Foreclosure Prevention Aid Slow to Reach Georgians

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(APN) ATLANTA — The State of Georgia has received over 339 million dollars from the Hardest Hit Fund (HHF) program and that money is intended to assist Georgians facing foreclosure.  However, these funds have been slow to reach Georgians and some advocates and elected officials are concerned about additional qualifications added by the State which may continue to make it difficult for distressed homeowners to access the funds.

The US Department of Treasury established the Hardest Hit Fund (HHF) program in February 2010, as part of the Troubled Asset Relief Program (TARP) bank bailout approved by US Congress in 2008.  As financial institutions have repaid their emergency loans, these funds have become available for other programs.

In 2010, the Obama Administration launched the Hardest Hit Fund to help homeowners avoid foreclosure in the areas hardest hit by steep home price declines and unemployment.  Through the program, participating housing finance agencies (HFAs) in eighteen states and the District of Columbia are implementing a variety of different initiatives to help homeowners struggling with their mortgage payments.

The Treasury announced the HHF would provide more than 7.6 billion dollars in aid for homeowners in Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, and Tennessee, in addition to Washington, DC.

Georgia’s funds are being distributed by the Department of Community Affairs (DCA) through the HomeSafe Georgia program.  

The Treasury approved the HHF plans for Georgia on September 23, 2010.

DCA’s HomeSafe Georgia pilot program ran from December 15, 2010 to March 31, 2011 and allowed DCA to review HHF procedures to ensure completeness, accuracy, and compliance with the Treasury’s requirements.  The HomeSafe Georgia Program launched on April 1, 2011,  and will continue until December 2017 or until the allocated funds are exhausted.

HomeSafe Georgia provides up to eighteen months of mortgage payment help for those unemployed or underemployed while they seek work.

“HomeSafe Georgia was rolled out a year ago with 339 million dollars allocated to Georgia in August 2010.  At the end of March, the State of Georgia has drawn down out of those funds 38 million.  According to the most recent Quarterly report, just under four million has been used for homeowners or about 874 homeowners,” Karen Brown, Director, Home Defense Program with Atlanta Legal Aid Society, said at a recent forum held by State Sen. Vincent Fort (D-Atlanta) and State Rep. Rashad Taylor (D-Atlanta).

The legislators held the Town Hall Meeting on Saturday, May 05, 2012, at the Providence Missionary Baptist Church.  

“We are in a foreclosure crisis that impacts the neighborhood and community.  Over the last several years there has been many public and private programs to deal with the foreclosure crisis.  Unfortunately, most of them have not been successful.  Today we want to look at a couple of programs and see if there are changes that need to be made to improve the impact on the community,” Sen. Fort told the audience.  “We need to get this information out to folks who need help.”

“Commissioner Beatty [of DCA] expected the money to roll out slowly until they got the word out to people.  Some of the regulations and guidelines on who can access the money are more restrictive than the federal government has mandated.  We have asked the Commissioner and the Governor to cut back on some of the restrictions because the money is not getting out fast enough.  The Commissioner seems to be open to modifying some of the restrictions… and to see where the obstacles are and how we can correct them,” Rep. Taylor told Atlanta Progressive News.

According to the Treasury’s website: “The HFA’s [Housing Finance Agencies] may determine the eligibility criteria to use for this Program to better ensure that this assistance has the maximum local impact and leads to sustained home ownership.”

Georgia DCA has contracted with an HFA, the Georgia Housing and Finance Authority’s GHFA Affordable Housing Inc., to manage the HomeSafe Georgia program.

According to a recent report, Georgia is not alone in the slow disbursement of the funds.

Nationally, HHF has helped just slightly more than 30,000 homeowners, or seven percent of the roughly 480,000 homeowners targeted for assistance, according to a recent report by the Special Inspector General for TARP.

The Treasury gave eligible states wide flexibility over how to use the funds, including for principal reduction; second-lien reduction or payoff; reinstatement through payment of past due amounts; unemployment or underemployment assistance; or transition assistance such as a short sale, deed-in-lieu of foreclosure, or relocation assistance.

The State of Georgia, however, decided to focus mainly on unemployment or underemployement assistance.  According to DCA’s website, “The purpose of the program is to help Georgia homeowners who have experienced job loss or a substantial decrease in their income with a mortgage payment bridge while they find new or better employment.”

According to the Inspector General’s Report, obtained by APN, one of the reasons the assistance has been so narrow is because large servicers, including Fannie Mae and Freddie Mac, have refused to participate in any assistance programs other than temporary payment assistance.

“HomeSafe Georgia is a seven year program and our goal is to help 18,000 homeowners over the next two years.  We have 340 million dollars and we can help 18,000 families.  We want to make this program the most successful in the nation when it comes to helping people,” Commissioner Mike Beatty, DCA Commissioner, said at the forum.

“We have only drawn down about one million for administrative cost for the life of the seven years.  We have helped over 1,200 homeowners.  It takes a while to get in the process.  That money is not banked at Georgia… we get that money from Treasury,” Beatty said.

Brenda McGee with HomeSafe Georgia told APN of their plans to ramp up assistance to homeowners.

“We are averaging about one million a month paid out to the servicer, but that is about to take a huge jump.  Previously we were not reinstating homeowners upfront [paying their past due amounts, making them current on their mortgage], if they were five months behind when they joined the program,” McGee said.  

“We kept them on the monthly payment assistance for that period of time.  We would work with the servicers at the end, when they [the homeowner] found a job, to reinstate them.  We are going to start reinstating them upfront effective June 01.  We will be spending more of the money upfront,” she said.  

Karen Brown, Director of the Home Defense Program of Atlanta Legal Aid Society, talked about the types of cases they have encountered over they years.  

“People are applying and sending in paperwork multiple times to their bank for some kind of help but the bank tells them, ‘We didn’t get any kind of paperwork.’  They are applying for some kind of loss mitigation, or a loan modification numerous times, but the bank says they don’t have the paperwork.  Their paperwork goes into a black hole and they are ignored,” Brown said.

“Some people are approved for a loan modification and they are making the payment and still they are foreclosed on.  There are lots of problems with loan modification programs,” Brown said.

Some of the concerns the panelists expressed regarding the current HomeSafe Georgia requirements are that the homeowner is no more than six months behind on their mortgage, which many people are.  Other concerns are that homeowners are not eligible if they are facing foreclosure or if they are in bankruptcy.

These are some of the criteria that panel members hope the State will change to make the money eligible for more people who are losing their homes.

Georgians interested in applying for HHF assistance may contact HomeSafe Georgia by email hhf@dca.ga.gov or call 1-877-519-4443.  Applications can be taken online at www.HomeSafeGeorgia.com.  The homeowner may also call and make an appointment and come to 60 Executive Park Drive in Atlanta and fill out an application.  HomeSafe will also take applications over the phone or they can mail or fax an application to homeowners.

Information about the HomeSafe Georgia program is available at the Department of Labor, where homeowners can use one of their computers to fill out the application.

The next HomeSafe event will be June 01 and 02, 2012, at the Georgia International Convention Center off Camp Creek Parkway in College Park, Georgia.

Individuals facing foreclosure can get legal help from Home Defense Program at Atlanta Legal Aid Society by calling 404-377-0701; those age 60 or older should call the Senior Legal Hotline at 404-657-9915 or 1-888-257-9510.

Carrie Harris, President & CEO, D&E Power Group, a HUD approved housing counseling agency, also spoke at the Town Hall Meeting.  D&E has partnered with DCA in a statewide effort to help the unemployed with a mortgage payment assistance program to prevent foreclosures for Georgians, under the HomeSafe Georgia program.  Ms. Harris can be reached at 770-961-6900, ctharris@depower.org, or www.depower.org for additional information.

Meanwhile, the HHF is not the only foreclosure relief assistance program that has fallen short of meeting its intended purposes.

Home Affordable Modification Program, also under TARP, which was the Obama Administration’s main mortgage assistance initiative, has also fallen far short of its goals.

“There is another program I want to mention… it is a settlement with the banks over mortgage fraud and they are paying 25 billion dollars.  The State of Georgia, the folks who were defrauded, will get about 800 hundred million.  100 million of that is supposed to come through the State of Georgia and it is supposed to go to homeowners.  The Governor has decided to put it elsewhere and not for the homeowners who have been defrauded,” Rep. Taylor said.

Taylor recently sent a letter to Georgia Attorney General Sam Olens regarding the matter.

(END/2012)

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