and other Realtors about SC HELP and said she encourages anyone who thinks they might qualify to apply.

State and federal officials echoed DelCorro and urged homeowners to apply, not to exclude themselves or assume they don’t qualify.

Homeowners should apply for help as soon as they experience a hardship such as a job loss or an illness that they think will leave them unable to pay their mortgage, Rivers said. Applicants do not have to miss any mortgage payments before getting the assistance.

“It doesn’t cost a nickel to apply, just a little bit of time and effort,” Rivers said. “The worst thing [that could happen] is that they are where they started off and the best is that we can help you. Don’t miss an opportunity because you didn’t make the effort to apply.”