Facing a maelstrom of complaints from congressmen, frustrated homeowners, and non-profit housing groups, Georgia officials said Wednesday they will tweak some aspects of a program that dispenses federal loans to help homeowners escape foreclosure. The Atlanta Journal-Constitution reported last week that the HomeSafe Georgia initiative has distributed only a small fraction of the nearly $340 million the state received.
The Georgia officials' action coincides with the release of a federal audit that found pervasive flaws in the Treasury Department's design and administration of the national program, dubbed the Hardest Hit Fund.
"The overall program is just really struggling to get off the ground and is experiencing these significant delays, and Georgia is no exception," said Christy Romero, the Special Inspector General for the Troubled Asset Relief Program, or TARP, which provided the money for the foreclosure-relief effort.
Fewer than 1,000 homeowners have closed a loan through the Georgia program, which launched in April 2011. Although Romero's audit focused on deficiencies at the federal level, she didn't let Georgia off the hook. In an interview with the AJC, she noted that every state, including Georgia, could have made changes sooner -- for instance, doing better marketing -- when applications lagged.
"There has been a reluctance to change anything in order to reach those homeowners. It's sort of maintaining status quo and watching disappointing numbers come in quarter after quarter," Romero said. "Georgia has an opportunity today, tomorrow and in the following days to change things."
In an email to the AJC, the official who oversees the program for the state Department of Community Affairs promised some changes: loosening restrictions on who qualifies for the loans, working with members of Congress to hold HomeSafe events, and offering face-to-face meetings to applicants who aren't able to apply on line.
However, in an interview Wednesday with Channel 2 Actions News, DCA Deputy Commissioner Phil Foil defended the agency’s decision to spend nothing to publicize the program to those who need it.
“Hindsight is always 20/20,” he said. “We're obviously trying to do this from a low cost standpoint. We want to use as much of the money for assistance as possible and not just paying for overhead.”
According to documents DCA supplied to federal overseers, the agency has allocated $23.4 million for administrative costs.
Georgia is one of 19 states that received a portion of the Hardest Hit Fund, a $7.6 billion-dollar effort geared toward the states with the highest levels of foreclosure. Georgia is No. 4.
The program, which runs through 2017, essentially helps homeowners pay their mortgages for 18 months while they seek new or better jobs. As of December, just $217.4 million had been spent to help 30,640 Americans, according to the inspector general's audit. That's just 7 percent of the minimum number of homeowners the program is designed to help.
The audit criticized the Treasury for not setting clearer targets for measuring success and not enlisting mortgage servicing companies at the outset to work with states on modifying homeowners' existing loans.
As for Georgia's performance, Reps. John Lewis, Hank Johnson and David Scott, all Democrats, have blasted the HomeSafe program as too restrictive and too hard to apply for -- particularly assailing the requirement that everyone apply online (www.homesafegeorgia.com). In that, they are echoing the complaints of Georgians who have tried to navigate the process.
"You can’t pick up the phone and call your caseworker. You have to correspond strictly by email," said Stephanie Reese, a Lithonia woman who says she was rejected by HomeSafe because her family earns $130 more than the guidelines allow. "You are at the mercy of them calling you. Perhaps you have a question and you need to reach out to them, but you can’t."
Jimmie Warren, of Sugar Hill, said his application seems to be in limbo. He applied to HomeSafe online in January and has since sent several e-mails providing the documents his case worker requested. Many times, he did not receive any acknowledgment, he said. He was further puzzled when he received notice in March that his file was being closed due to inactivity.
He thinks the program could be streamlined with a better web portal that includes a checklist homeowners and case managers both can use to track a case's progress.
"They could make this process so simple ... then you leave out all this speculation of what happened and when it happened," he said. "I’m not saying it should be easy… but for the people who do the right things, why is it this hard?"
Some local non-profits that specialize in housing issues say DCA should have made HUD-certified housing counselors an integral part of reaching out to homeowners and shepherding them through the process. DCA officials met with housing counselors as they designed the program, but did not formally incorporate them as part of it.
Neighboring states such as Florida, Tennessee, North Carolina and South Carolina, by contrast, did include housing counseling as part of their programs.
"We are the boots on the ground. We know how to get in touch with these people. We're swamped with these people," said Tom Merkel, president and CEO of non-profit housing counseling agency The Impact! Group of Norcross.
He said counselors are crucial to helping homeowners successfully navigate programs like HomeSafe Georgia, because they're able to explain the complicated requirements. Even that doesn't guarantee success, however.
Merkel said HomeSafe's parameters are so narrow that, of 50 people his agency has assisted with the application, only three have closed a loan.
"In my view, that's a 94 percent failure rate," Merkel said.
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