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South Carolina loan-modification program faces new difficulty

A program designed to help South Carolina homeowners with loan modifications to avoid foreclosure has encountered difficulty in reaching as many people as possible. Although South Carolina has nearly $300 million available, the state Finance and Development Authority says some lenders are declining to accept the money for loan modifications. This week the agency, which oversees the state's HELP program, said TD Bank is one the lenders refusing the money. Also included are Beal Bank and Green Tree.

TD Bank's public relations manager said in a statement that the bank already had comprehensive programs in place to help its underwater customers. South Carolina received $294 million from the U.S. Treasury last year to help prevent foreclosures. The funds came from money that banks paid back from the Troubled Asset Relief Program. South Carolina received the money because its unemployment rate was among the highest in the country.

According to the state government, the HELP funds are available to "responsible borrowers" who are "facing possible foreclosure due to circumstances beyond their control." They say that banks are not asked to write down the value of loans. HELP authorities also say that banks must "agree to accept the payment, agree to exchange data securely, assign a single contact and waive late fees." Applicants may include unemployed and underemployed homeowners as well as self-employed people whose incomes have drastically decreased.

Program assistance can include money to make delinquent loans current. It can also include assistance with monthly mortgage payments for up to two years, which may be of help with loan modifications. And if the mortgage can't be salvaged, there's money to help with moving to a rental property.

There seems to be little sign of recovery from the downturn in the housing market. A number of programs like HELP have been implemented at the federal and state levels. For South Carolina residents facing foreclosure, such loan modifications are a welcome relief. People thinking of applying to the programs like HELP could benefit from consulting with an attorney to get clarification about its rules and procedures.

Source: The Post and Courier, "Foreclosure aid available," David Slade, Nov. 23, 2011

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