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The South Carolina Housing Finance and Development Agency sat out the chance to apply for money three times after a staffer mistakenly concluded that the state would receive the same amount of money if a private nonprofit counseling group was the only one to apply. Instead, hundreds of nonprofits competed for a pool of money that was smaller than what state housing finance agencies could apply for.
This is unconscionable, especially when you consider that people who receive professional counseling are 60 percent more likely to avoid foreclosure, according to the Urban Institute. Counselors help homeowners through the refinancing process and work with banks to keep people in their homes.
The negative impacts of foreclosure go far beyond the individual homeowner and the mortgage holder. It affects families, neighborhood crime rates and nearby property values.
Here in Beaufort County, another 180 properties are scheduled for sale in the monthly foreclosure auction to be held Jan. 4. In December, 159 properties were sold in the monthly auction.
The agency's failure to apply for federal aid is reminiscent of state officials' failure earlier this year to make a necessary change in state law to get money for extended unemployment benefits.
Congress has approved another $65 million for the foreclosure counseling program, and state officials say they'll apply for future rounds of funding. But the housing agency and nonprofit groups will have to compete for the grant money. Successful applicants might see the money by March.
The nonprofit Family Services Inc. has received about $2.5 million to provide foreclosure counseling, but that money will run out long before the state could get money from the next round of grants. The program has helped more than 8,000 struggling homeowners across the state ask their lenders for lower mortgage payments, the Charleston Post & Courier reports.
The group unsuccessfully sought money from other agencies such as the Department of Housing and Urban Development and mortgage giants Fannie Mae and Freddie Mac, the newspaper reports. The group even proposed charging banks $450 per evaluation, saving a bank's mortgage servicing department paperwork and time, said David Geer, Family Services' executive director, but the idea hasn't gained traction among larger banks.
At an already difficult time for struggling homeowners, state officials should be doing what they can to help. Instead, South Carolina's housing agency has made getting help that much harder.
