Special Report: Hardest Hit Fund Working or Hardly Helping?

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(Memphis)  Providing hope or hardly helping? 

That's the focus of an On Your Side investigation into your tax dollars.

Some of the billions of dollars that bailed out banks also went toward helping homeowners in areas, like Memphis, hit hard by foreclosures. 

For the last three months, WREG On Your Side investigators have followed the money and local families to see if the Hardest Hit Fund is working, or hardly helping.

You might consider it the ripple effect of the recession. 

"If you look at the foreclosure statistics out there, it's not slowing down," says United Housing Executive Director Tim Bolding.

Jenna Moss said, "I was stunned, and I was like, do you think I can do that," when she heard about a way to save her home.

It's called the Hardest Hit Fund.

Troubled Asset Relief Program (TARP) money set aside for 18 states and D.C., including Tennessee, for folks like Moss, unemployed or underemployed, and struggling to make mortgage payments.
"By the time I closed, I think I was about four months behind. Yeah, so it takes care of the arrears, and then forward until the $25,000 runs out," explains Moss.

Eligible recipients of HHF can get up to $25,000 in an interest free loan.

United Housing is one of several Memphis agencies that help people apply.

"No monthly payment on your part and if you stay there for five years, everything that they paid out will be wiped clean," explains Bolding.

Eugene Thomas heard about the Hardest Hit Fund at the unemployment office, a place the solider turned contractor never imagined he would be, "I purchased my home in Memphis in '07 with the understanding that Memphis was the logistical hub to the world, and by me being logistics I would always be employed." 

Thomas applied for HHF  in April. We met him one week after closing in August.
His response after getting the phone call, "I could breathe, I was like wow, okay!"

However, it hasn't been as easy for everyone who applies.

In late July, a government report blasted the program for not helping enough homeowners.

At the end of its first year, in 2011, HHF had only used 3% of the money. Tennessee got around $217 million and so far has only committed around $50 million.

We met Barry and Mary Ford this summer and followed them through the process.  
They found out they are not eligible because neither of their names are on the mortgage. "Boom, another brick wall," exclaims Barry!

Mary's a widow and getting her name on the loan in place of her late husband has proven to be a barrier, first for a modification and now the Hardest Hit Fund.
"You're not eligible for income reasons, you're not eligible because her name's not on the loan, it's not your loan, you're not eligible because we don't participate in that program. Wow, after a while, you just want to give up," adds Barry.

Some people do. The sheer volume of paperwork keeps lots of folks out of the program.  

Plus, early on, applicants had to be caught up on their mortgage payments.

That requirement has since been dropped.

Another problem, not enough people know about it.

"My mortgage company did not tell me about the Hardest Hit Fund and that surprises me," Moss says.

"Has it gone fast enough, no. Are there a lot more people that could be helped, yes," says Bolding.

Administrators at the Tennessee Housing Development Agency, the group in charge of disbursing the funds, say they know they have to close on more loans every month over the next two years in order to get rid of the money by 2017.

Unfortunately, it could be too little, too late for the Fords.

The company that now services their mortgage, Ocwen, put off one sale date after WREG On Your Side Investigators called and asked why it was so tough just to get someone on the phone.

Even in the face of foreclosure, though, the Ford's refuse to give up. "They'll knock on my door, you have to go. Until that time comes, I'm right here," Mary says.

While Moss and Thomas are fortunate to still be in their homes, they both say it's just the beginning on what will be a long road to recovery.

"It's taken care of, but it's not really taken care of because it's still my responsibility," Thomas says.

"I love my home, I didn't want to lose my home and to think that now I've got a good 18 months to find a job and find some way to be able to pay for the house," adds Moss.

There's good news for others who want to apply for the Hardest Hit Fund.  THDA has increased the possible loan amount to $40,000 and it's now available for residents in every county. Plus, if you lost income due to medical reasons, divorce or death of a spouse, you're now eligible to apply. 

THDA officials say they plan to commit all the funds by 2014 and have them disbursed by 2017, so if you want to apply, don't wait.

Click here to apply in Tennessee. 

Mississippi residents are also eligible for funds in their state. 

Go here for more details.