The federal government is providing the South Carolina State Housing Finance and Development Authority (SC State Housing) with over one hundred millions dollars to offer homeowners mortgage assistance. The program is known as the hardest hit fund. The mortgage assistance program in South Carolina will be called the SC Homeownership and Employment Lending Program (SC HELP).
The state had to submit a plan for approval to the federal government. South Carolina's proposal said it will use the government funds to assist homeowners that are experiencing either unemployment or a short-term loss of income. The state run program will offer assistance to those homeowners who have experienced some type of financial hardship but have regained the ability to pay for their home loans. Funds from the program can be used to pay late fees, mortgage payments in arrearages, and even reduce principal on their home loan. The goal is to provide help by making all or part of the borrowers mortgage payment for a period of time so that they can stay current on their mortgage, and it provides them time to get back on their feet.
South Carolina will provide funds to servicers to assist in making borrowers eligible under the Housing Affordable Modification Program.
Funds will also be used to modify second liens in order to allow the modification of the first lien, and to provide incentives to lien holders or subsidize borrower relocation costs in order to facilitate a short sale or deed-in-lieu of foreclosure.
The S.C. HELP, or S.C. Homeownership and Employment Lending Program, is not a charity program. The SC State Housing agency wants to make clear that these funds will go to assist “responsible borrowers.”, and not people who have lived life on the edge. The type of borrowers who may be eligible to receive mortgage assistance are homeowners who find themselves in default or foreclosure due to circumstances beyond their control, such as a medical emergency or unexpected job loss.
For example, borrowers and homeowners who have demonstrated poor or irresponsible money management, credit and debt management, mismanagement of personal budgeting and what they pay on bills, or stripping of equity from their home for nonessential purposes will not be eligible for mortgage assistance from the South Carolina Hardest Hit Fund.
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