What is HomeSafe Georgia?
It’s a federally funded but state-designed and -run mortgage assistance program slated through 2017. HomeSafe helps borrowers pay off delinquencies and provides up to 18 months of payments.
Among the requirements:
- Borrowers are unemployed or underemployed.
- Mortgage payments are more than 25 percent of monthly household income.
- Borrowers were current on payments prior to an event, such as job loss, that resulted in lost income.
- Borrowers are current or no more than six months delinquent at time of application.
- No active bankruptcies or tax liens. Discharged or dismissed bankruptcies are permitted.
For more information about the program, visit www.homesafegeorgia.com.
A $340 million foreclosure prevention program for Georgians — maligned by housing advocates for being too slow to react and too restrictive — is getting a reboot, but some critics still worry too few struggling homeowners will qualify for help.
The Georgia Department of Community Affairs and Gwinnett County officials on Thursday announced a metro Atlanta “kickoff” for HomeSafe Georgia, a state-run but federally funded program that had disbursed only $7.2 million in assistance, helping fewer than 1,300 families as of June, according to a state report.
At a news conference outside Gwinnett County’s courthouse — where lenders auction off foreclosures on the first Tuesday of each month — officials pledged to reach a year-end goal of assisting at least 1,000 families in Gwinnett, which has led all Georgia counties in foreclosure filings since the beginning of 2010, according to real estate research firm Equity Depot. As of June, slightly more than 200 Gwinnett families received aid.
While housing advocates cheered the move to put oomph into the program’s marketing, concerns remain that many struggling borrowers won’t be able to qualify because borrowers who are more than six months behind aren’t eligible.
Metro Atlanta’s foreclosure rate is more than twice the national average, and the state ranked fifth nationally in foreclosure filings in September, according to real estate research firm RealtyTrac.
HomeSafe, which received funding under the Troubled Asset Relief Program in 2010 and launched early last year, promised to aid more than 18,000 Georgia families through 2017 by providing a bridge in mortgage payments while struggling homeowners try to find better or new employment. Eligible borrowers receive a zero percent interest loan, which can be forgiven over five years if the borrower stays in their home.
For example, if an approved borrower is four months behind on a loan, HomeSafe will make the loan current and make payments for the next 14 months, with the borrower required to pay up to 5 percent of monthly household income. A current but struggling borrower could get 18 months of payment assistance.
State Department of Community Affairs Commissioner Mike Beatty said Thursday about 2,100 applicants to date have received assistance or have been approved for help. That’s about double the assistance provided this time last year, Beatty said, and the DCA wants to ramp up to reach its 18,000 statewide goal within two years.
“We came to the realization this was more of a retail type of program where we had to reach out [to struggling borrowers]. A lot of times in government, folks come to us,” Beatty said.
Instead, often folks behind on their loans don’t reach out for help or might be confused by the alphabet soup of foreclosure prevention programs. Navigating the bureaucracy also has been a challenge for many beleaguered homeowners.
Beatty said the DCA has ramped up staffing of HomeSafe and also linked up with housing counseling groups, including credit counselor CredAbility, to increase the number of applicants.
Karen Brown, director of the Home Defense Program of the Atlanta Legal Aid Society, said most struggling borrowers she deals with are beyond six months late. Struggling borrowers who get the runaround from mortgage companies also file bankruptcy to prevent a foreclosure as a last resort, as there is no system of judicial review of foreclosures in Georgia. (This program’s applicants can’t have an active bankruptcy.)
Of the nearly 9,000 applicants who have applied through June, only 14 percent had been approved, with about half of all applications having been withdrawn by the applicants or denied, according to a state report.
“The approval rates are low and the denial rates are consistently high,” Brown said. “I think that reflects that the eligibility requirements are still too strict.”
Approval rates are improving, Beatty said, and the requirements for the program have resulted in a 99 percent success rate of approved Georgia borrowers avoiding foreclosure. A DCA spokeswoman said borrowers who have already gotten some relief from their lenders but have fallen no more than six months behind on their modified loan also may apply.
Thursday’s relaunch is part of an effort to promote the program. The DCA also started a radio campaign in July, and is working to partner with other counties as well as with businesses and faith groups to get the word out. For instance, Hopewell Missionary Baptist Church in Norcross will hold a housing assistance event from 8 a.m. to 5 p.m. Nov. 10.
“I think they are now doing a fabulous job getting the word out,” said John O’Callaghan, president and CEO of Atlanta Neighborhood Development Partnership, a nonprofit that works to preserve mixed income communities. “But it’s not DCA’s responsibility alone, we all have to educate consumers.”
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