South Carolina’s Hardest Hit Funds Farce… Failing but Finally Changing?

The 18 states designated as being those “hardest hit” by the foreclosure crisis were given a total of $7.6 billion in February of 2010.  The money was to be used by the states to help homeowners through various programs designed by the states and approved at the federal level.

As last year ended, “about $1 billion” of that money had been spent, according to the Treasury Department, and after trying to understand Treasury-speak for the last five years now, the fact that they included the qualifier, “about” in their sentence makes me believe it’s something less than that amount.

A spokesperson for Treasury, Andrea Risotto, commenting in an article about the lack of funds being used to help South Carolina homeowners that appeared on GreenvilleOnline.com this month, 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.  Many unemployed homeowners delay reaching out for help as they believe they are facing a temporary situation.”

That’s funny, Andrea… hysterical, actually.  Is that why you think many homeowners are “reluctant to reach out for help?”  Because they don’t know where to turn?  Because they’re ashamed asking for assistance?  Because they think they’re only temporarily losing their homes?  That’s why $6.6 billion of the $7.6 billion hasn’t been used to help homeowners more than three years after the funds were made available?

So, you’re saying that the reason so little of the money has gone to help homeowners… is actually the fault of the homeowners themselves?  You’re laying the blame for this travesty on the homeowners… again?  Good Lord… is there nothing that’s NOT their fault?

First they proved themselves “irresponsible borrowers,” buying homes they couldn’t afford.  Recently, its their “dour mood” that’s keeping consumer spending from helping our economic recovery include jobs becoming available.  I remember why they couldn’t get their loans modified back in 2009 – 2010, according to the Mortgage Bankers Association… because 99 percent couldn’t send in the proper paperwork.  And now… after better than three years, the majority are too stupid to have figured out where to turn for help?

Is that really your final answer, Andrea from Treasury?  Want to call a friend for help and try again?  Listening to you, it’s amazing these people can feed themselves and don’t end up just starving to death in the streets all over the country.

If so many people don’t know where to turn for help after three years, perhaps you should encourage those in charge of the state assistance programs to stop keeping the availability of assistance such a closely guarded secret.  Teach them how to leak the news to the media… you guys at Treasury are great at that sort of thing… or, maybe the state’s should consider running an ad or two… or telling housing counselors about the abundance of assistance so many are missing.

As to them being too ashamed to ask for assistance, why is it that they don’t feel too ashamed to march in the streets all over the country demanding fundamental fairness from banks who continue to make it inconceivably difficult to get loans modified.  It seems that millions aren’t too ashamed to ask their banks for assistance… so it must just be the state assistance programs that make people feel ashamed about asking for help saving their homes.

And as to your assertion that they think their trouble is only temporary… well, you just don’t make any sense  at all Andrea, my dear girl.  Once you’re more than a few months behind on your mortgage, the bank stops accepting your payments and starts the foreclosure process… but you think people aren’t coming forward because they think their troubles are only temporary?

Temporary troubles are all it takes to lose your home to foreclosure, Andrea.  And besides that… well, your whole thought process is so distorted on this topic that I’m afraid that if I continue to respond to your comments I’ll lose my ability to score with more than three letter words when playing Scrabble.   (Ummm… let’s see here… oh yeah, I’ve got C-A-T… your turn.)

 

Andrea also said, “We feel urgency to get this assistance out to homeowners while the need is still great,” which begs the question: When you use the word “urgency,” do you mean it like JFK felt urgency that we go to the moon in ’62?  Or, like Nixon felt urgency to get us out of Viet Nam in ’68?  Or, like I feel an urgent need to save more for my retirement?

The reason I ask is that I’ve spoken to quite a few homeowners at risk of losing their homes, and when they say they have an urgent need for help, I’m pretty sure they mean that by next Tuesday will be too late.

The same article about the situation in South Carolina also quoted Clayton Ingram, who apparently is a spokesperson for an organization that calls itself, SC Help, who said…

“We know we’re not reaching everyone who needs it, which is the sad part for various reasons.”

Not reaching homeowners losing homes, when assistance is available that could prevent them from losing their homes is “sad for various reasons.”  There are a variety of reasons why that is sad, Clayton?  You’re going to have to help me here, because I can only think of two reasons it’s sad.

  1. Because people are losing their HOMES unnecessarily.  That’s certainly, at the very least, sad.
  2. Because you’re going through life as an imbecile.  That’s also sad.  A mind is a terrible thing to waste.

You’re saying that you’ve got the money to help stop someone from losing a home to foreclosure, but your level of ineptness is so great that you can’t figure out in a state the size of South Carolina how to let them know that you could be helping them avoid the loss of the most important asset in their life?  That’s not just sad, Clayton… that’s tragic… almost like losing a limb is tragic.  Losing your favorite jeans jacket is sad, Clayton.  

Losing a home is a lot more than just sad for many people… losing a home when you didn’t have to lose it is an unthinkable travesty that might stay with you forever.  I don’t even like thinking about losing a car, if it wasn’t necessary that I lose my car.  But my house?  

Feel free to pray with me now… “Lord, if I ever lose my home, please let it have been something that was necessary and not just something that could have been prevented by a moron like Clayton.  Amen.”

South Carolina, by the way, didn’t spend a nickel of the hardest hit funds for the first year that the funds were available and Clayton explains that it was because, they “had to develop the program completely from scratch – which we did pretty quickly.” 
To Clayton, apparently a year is “pretty quickly.”  To a homeowner at risk of losing a home to foreclosure, pretty quickly is measured in days or weeks, certainly not months.  Within months, that homeowner life may have changed in ways that will last for years.

Fair enough though… there weren’t many pre-packaged or frozen food type homeowner assistance programs around that would address the needs of people caught in the foreclosure crisis, I’ll accept that.  But for the record… let me just assure everyone reading this that if I’m ever handed $295 million, I absolutely will NOT need a whole year before some of that money is used to save homes.  In fact, I’ll save homes within the first 90 days of the $295 million check clearing my account, I promise you that.

And if I don’t… you can cut off my feet at the ankles and force me to work as a dance instructor for the rest of my life, or give me a drug that lowers my IQ to the double digit number with which Clayton’s is working.

Okay, let’s move on…

Of course, South Carolina is no different than the rest of the states lately… people are saying that the number of foreclosures is falling.  How do they know that?  Well… um… er… well, because they just do, that’s why.  And since we want so badly to believe it, some of us do too.  It’s sort of like a faith thing.

First of all, according to the same GreenvilleOnline.com article, RealtyTrac says that the number of South Carolina properties EITHER in default, up for auction or already repossessed by the lender… fell from 10,685 during the last quarter of 2012… to 8,321 during the first quarter of 2013.  

This is the sort of statistical horse pukey that makes my hair hurt, and wouldn’t you know it… once again, it’s time for Fun With Stupid Statistics, brought to you by your friend and mine, RealtyTrac’s most often quoted VP, Daren Blomquist.

Oh Lord… it’s him again.  Well, here we go… 

Derwin is a guy who has full six-pack, but he’s lacking the plastic thingy that holds the cans together.  He often says things that make me realize he didn’t pay his brain bill.  Were he any slower, he’d have to be watered once a week.

Why does RealtyTrac have to publish numbers that include, “in default, up for auction or already repossessed by the lender.”  If we’re trying to figure out the number of foreclosures in order to make some sort of relevant comparison, I don’t need to know how many homes had already been repossessed by lenders during the fourth quarter of 2012… that’s a meaningless number… lenders could have repossessed those homes in 2009, I really have no idea, and the same goes for the number of homes “up for auction.”  Maybe those homes took two years to be ready to go “up for auction.”

To underscore the point he didn’t make with some even more worthless comparisons, the article quotes him breaking the same type of data down by county, as follows…

“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.”

See what I mean?  His wheel is spinning, but the hamster has fallen off and died.

Derwood does concede that… “The real level of distressed properties in South Carolina is difficult to measure because the state requires foreclosures to go through the judicial system…”

And I’m sure that’s one of the reasons that it’s difficult to measure… I could come up with a bunch more reasons to add to that one, including RealtyTrac commingling of useless data points in order to produce statistics that are meaningless.  But, it’s not just RealtyTrac’s obfuscation of information that’s the problem, it’s the banks and servicers too… nothing about the reporting of foreclosure activity has ever gotten anywhere near clarity or consistency.  

Then, the article also points out that…

“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.”

Oh, good grief… so how do we know that anything has gone down… or up… or is better or worse?  A little over three months ago, the number of foreclosure cases in SOuth Carolina was higher than when things were at their absolute worst?  But, a few months later someone wants me to believe that the worst is now behind us?  Okay, fine.  Believe whatever you want… and wake me when it’s over.

I don’t know why, but Doorknob also commented on the ineffectiveness of the programs using the hardest hit funds, saying…

“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.”

Okay, stay with me because I can’t take too much more of this… it’s time for my Wheatena and Zwieback Toast with a glass of warm skim milk, and then it’s off to bed for me.

Hey, Dumdum… “for whatever reason it’s been difficult to gain traction across the country?”  The programs have only spent one billion out of $7.6 billion, while foreclosures have climbed into the millions all around us.  Is that what you mean by “hard to get traction?”  Well, thank you for that assessment, professor.  If you ask me, considering it’s been over three years, that’s almost running in place.

And it’s nice to know that you do at least SEE a lot of homeowners in trouble.  I’m sure that will make them feel better… not helping is one thing, but I do suppose that not seeing would be even worse.  Or maybe not… I have to think about that and get back to you.

Then, talking about South Carolina’s homeowner assistance program specifically, Dustin puts the icing on his cake, explaining…

“One issue is the criteria for qualification.  I think part of the reason is that program was really focused primarily on unemployed borrowers who are struggling.  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.”

Okay, so for those of you that were thinking that I was being too hard on Dimwit a few paragraphs ago, what do you think now… after that piece of almost indescribably obtuse insight?  The program’s been around for more than three years.  Three years ago, or even two years ago, unemployment was higher, but the program wasn’t any more effective then, so whatever he’s grasping at… he missed by a long shot.

And need I even comment on his view that unemployment has been dropping of late?  At the end of the first quarter of THIS YEAR, unemployment was UP IN 25 STATES, and FLAT IN 17… I just wrote about this issue yesterday, as a matter of fact.  And then there’s the issue of real wages, which have continued their downward slide.  Maybe Dunder has his own unemployment rate calculator under his bed.

After that he starts talking about HAMP and HARP, and he even throws out a statistic that says 35 percent of the homes listed as being in the foreclosure process are already vacant.  And how he knows that is one of those unsolvable mysteries I can’t even begin to comprehend.  Don’t even try to tell me that the servicers report that information after sending people to drive by the homes, because those same servicers are lucky when they can find a home with a loan they actually service.

Mr. Blomquist does say one thing that’s correct when he explains that the number of homeowners eligible for assistance from the hardest hit funded programs may be lower than it appears… and that’s almost always caused by nothing other than BAD PROGRAM DESIGN, which has been the point I’ve been making all along… ever since I started writing about the subject three years ago.

SC Help admits that it has changed requirements three times over the past three years in an effort to expand the program’s capacity to help homeowners, but since it hasn’t worked, I have to believe it’s at least in part because the changes were either too little, too late, or otherwise ill-conceived in some way.

I’ll tell you what hasn’t been the cause of the program’s tepid, at best, results… it hasn’t been because homeowners are too ashamed to ask for assistance… it’s not because no one knows of the program’s existence… and it’s certainly not whatever Darnel was babbling about.

SC Help’s Program Today…

Initially, the program only focused on helping the unemployed, but recent changes have expanded that focus to include the under-employed and self-employed people who have seen their incomes drop significantly as a result of the economy.  

The program also expanded eligibility to those whose hardship resulted from the death of a spouse, divorce, or a catastrophic health expense… all of which sounds pretty good to me, but I don’t have the details, and I’m very aware that the large print may giveth, while the small print taketh away.  

Assuming the homeowner qualifies, the article says, the program offers monthly payment assistance for up to 24 months, up to $36,000.  Mortgage payments are made directly to the bank.  And if a homeowner has fallen behind on his or her mortgage payments, assistance can include back payments up to $25,000 per applicant.  And if someone’s home can’t be saved from foreclosure, the program can provide a grant of $5,000 for transition to alternative housing.

The money is treated as a loan, but it’s a loan that is reduced by 20 percent each year the homeowner stays in the property, ending up with a zero balance at the end of year five.  

Like I said, it sounds like the program has come a long way in the right direction, unless I’m missing some onerous qualifying requirement undisclosed by the article.  And I’m not entirely discounting the possibility that inadequate marketing is a factor as well.  In fact, I’m confident the inadequacies involved are many and varied.

So, okay… fine.  But, now we’re sitting here going on 3.5 years since the money was made available… and that’s way past any acceptable training curve type excuses will be tolerated by anyone.  It’s time for the programs funded by hardest hit funds to help homeowners… not in tiny amounts, but substantively, stopping foreclosures with aggressive benefits and inclusive qualifying requirements.

It’s been long enough and surely we know what doesn’t work… after all, we’ve got huge amounts of experience implementing ineffectively designed programs.  Now it’s time to do something right… or step out of the way and let someone else in the house.

Mandelman out.

~~~

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Comments

  1. Gulfresident says

    Here is what happened when a homeowner tries to get ANY help:

    Hope hotline: absolutely unsure how to answer ANY questions
    OCC: they send a copy to the servicer you might complain about
    AG in Florida: they send a copy to the servicer you complain and send you a letter that they are working on it
    FAHA: they call you about your complain and promise to follow up to never be heard from again.
    Mortgage Settlement Monitor: hahahahahaha
    CPPB: they send a copy of your complaint to the servicer you might be complaining about but they actually will follow up with you.

    Or go ahead and try the enemy directly: call your servicer? You'll find out you are not eligible for any program because they don't owe your loan, or that you are not eligible because you have tried a few years ealier. But now that they know you might reinstate and really try to work this out they might just add a few thousand dollars to push you over the cliff.

    Legal Aid: they tell you: sorry "due to lack of funding".
    Where do you get help? After reading so much, trying so hard, resolving the problem by myself I still wouldn't know what to tell struggling homeowners.

    We can fly to the moon but not get the homeowners into such programs?
    May be there is an app for that?

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