SIGTARP-18-001 October 13, 2017

OFFICE OF THE SPECIAL

INSPECTOR GENERAL FOR

THE TROUBLED ASSET

RELIEF PROGRAM

SIGTARP OFFICE OF THE SPECIAL

INSPECTOR GENERAL FOR

THE TROUBLED ASSET

RELIEF PROGRAM

Audit Report

Mismanagement of the Hardest Hit 

Fund in Georgia
SIGTARP-18-001 October 13, 2017

Office of the special inspector general

For the Troubled Asset Relief Program 

1801 L Street, NW, 4th Floor

Washington, D.C. 20220

MEMORANDUM FOR: Honorable Steven T. Mnuchin – Secretary of the Treasury

/signed/

FROM: Honorable Christy Goldsmith Romero – Special Inspector General 

for the Troubled Asset Relief Program

SUBJECT: Mismanagement of the Hardest Hit Fund in Georgia

(SIGTARP 18-001)

We are providing this report for your information and use. SIGTARP found that the Georgia 

agency mismanaged the Hardest Hit Fund.

The Office of the Special Inspector General for the Troubled Asset Relief Program conducted 

this audit (engagement code 034) under the authority of the Emergency Economic Stabilization 

Act of 2008, which also incorporates certain duties and responsibilities of inspectors general 

under the Inspector General Act of 1978, as amended.

We considered comments from the Department of the Treasury when preparing the report. 

Treasury’s comments are addressed in the report, where applicable, and a copy of Treasury’s 

response is included in its entirety. 

We appreciate the courtesies extended to our staff. For additional information on this report, 

please contact me at any time.
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Table of Contents

Table of Contents................................................................................................................ i

Executive Summary ........................................................................................................... 1

Background ........................................................................................................................ 5

SIGTARP Found That the Hardest Hit Fund Did Not Meet the Urgent Local 

Needs Affecting the Housing Recovery of Georgia Homeowners Living in 

DeKalb, Clayton, and Fulton Counties........................................................................ 7

Homeowners in DeKalb, Clayton, and Fulton Counties—Counties that Include 

Atlanta and Its Suburbs—are the People the Hardest Hit Fund was Intended 

to Assist..................................................................................................................... 7

The Georgia Agency’s Ineffectiveness Is Particularly Acute in Meeting the Local 

Needs Impacting Housing Recovery for Hard-Hit Neighborhoods in AtlantaBased Counties ......................................................................................................... 9

The Georgia Agency Can Be Improved with More Outreach in 16 Hard-Hit 

Neighborhoods in DeKalb, Clayton, and Fulton Counties, and in Other HardHit Neighborhoods in Georgia ................................................................................... 9

Nearly Two of Every Three Homeowners in DeKalb, Clayton, and Fulton 

Counties Who Applied for the Hardest Hit Fund Were Turned Away, a Rate 

that Must Be Improved to Meet Local Needs........................................................... 10

8 Out of 10 Clayton County Residents and Nearly 8 Out of 10 DeKalb County 

Residents the Georgia Agency Turned Away Earned Less Than $30,000 

(and Most Earned Less Than $20,000)...................................................................... 13

The Georgia Agency Failed to Provide HHF Assistance to Underwater 

Homeowners for 6 Years When Other State Agencies Were Already 

Providing That Assistance......................................................................................... 15

The Georgia Agency Does Not Report County-Level Information, Limiting 

Transparency, Accountability, and the Ability to Take Urgent Action to 

Increase HHF’s Effectiveness.................................................................................... 17

SIGTARP Found that Statewide the Georgia Agency Mismanaged the Hardest 

Hit Funds by Withholding Funds from Georgia Homeowners, and Turning 

Away Two of Every Three People, While Keeping $32 Million for Itself................. 19

The Georgia Agency Mismanaged the Program by Failing to Respond to Urgent 

Needs, Instead Withholding These Foreclosure Prevention Funds from 

Georgians................................................................................................................ 19

The Georgia Agency Turned Away Two-Thirds of the 29,750 Georgians Who 

Applied—One of the Highest Rates in the Program ................................................ 20

The Georgia Agency’s Low Performance Caused Georgia Homeowners to Lose 

Access to $33.5 Million in New Funding.................................................................. 22
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After Losing Access to an Additional $33.5 Million in 2016, the Georgia Agency 

Took Action to Shutter Its Main HHF Program for Unemployed and 

Underemployed Homeowners, and Move the Money, Including Moving $15 

Million to Homebuyers ............................................................................................. 22

Despite Withholding Hardest Hit Funds from Homeowners, the Georgia Agency 

Continued to Keep Hardest Hit Funds for Itself ....................................................... 23

3 Out of Every 4 Georgians Turned Away by the State Agency Earned Less 

Than $30,000 Per Year, Most Earning Less Than $20,000, While Millions of 

TARP Dollars Sat Idle ................................................................................................. 24

The Georgia Agency Turned Away More Than 2,300 Veterans Who Applied for 

Hardest Hit Funds—71% of Veterans Who Applied—While Millions of TARP 

Dollars Sat Idle............................................................................................................ 25

The Georgia Agency Mismanaged its Largest HHF Unemployment Program by 

Designing Overly Strict and Unnecessary Criteria That Made It Harder for a 

Georgia Homeowner to Receive This Assistance Than Homeowners in 

Other States ................................................................................................................ 29

The Georgia State Agency Mismanaged the Program by Failing to Fix a 

Confusing Application Process, and Requiring Unnecessary Red Tape .............. 39

The Online Application Is Confusing and Difficult to Navigate ...................................... 39

The Georgia Agency Set an Artificial and Unnecessary 30-Day Window for a 

Homeowner to Complete Their Application and Provide Documents ...................... 40

The Georgia Agency Requires Unnecessary Red Tape ............................................... 41

Offering Personalized Support During the HHF Application Process Can Help 

Provide HHF Assistance to Struggling Georgia Homeowners................................. 43

The Georgia Agency Mismanaged the Program by “Guarding” These Funds 

and Placing “Precautions” So Only Its Version of a Responsible 

Homeowner Would Receive It, Rather Than Hard-Hit Georgians ........................... 46

Treasury Mismanaged HHF in Georgia by Failing to Hold the Georgia Agency 

Accountable for Meeting Targets .............................................................................. 48

Conclusion........................................................................................................................ 50

Recommendations ........................................................................................................... 56

Management Comments and SIGTARP’s Response..................................................... 59

Appendix A—Objective, Scope, and Methodology ....................................................... 60

Limitations on Data ....................................................................................................... 61

Use of Computer-Processed Data ................................................................................ 61

Internal Controls............................................................................................................ 61

Prior Coverage.............................................................................................................. 61

Appendix B—Management Comments .......................................................................... 63
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Executive Summary

SIGTARP conducted this audit upon request by Congressman John Lewis.

SIGTARP found that TARP’s Hardest Hit Fund (HHF) program has not 

adequately served those most in need in Georgia counties in 

Congressman Lewis’ district in Atlanta and surrounding areas.

The Georgia Department of Community Affairs (the Georgia agency) has 

consistently ranked among the least effective state agencies in the nation 

in disbursing Hardest Hit Funds to homeowners. In 2010, it told Treasury 

that it planned to distribute Hardest Hit Funds to 18,625 homeowners 

(9,000 homeowners in the first year, and 9,500 homeowners in the 

second year). But it has taken more than 6 years for the Georgia agency to

provide Hardest Hit Funds to 9,061 Georgia homeowners.1 The Georgia 

agency has provided less than half of the available dollars ($173.8 million

out of $370.1 million) to homeowners. 

The problem was not a lack of need. Many Georgia communities have 

experienced slow recovery from the housing crisis, including DeKalb, 

Clayton, and Fulton counties. Neighborhoods in these counties like Forest 

Park, Lakewood Heights, and Lithonia have been the subject of 

nationwide and local reporting on pervasive poverty and an uneven

housing market.

The problem was also not a lack of interest. There were 29,750 Georgians 

who applied. However, the Georgia agency turned away two-thirds

(20,051 of 29,750) of Georgians who applied, one of the worst rates 

nationwide. The Georgia agency turned away 6,200 people living in 

DeKalb, Clayton, and Fulton counties, counties that throughout these 6-

plus years experienced high numbers of foreclosures, mortgage 

delinquencies, and underwater homes, coupled with above-average 

unemployment, and Georgia has above-average underemployment. All 

three counties have above-average poverty rates.

Many hard-hit Georgians applied. Three out of every four Georgians the 

Georgia agency turned away earned less than $30,000, and most earned 

less than $20,000.2 In Clayton County, 8 of every 10 people the Georgia 

agency turned away earned less than $30,000. In DeKalb County, nearly 8 

 1 As of March 31, 2017, the latest data available as of the drafting of this report.

2 The Georgia agency denied 11,922 people, and 8,129 people had withdrawn applications. A senior official 

with the Georgia agency told SIGTARP that 99% of withdrawn applications were withdrawn by the agency.

The Georgia agency withdraws a homeowner’s application if the homeowner does not provide all 

documents in 30 days or less. Throughout this report, SIGTARP combines denied homeowners and 

withdrawn homeowners under those “turned away.” The other 1% of applications was withdrawn by the 

homeowner. This can be an indication of overly strict program criteria or a burdensome application 

process.
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of every 10 people the Georgia agency turned away earned less than 

$30,000. Most turned away in these counties earned less than $20,000.

The Georgia agency also turned away 71 percent of all veterans who 

applied, despite Georgia having one of the largest military populations in 

the country.

The problem SIGTARP found was that the Georgia agency mismanaged 

the Hardest Hit Fund. The Government Accountability Office (GAO)

defines mismanagement as “creating substantial risk to an agency’s 

ability to accomplish its mission.” The mission of HHF is to preserve 

homeownership. The mission is accomplished by state housing finance 

agencies (HFAs), like the Georgia agency, providing aid to families 

through local programs tailored to the urgent needs of the communities.

The Georgia agency’s mismanagement of HHF included that it:

• Failed to act with urgency in distributing this Federal aid, and 

withheld it from Georgians. The Georgia agency did not meet its 

own target of providing assistance to 18,500 Georgians in the first 

2 years (by September 2012). Instead, after 2 years (as of 

September 30, 2012), the Georgia agency provided this aid to less 

than 10% of that target—assisting only 1,708 homeowners. The 

Georgia agency slow walked this aid to Georgians over the years, 

meeting less than 50% of its own target as of March 31, 2017, the 

latest data available during the drafting of this report.

• Designed overly strict criteria not required by Treasury or used 

by other state agencies in HHF that did not reflect the local 

conditions of most Georgians. For example, when in 2012 the 

Georgia agency required that a homeowner be no more than 

6 months delinquent on their mortgage to qualify, people all but 

stopped applying. This, and other overly strict criteria, makes it 

harder for a Georgia homeowner to obtain this aid compared to 

homeowners in other states.

• Failed to eliminate overly strict criteria despite repeated 

warnings and recommendations. The Georgia agency was 

repeatedly warned by SIGTARP (25 times in 5 years) about its 

severe underperformance in the program, and by Treasury (in 

2012). Congressman Lewis, Congressman Henry “Hank” Johnson, 

and local non-profit groups recommended dropping strict criteria 

that did not match the reality facing many Georgians.

• Required significant red tape, had a confusing online 

application, provided very little in-person help to apply, and 

had burdensome document requirements. More than 8,000
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Georgians could not provide burdensome documents like 4 

years of tax transcripts stamped by the IRS, and 2 years of 

payment history generated by their mortgage servicer within 30 

days, so the Georgia agency withdrew their HHF application. 

The Georgia agency limited distributing HHF aid to only those whom it 

viewed as being “responsible” homeowners. The Georgia agency added 

more limitations and red tape than Treasury required or that existed for 

homeowners in other states for these same funds, putting Georgians at a 

disadvantage. This program lost a significant opportunity to fulfill its 

mission to preserve homeownership in Georgia. Georgia has been slow to 

recover from the crisis, particularly in DeKalb, Clayton, and Fulton 

counties. HHF did not adequately address the housing needs in these 

communities, which could have sped up recovery.

SIGTARP found that Treasury also mismanaged HHF by failing to hold the 

Georgia agency accountable to the Georgia agency’s target or to 

Treasury’s own target of funding 250 new homeowners each month.

Despite severe underperformance by the Georgia agency, including a 

failure to meet these targets, Treasury continued to fund the Georgia 

agency’s $12 million in salaries and $20 million in other administrative 

expenses.

The Georgia agency set a very high bar for Georgians to receive Hardest 

Hit Funds, and a very low bar for itself to receive these funds. The Georgia 

agency's track record is so poor that while other states took advantage of 

an additional $2 billion that Congress approved starting in 2016 for HHF, 

Treasury turned down Georgia for $33.5 million, out of concern that the 

Georgia agency would not spend the HHF dollars already set aside for 

Georgians.

The question SIGTARP was left with was, “what are they waiting for?” For 

many Georgians, it is too late for HHF to help. However, there is still an 

opportunity that should not be lost. SIGTARP makes 30 recommendations 

for improvement that are designed to stop the mismanagement, and can

change the course to distribute the remaining $164 million with urgency.3

If the Georgia agency reacts defensively to this report and sticks with the 

status quo, Georgians will continue losing out on a crucial aid that can 

speed their recovery from the housing crisis—aid that homeowners in 

other states have had access to for years. SIGTARP implores the state 

agency and Treasury to adopt these recommendations fully and 

immediately. 

 3 SIGTARP conducted this audit in accordance with GAO generally accepted government auditing standards.

For a complete discussion of the audit scope and methodology, see Appendix A.
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In response, Treasury said that HHF's structure has maximum 

flexibility including in the rate of disbursing funds. In 2012, Treasury set 

numerical targets for HHF disbursement in Georgia. Rather than hold the 

Georgia agency accountable to Treasury-set targets, Treasury continued 

to pay the Georgia agency nearly $32 million for salaries and other 

expenses. Treasury also responded saying that SIGTARP is 

recommending uniform eligibility criteria, which is not true. SIGTARP’s

recommendations are designed to hold the Georgia agency accountable to 

Treasury targets and stop mismanagement.
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Background

Then-President Obama announced a series of programs for “Responsible 

Homeowners” including TARP’s Making Home Affordable and TARP’s 

Hardest Hit Fund, which provides TARP dollars to the mortgage servicers 

of homeowners in 19 states.4 Making Home Affordable, a national 

program administered by Treasury, has provided TARP dollars to 80,026

Georgians. The President Obama White House described an irresponsible 

homeowner, stating, “The housing market suffered a dramatic collapse 

caused by irresponsible lenders who tricked buyers into signing 

subprime loans and in some cases irresponsible homeowners who took 

out loans they knew they could not afford.” Treasury capped both 

programs to houses with mortgages under the Government Sponsored 

Enterprise (GSE) conforming loan limit—$424,100 for a single-family

house in Georgia.5

The Obama White House promised the program would be under strict 

transparency and accountability. In 2011, Treasury Home Preservation 

Office Chief Phyllis Caldwell told SIGTARP that Treasury would evaluate:

“are we reaching the right number of people.” She said, “The HFAs set 

targets for the number of homeowners they plan to assist, if they didn’t 

reach the target, we’ll learn and adjust.” On April 12, 2012, SIGTARP 

issued an audit on the slow progress of distributing HHF to homeowners.

In that audit, SIGTARP recommended that Treasury set targets for the 

number of people to be helped, measure progress, and make changes if 

targets were not met, including putting the funds to better use.6 SIGTARP 

also recommended that Treasury develop an action plan for state 

agencies to increase the number of homeowners assisted.

The Georgia agency has a contract with Treasury to distribute 

$370.1 million in HHF to Georgia homeowners. When applying for the 

program in 2010, the Georgia agency estimated providing HHF aid to 

18,625 homeowners, most in the first 2 years as follows:

Year 1 9,000 homeowners assisted 

Year 2 9,500 homeowners assisted 

Year 3 50 homeowners assisted 

Year 4 50 homeowners assisted 

Year 5 25 homeowners assisted 

 4 See White House, Helping Responsible Homeowners, 

https://obamawhitehouse.archives.gov/economy/middle-class/helping-responsible-homeowners, 

9/21/2017. 5 In one Georgia County, Greene County, Georgia, the GSE conforming limit is $515,200.

6 See SIGTARP, Factors Affecting Implementation of the Hardest Hit Fund Program, April 12, 2012. 
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Treasury approved the Georgia agency’s application and HHF opened in 

Georgia in September 2010. The agency started with HHF 

unemployment/underemployment assistance, which was the only 

program until 2014, when the Georgia agency opened two small 

programs for reinstatement of past due amounts and a mortgage recast.

On April 9, 2012, three days before SIGTARP issued its audit and while 

Treasury had the draft report, Treasury implemented one of SIGTARP’s 

recommendations in the audit by issuing an Action Memorandum to the 

Georgia agency. At that point, the Georgia agency had distributed HHF aid 

to only 524 homeowners; far below the 9,000 homeowners it estimated 

assisting in the first year. Treasury set a target that the Georgia agency 

would fund 250 new homeowners per month.
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SIGTARP Found That the Hardest Hit Fund 

Did Not Meet the Urgent Local Needs Affecting 

the Housing Recovery of Georgia Homeowners 

Living in DeKalb, Clayton, and Fulton Counties

The Obama Administration announced that HHF would “help address 

urgent problems facing homeowners at the center of the housing crisis.”

There have been serious problems affecting housing recovery across 

pockets of Georgia, including in DeKalb, Clayton, and Fulton counties.

These problems continue today.

Homeowners in DeKalb, Clayton, and Fulton Counties—Counties 

that Include Atlanta and Its Suburbs—are the People the Hardest 

Hit Fund was Intended to Assist

Georgians in these three counties were at the center of the housing crisis

and have remained there, while many other homeowners across the 

nation have recovered. According to CoreLogic, since September 2008, 

95,232 homeowners in these three counties lost their homes to 

foreclosure—nearly one quarter of all Georgia foreclosures.

Public Broadcasting Atlanta’s Kate Sweeney reported in March 2016, 7

that between 2000 and 2013, poverty in Atlanta’s suburbs had the 

highest rate of change of any metro region of its size:

 7 Kate Sweeney, “Suburban Poverty: Atlanta’s Hidden Epidemic,” WABE, March 28, 2016, 

http://news.wabe.org/post/suburban-poverty-atlantas-hidden-epidemic, accessed 9/12/2017. 
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Figure 1: Atlanta Metro Area

Source: 

http://mediad.publicbroadcasting.net/p/wabe/files/styles/x_large/public/201603/atlantapoverty_brookingsgraph

2_032516.jpg, accessed 9/12/2017.

While there has been some improvement in Atlanta, recovery has been 

slower than in many other cities. Recent data shows a continuing need for 

HHF in these three counties. As of March 31, 2017, around 22,000 DeKalb, 

Clayton, and Fulton County homeowners are behind on their mortgage 

payments (9,495 DeKalb homeowners, 3,666 Clayton homeowners, and 

9,038 Fulton homeowners). More than 8,000 Georgians in these counties 

are 3 months behind on their mortgages. Residents of these three 

counties also continue to suffer from above-average unemployment, and 

Georgia has above-average underemployment.8 All three counties have 

above average poverty rates.

Year after year, the Georgia agency ranked among the least effective state 

agencies in disbursing Hardest Hit Funds to homeowners to preserve 

homeownership—the goal of the program.9 The Obama White House 

promised hard-hit homeowners help through this program, announcing, 

“This new innovation fund will help housing finance agencies in the 

hardest-hit areas and localities further respond to the most pressing

 8 Clayton County has a 5.9 percent unemployment rate compared to the national 4.5 unemployment rates.

DeKalb County and Fulton County also have above average unemployment rates at 4.9 percent each. 9 Phyllis Caldwell, Treasury’s Chief of the Home Preservation Office, told SIGTARP in a 2011 interview that the 

goal of the program is “preserving homeownership.” 
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problems in their communities.” Rather than respond to the most 

pressing problems of their communities, the Georgia agency has 

consistently turned away homeowners at one of the highest rates in the 

nation. As a result, almost half of the available funds are unspent after 6 

years. Seven other state agencies closed their programs to new 

homeowners years ago because the funds were already scheduled to be

distributed.

The Georgia Agency’s Ineffectiveness Is Particularly Acute in 

Meeting the Local Needs Impacting Housing Recovery for 

Hard-Hit Neighborhoods in Atlanta-Based Counties

Those most in need of HHF assistance in these counties include those in 

16 hard-hit neighborhoods that have and continue to experience high 

levels of poverty, low median house values, and/or above-average 

unemployment or underemployment, but have low levels of homeowners 

who received Hardest Hit Funds. Some of these neighborhoods have 

predominantly minority residents. These 16 hard-hit neighborhoods 

include Forest Park (zip code 30297), Conley (zip code 30288), Lakewood 

Heights and nearby neighborhoods in south Atlanta (zip code 30315), 

Atlanta neighborhoods of Washington Park, Dixie Hills, Bankhead, Grove 

Park, Westview, Penelope (zip code 30314), Jonesboro (zip code 30238), 

Rex (zip code 30273), Riverdale (zip code 30274), Decatur (zip code 

30032), Lithonia (zip codes 30038 and 30058), Stone Mountain (zip code 

30088), Ellenwood (zip code 30294), Fairburn (zip code 30213), Union 

City (zip code 30291), West End of Atlanta (zip code 30310), and East 

Point (zip code 30349).10 

The Georgia Agency Can Be Improved with More Outreach in 16 

Hard-Hit Neighborhoods in DeKalb, Clayton, and Fulton 

Counties, and in Other Hard-Hit Neighborhoods in Georgia

The Georgia agency should conduct more outreach through in-person 

events in these 16 hard-hit neighborhoods. In July 2011, Congressman 

Lewis raised concerns to the Georgia agency about “ineffective 

constituent outreach.” In 2012, Treasury told the Georgia agency that it 

needed to “better target marketing and outreach efforts.” The Georgia 

agency then held two in-person events to assist with applications in 

Atlanta in the fall of 2012, and an event in Lithonia sponsored by 

Congressman Henry “Hank” Johnson in December 2012. The Georgia 

agency held only limited in-person outreach events in the 16 hard-hit 

neighborhoods. Instead, the Georgia agency relied heavily on its website. 

 10 Some neighborhoods, including East Point and Riverdale, cross more than one zip code.
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A Georgia agency official told SIGTARP that, following a local television 

story, the number of applications shot up, showing that marketing and 

outreach can increase the effectiveness of the program. However, this 

was not followed up with sustained efforts by the Georgia agency to 

conduct outreach in the hard-hit neighborhoods in these three counties.

Despite the fact that $164 million in the Hardest Hit Fund remains 

available for Georgia homeowners, the Georgia agency’s marketing and 

outreach employee position has been vacant since October 1, 2016. The 

head of the Georgia HHF program told SIGTARP that the agency has no 

plans to fill the position, despite $164 million remaining to be distributed.

Treasury should require the Georgia agency to increase in-person outreach

events in hard-hit neighborhoods, including public service advertisements 

on television and the radio, as well as billboards and in-person events in

hard-hit neighborhoods throughout Georgia. 

Nearly Two of Every Three Homeowners in DeKalb, Clayton, and 

Fulton Counties Who Applied for the Hardest Hit Fund Were 

Turned Away, a Rate that Must Be Improved to Meet Local 

Needs

The Georgia agency provided Hardest Hit Funds to 3,316 residents of 

these counties, but turned away nearly two-thirds (6,200) of the 9,516 

residents of these counties who applied.11 The Georgia agency turned 

away 2,476 DeKalb County residents, 2,342 Fulton County residents, and 

1,382 Clayton County residents who applied, according to records the 

Georgia agency provided to SIGTARP. Some examples of hard-hit 

neighborhoods in these counties include:

Forest Park

Forest Park is a neighborhood in Clayton County, Georgia, that is 5 miles 

east of the airport and was the site of Fort Gillem, an Army base that 

closed in September 2011. Forest Park is near Clayton State University, 

and has one of the largest farmers markets in the country, which is a 

major distribution hub for produce. Forest Park was the subject of a 

December 28, 2015, Washington Post story, “A lonely road: For the poor 

in the Deep South’s cities, simply applying for a job exposes the barriers 

of a particularly pervasive and isolating form of poverty.”12 Median 

 11 According to the 2015 census, there are 734,871 people living in DeKalb County, 1,010,562 people living in 

Fulton County, and 273,955 people living in Clayton County. The Georgia agency provided Hardest Hit 

Funds to 673 people in Clayton, 1,379 people in DeKalb, and 1,264 people in Fulton. 12 Michael S. Williamson, “A lonely road: For the poor in the Deep South’s cities, simply applying for a job 

exposes the barriers of a particularly pervasive and isolating form of poverty,” Washington Post, December 
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household income is $31,228, and the median house value is $54,100.

Almost every child (99.6%) is eligible for free or reduced lunch. In Forest 

Park, one of every three residents lives in poverty, but the Georgia agency 

turned away 50 of the 78 people living in Forest Park or surrounding 

neighborhoods in the same zip code who applied for the Hardest Hit Fund.

Conley

The small community of Conley is near Forest Park. Median household 

income is $32,132, and the median house value is $53,500. Almost every 

child (99.5%) is eligible for free or reduced lunch. Although there are a 

number of trucking companies near Conley, the neighborhood has 

above-average unemployment. In Conley, about one out of every three 

residents lives in poverty, but the Georgia agency turned away 52 of the 81

people living in Conley or surrounding neighborhoods in the same zip code 

who applied to HHF.

Lakewood Heights

Lakewood Heights is a south Atlanta suburb in Fulton County that was 

the subject of a May 9, 2015, PBS special, “Here’s What Concentrated 

Poverty Looks Like in South Atlanta.”13 This is a hard-hit neighborhood 

that housed General Motors workers until GM closed the plant in 1990. It 

was home to the car racing circuit at Lakewood Speedway until it closed 

in 1979. Today it is home to the Screen Gems Studios & Lakewood 

Amphitheater. Around thirty percent of residents in Lakewood Heights

live below the poverty line, which is higher than the national average of 

14.7%. Vacant houses are a characteristic of the neighborhood with a 

38% vacancy rate. Median household income is just over $25,000. The 

median real estate price is $97,576. The Lakewood Heights neighborhood 

has more single mother households than 96.6% of the neighborhoods in 

the United States. There are more people who ride the bus in this 

neighborhood each day to get to work than 97.4% of U.S. neighborhoods, 

and 92% of students are eligible to receive free or reduced lunch. The 

Georgia agency turned away 69 of the 110 people living in Lakewood 

Heights and surrounding neighborhoods in the same zip code who applied 

for the Hardest Hit Funds.

 

28, 2015, http://www.washingtonpost.com/sf/business/2015/12/28/deep-south4/?utm_term=.e342a5e1e165, accessed 9/13/2017. 13 Ivette Feliciano, “Here’s what concentrated poverty looks like in South Atlanta,” Public Broadcasting 

System, May 9, 2015, http://www.pbs.org/newshour/updates/heres-concentrated-poverty-looks-likesouth-atlanta/, accessed 9/13/2017.
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Lithonia

Lithonia is a hard-hit neighborhood in DeKalb County that was the 

subject of a June 23, 2015, Wall Street Journal story, “Why the U.S. 

Housing Recovery is Leaving Poorer Neighborhoods Behind.”14 Lithonia,

with its rock quarries and 40,000 acres of the Arabia Mountain National 

Heritage Area, is called the “City of Granite.” Lithonia is a small, lowerincome, working-class suburb that prides itself on being “faith-based.”15

The Wall Street Journal reported on June 23, 2015, that poorer towns 

such as Lithonia are stuck with a housing crisis that drags on, calling it an 

“uneven market.” Lithonia suffers from boarded-up homes, and had 6,079

foreclosure sales in 7 years—the 3rd highest in Georgia. There are 2,502 

Lithonia residents with delinquent mortgages. The Wall Street Journal

reported that roughly 10,000 homeowners in Lithonia owe more than 

their house is worth. The Georgia agency turned away 780 of 1,256 people 

living in Lithonia and surrounding neighborhoods in the same zip codes

who applied for the Hardest Hit Fund.

Jonesboro

Jonesboro in Clayton County is said to be the town portrayed in Gone with 

the Wind. Unemployment is above average, and almost every child 

(99.7%) qualifies for free or reduced lunch. Jonesboro had 2,966 

foreclosure sales over the last 7 years. The Georgia agency turned away

227 of the 341 people living in Jonesboro who applied for the Hardest Hit 

Fund.

* * *

The Georgia agency turned away two-thirds of people from these 16 

hard-hit neighborhoods that applied for Hardest Hit Funds. HHF lost an 

opportunity to speed these neighborhoods’ recovery from the housing 

crisis. It is too late for HHF to help those homeowners who lost their 

homes. However, with $164 million available, and a continuing great 

need, there is still an opportunity. Stopping mismanagement will require 

major changes from turning away two-thirds of all who apply to instead 

accepting at least two-thirds of all who apply.

Treasury and the Georgia agency should take steps to increase the 

percentage of applicants receiving Hardest Hit Funds to at least two-thirds 

of all who apply.

 14 Joe Light, “Why the U.S. Housing Recovery is Leaving Poorer Neighborhoods Behind,” Wall Street Journal, 

June 23, 2015, https://www.wsj.com/articles/in-u-s-poorer-areas-have-yet-to-see-housing-rebound1435091711, accessed 9/14/2017.

15 See http://www.cityoflithoniaga.org, accessed 9/18/2017.
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SIGTARP-18-001 13 October 13, 2017

8 Out of 10 Clayton County Residents and 

Nearly 8 Out of 10 DeKalb County Residents 

the Georgia Agency Turned Away Earned Less 

Than $30,000 (and Most Earned Less Than 

$20,000)

SIGTARP found that it was very difficult for people living in DeKalb, 

Clayton, and Fulton counties to obtain Hardest Hit Funds, despite these 

counties experiencing high unemployment, foreclosures sales, mortgage 

delinquencies, and underwater homes. All three counties have above 

average poverty rates. For example, the 16 hard-hit neighborhoods 

experienced high foreclosures sales, mortgage delinquencies (as high as 

20%), and underwater homes (on average 27%). As reflected in Figure 2, 

large percentages of those who were turned away lived on a limited 

income.

Figure 2. Percentage of Georgia’s Hardest Hit Fund Applicants Denied or Withdrawn Who 

Earned Less than $30,000

Source: SIGTARP analysis of applicant data provided by the Georgia agency.

According to the records the Georgia agency provided to SIGTARP, in 

Clayton County, 8 out of 10 (81%) of the 1,382 people turned away by the 

Georgia agency earned less than $30,000 per year (957 of them earned 

less than $20,000). DeKalb County had similar results. Nearly 8 out of 10 

(77%) of the 2,476 people turned away by the Georgia agency earned less 

than $30,000 per year (1,626 applicant earned less than $20,000). In 

Fulton County, 3 out of 4 (75%) of the 2,342 people turned away by the 

Georgia agency earned less than $30,000 per year (1,512 applicants 

earned less than $20,000).
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SIGTARP-18-001 14 October 13, 2017

Treasury and the Georgia agency should change the Hardest Hit Fund in 

Georgia to increase the percentage of homeowners with limited incomes in 

hard-hit counties who qualify.
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SIGTARP-18-001 15 October 13, 2017

The Georgia Agency Failed to Provide HHF 

Assistance to Underwater Homeowners for 6 

Years When Other State Agencies Were 

Already Providing That Assistance 

The Georgia agency’s failure to provide HHF assistance to underwater 

homeowners who owe more than their house is worth (also called 

“negative equity”), when other state agencies in HHF were providing that 

assistance, undercut the effectiveness of the program’s ability to address 

local needs of Georgian communities. Georgia has experienced one of the 

highest levels of underwater homeowners in the nation, and it has been a 

contributing factor to Georgia’s slow recovery from the crisis.16 As of 

March 31, 2017, there were 101,734 Georgians who owed more than 

their house was worth, including 34,583 Georgians living in DeKalb

(13,513), Fulton (18,782), and Clayton (2,288) counties.

Non-profits and even a senior Treasury official suggested that the Georgia 

agency expand HHF assistance to underwater homeowners as early as 

2013. In 2013, the Atlanta Legal Aid Society, Inc. and the Georgia state 

Senate recommended an HHF underwater program. On March 17, 2015, 

the then-Chief of Treasury’s Home Preservation Office said on a panel at a 

conference in Atlanta with the Executive Director of the Georgia agency, 

“In a state like Georgia, which still has significant negative equity, has 

unemployment above the national average, there seems to be 

opportunities here to... get more payment relief to folks.”17 A non-profit,

Georgia ACT, in January 2016 also recommended underwater assistance.

In August 2016, the Georgia agency shifted money from the main HHF 

program for unemployed/underemployed homeowners, the Mortgage 

Payment Assistance program, and its reinstatement assistance program 

to make up to $113 million in funding available for a new HHF program 

for underwater homeowners—a move long overdue given that other 

state agencies in HHF had been providing this assistance for years. As 

soon as the program opened, there was a flood of applications, including 

in DeKalb, Clayton, and Fulton counties. The Deputy Commissioner of the 

Georgia agency reportedly told the press, “Not surprisingly, there has 

 16 As of the first quarter of 2016, Atlanta, Georgia had the fourth-highest negative equity rate (16.6%) of all 

U.S. metropolitan areas, only surpassed by Chicago, Illinois (20.3%); Las Vegas, Nevada (20.2%); and 

Baltimore, Maryland (17.2%). 17 See Piece by Piece, Underwater Atlanta, Helping Underwater Homeowners – Moderated Panel Discussion, 

Q&A. March 17, 2015, http://www.piecebypieceatlanta.org/events/ua/audio/5-

Helping%20Underwater%20Homeowners%20-%20Panel%20-%20PBP%20-%203-17-15.mp3, accessed 

10/5/2016.
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SIGTARP-18-001 16 October 13, 2017

been a huge response from metro (Atlanta) counties where there’s a 

concentration of underwater homes.”18

Despite finally providing HHF underwater assistance, the Georgia agency 

has not been effective in distributing this HHF aid. The Georgia state 

agency has provided HHF underwater assistance to only 5% of Georgians 

who applied (460 out of 9,117) as of March 31, 2017. Thousands of 

remaining homeowners (89%) still await a decision and the state agency 

has only begun to review an additional 659 homeowner applications.

SIGTARP found that the criteria for the program are overly strict, and do 

not reflect the reality of many Georgians. For example, the homeowner 

had to have purchased their home before January 1, 2012, and the 

homeowner must be less than 90 days delinquent. Also, unlike in other 

HHF states, such as Florida, Michigan, California, and North Carolina, the 

Georgia agency does not require the mortgage company to modify the 

homeowner’s mortgage payment through a recast of the principal balance 

after receiving HHF assistance. The lack of a recast could lead to 

homeowners paying more each month for their house. Treasury can help 

with dealing with mortgage servicers.

Treasury should direct the Georgia agency to eliminate criteria for 

underwater assistance that the home had to be purchased prior to 2012, 

and that a homeowner cannot be more than 90 days delinquent.

Treasury should work with mortgage servicers to ensure homeowners’ 

mortgages are recast after they receive Hardest Hit Funds to reduce their 

principal balances.

 18 Mike Kanell, “Underwater mortgage, want help? You’re not alone in Atlanta – or Georgia,” The Atlanta 

Journal-Constitution, September 30, 2016, http://www.ajc.com/business/underwater-mortgage-wanthelp-you-not-alone-atlanta-georgia/ZIoTu87ezXAl2F8aVTa8DJ/, accessed 9/18/2017.
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SIGTARP-18-001 17 October 13, 2017

The Georgia Agency Does Not Report 

County-Level Information, Limiting 

Transparency, Accountability, and the Ability to 

Take Urgent Action to Increase HHF’s 

Effectiveness

SIGTARP found that Treasury and the Georgia agency should have taken 

more urgent action to understand the slow housing recovery in Atlantabased counties and tailor the program to address those local needs. The 

Hardest Hit Fund can be improved through assessing program 

performance on a county level and tailoring the program to fit countylevel needs. In October 2015, SIGTARP issued an audit finding a lack of 

transparency and accountability with the lack of county-level reporting to 

Treasury and to the public in all 19 HHF states. The only county-level 

information that the Georgia agency reports to Treasury is how many 

people per county have participated in each HHF program (1,371 in 

DeKalb, 672 in Clayton, and 1,251 in Fulton), not how many people were 

turned away. SIGTARP recommended in October 2015:

To give Treasury insight into areas to improve the effectiveness of the 

Hardest Hit fund on an urgent basis, Treasury should require each state 

housing finance agency to report county-level data for all HHF 

programs and individual state HHF programs on: the number of 

homeowners who have applied for HHF, the number of homeowners 

denied, the number of homeowners who withdrew their application 

after being approved for assistance, the number of homeowners who the 

state housing finance agency withdrew their application, the number of 

homeowners whose applications are in process, and the median number 

of days to process homeowner applications. Treasury should require this 

reporting on a quarterly and cumulative basis and post this information 

on its website for transparency and accountability.19

Treasury and state agencies in HHF did not implement SIGTARP’s 2015 

recommendation. As a result, HHF’s ability to address local conditions at 

the county level was impeded. The public, including members of 

Congress, should have ready access to county-level program data.

Treasury should require, for all Hardest Hit Fund state agencies, countylevel public reporting of performance, including all who applied and were 

denied or had withdrawn applications (breaking out the numbers of 

applications withdrawn by the state agency).

 19 See SIGTARP, Factors Impacting the Effectiveness of Hardest Hit Fund Florida, October 6, 2015.
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SIGTARP-18-001 18 October 13, 2017

Treasury and state agencies should conduct county-level analysis, and

implement steps resulting from that analysis, to increase the effectiveness of 

Hardest Hit Fund distribution to homeowners.
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SIGTARP-18-001 19 October 13, 2017

SIGTARP Found that Statewide the Georgia 

Agency Mismanaged the Hardest Hit Funds by 

Withholding Funds from Georgia Homeowners, 

and Turning Away Two of Every Three People, 

While Keeping $32 Million for Itself

The problems SIGTARP found with the Hardest Hit Fund in Georgia 

extend beyond the three counties to the entire state. SIGTARP found that 

the Georgia agency mismanaged the Hardest Hit Fund by withholding 

HHF dollars from Georgians and turning away two of every three 

Georgians who applied for HHF. GAO defines mismanagement as 

“creating a substantial risk to an agency’s ability to accomplish its 

mission.” The mission of this program is to preserve homeownership.

This mission is accomplished by state agencies providing aid to families 

through local programs tailored to the urgent needs of the communities.

Conversely, the mission is not accomplished if the state agency does not 

provide the aid. While some families received assistance, the Georgia 

agency did not provide this aid with any urgency, and did not provide it to 

enough families. SIGTARP was left with the question, “what were they 

waiting for?”

The Georgia Agency Mismanaged the Program by Failing to 

Respond to Urgent Needs, Instead Withholding These 

Foreclosure Prevention Funds from Georgians

The Georgia agency mismanaged HHF by creating a substantial risk to 

accomplishing its mission of preserving Georgia homeownership by 

failing to respond to urgent needs, instead withholding these foreclosure 

prevention funds from Georgia homeowners. In 2010, President Obama 

announced the program would address “urgent problems facing 

homeowners.” Treasury issued a 2010 press release announcing relief to 

struggling homeowners was coming “as soon as possible.” In August 

2010, the Treasury Assistant Secretary over TARP said, “we are 

committed to doing everything we can to immediately help those who are 

hurting the most during these tough times.” A Treasury spokesperson in 

March 2013 reportedly said, “We are all very committed to getting the 

assistance out the door as quickly as possible.”20

The Georgia agency slow walked this Federal aid, as shown in Table 1.

 20 See Yun Long, “Hardest Hit Fund slow to help distressed homeowners,” USA Today, March 15, 2013,

https://www.usatoday.com/story/money/business/2013/03/15/federal-mortgage-help/1990473/, 

accessed 9/21/2017.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 20 October 13, 2017

Table 1. Treasury’s Target of 250 Georgia Homeowners Assisted per Month, as of the April 2012 Action

Memorandum

Date

Georgia 

Agency’s 

Initial Target 

of Georgia

Homeowners

Assisted

Treasury’s 

Target of 

Georgia

Homeowners 

Assisted*

Georgia

Homeowners

Provided 

Hardest Hit 

Funds

9/30/11 9,000 NA 232

9/30/12 18,500 2,024 1,708

9/30/13 18,550 5,024 4,004

9/30/14 18,600 8,024 5,556

9/30/15 18,625 11,024 7,083

9/30/16 18,625 14,024 8,415

*The number of homeowners the Georgia agency would have assisted had it met Treasury’s target of assisting 250 new Georgia 

homeowners per month with the Hardest Hit Fund. At that time of Treasury’s Action Memorandum, the Georgia agency had most 

recently reported assisting 524 homeowners (as of December 31, 2011). 

Source: SIGTARP analysis of applicant data provided by the Georgia agency.

These results show that instead of providing HHF aid urgently, 

immediately, or as soon as possible, as Treasury said, the Georgia agency 

slow-walked the aid. In comparison, seven other state agencies closed 

their HHF programs in 2013 or 2014, estimating that they would 

distribute all HHF funding to homeowners. Georgians had an urgent need 

for this Federal aid given the local conditions they faced, and the fact that 

banks can foreclose on a Georgia homeowner quickly without having to 

go through the courts.

The Georgia Agency Turned Away Two-Thirds of the 29,750 

Georgians Who Applied—One of the Highest Rates in the 

Program

The Georgia agency mismanaged the program by turning away so many 

people, contrary to the urgent home preservation mission of HHF. As 

shown in Figure 3, 67% (20,051 of 29,750) of homeowners who applied 

were turned away for assistance. The Georgia agency turned away 

homeowners at one of the highest rates of any state agency.
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SIGTARP-18-001 21 October 13, 2017

Figure 3. Percentage of Applicants Not Provided Hardest Hit Funds

Source: SIGTARP analysis of data as of March 31, 2017 provided by the state agencies; Treasury data used for Nevada, Oregon, 

and Tennessee, which had not published updated state data as of the drafting of this report. 

Year after year, the Georgia agency turned away applicants at higher rates 

than other state agencies in the program, a fact known to the state 

agency. SIGTARP reported on the severe underperformance of the 

Georgia agency in comparison to other state agencies 25 times since April 

2012, and made recommendations to change. On March 27, 2013, 

Congressmen Lewis and Congressman Johnson, joined by 27 other 

Congressmen, sent a letter to President Obama expressing concern that 

after 3 years HHF had consistently failed to meet benchmarks. In that 

letter, the Congressmen requested that Treasury implement SIGTARP’s

recommendations, stating that these and other changes could expand 

program eligibility.21

Again, in March 2016, Congressman Lewis and 10 other Congressmen 

including Congressmen David Scott and Congressman Hank Johnson 

wrote to President Obama. They requested that the Hardest Hit Fund be 

redirected, given that the assistance had been provided to far fewer than 

half the applicants, and many had been denied or had their applications 

withdrawn. Rather than improve since that letter, in the past year, the 

Georgia agency denied homeowners at one of the highest rates in the 

nation.

 21 The Congressmen who signed the letter included Representative John Lewis, Representative Henry “Hank” 

Johnson, Representative Suzanne Bonamici, Representative Corrine Brown, Representative Andre Carson, 

Representative Kathy Castor, Representative John Conyers, Representative Danny Davis, Representative 

Ted Deutch, Representative Bill Enyart, Representative Raul Grijalva, Representative Ruben Hinojosa, 

Representative Rush Holt, Representative Barbara Lee, Representative Zoe Lofgren, Representative James 

McDermott, Representative Patrick Murphy, Representative Eleanor Holmes Norton, Representative 

Charles Rangel, Representative Loretta Sanchez, Representative Linda Sanchez, Representative Jan 

Schakowsky, Representative David Scott, Representative Terri Sewell, Representative Albio Sires, 

Representative Eric Swalwell, Representative Bennie Thompson, Representative Juan Vargas, and 

Representative Frederica Wilson.
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SIGTARP-18-001 22 October 13, 2017

The Georgia Agency’s Low Performance Caused Georgia 

Homeowners to Lose Access to $33.5 Million in New Funding

After December 2015, when Congress approved an additional $2 billion 

for the Hardest Hit Fund, Treasury denied the Georgia agency’s 

application for an additional $33.5 million. Treasury was concerned with 

the Georgia agency’s track record in not utilizing funds, low production in 

meeting Treasury-set targets, and inability to utilize the funding already 

available.

After Losing Access to an Additional $33.5 Million in 2016, the 

Georgia Agency Took Action to Shutter Its Main HHF Program for 

Unemployed and Underemployed Homeowners, and Move the 

Money, Including Moving $15 Million to Homebuyers

After Treasury turned down the Georgia agency for new funding, the 

Georgia agency then took action to shut down the main Mortgage 

Payment Assistance unemployment/underemployment program, rather 

than fix its mismanagement of the program. The Georgia agency had 

moved $15 million to a new down payment assistance program for 

homebuyers, and also shifted money to increase funding for a new 

underwater home program to $113 million. According to a senior Georgia 

agency official, because unemployment returned to pre-recession levels, 

the focus would be on underwater homes. While assistance for 

underwater homes is much needed and long overdue, housing conditions 

in Georgia are complex, and do not have a “one-size-fits-all” solution.

The local conditions in pockets across Georgia such as in DeKalb, Clayton, 

and Fulton counties show above-average unemployment and 

underemployment and, therefore, a continuing need for assistance to 

unemployed and underemployed Georgians. All three counties have 

above-average poverty rates. A surge of more than 700 homeowners 

applying for the unemployment/underemployment program before it 

closed to new applications on June 30, 2017, further evidences the 

continuing need for unemployment/underemployment assistance. The 

Georgia agency already made decisions on many of these applying 

homeowners, and is reviewing 442 homeowner applications.

The Georgia agency should change its process for the remaining 

homeowners who applied, and reassess homeowners recently turned away.

Before closing the Hardest Hit Fund’s unemployment/underemployment 

program, Treasury and the Georgia agency should review the Georgia 

counties that are continuing with above-average unemployment and 

underemployment, and re-allocate sufficient funds from other programs 
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 23 October 13, 2017

back to unemployment/underemployment assistance to address the local 

need in those counties.

Despite Withholding Hardest Hit Funds from Homeowners, the 

Georgia Agency Continued to Keep Hardest Hit Funds for Itself

While distributing less than 50% of available TARP dollars to 

homeowners, the Georgia agency kept for itself $32 million, which is 

about 70% of its administrative expense budget of $48 million. This 

includes $11.8 million for state agency employee salaries.

Despite setting a high bar for homeowners to obtain Hardest Hit Funds 

for housing expenses, the Georgia agency set a low bar for itself to obtain 

Hardest Hit Funds for its own administrative expenses.
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SIGTARP-18-001 24 October 13, 2017

3 Out of Every 4 Georgians Turned Away by 

the State Agency Earned Less Than $30,000 

Per Year, Most Earning Less Than $20,000, 

While Millions of TARP Dollars Sat Idle

According to the records the Georgia agency provided to SIGTARP, 75%

(14,977) of the people turned away for HHF earned less than $30,000 per 

year, as shown in Figure 4, and most of them (12,704) earned less than 

$20,000. 

Figure 4. 20,054 Georgians Turned Away From Hardest Hit Fund, Through March 31, 2017.

Source: SIGTARP analysis of applicant data provided by the Georgia agency.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 25 October 13, 2017

The Georgia Agency Turned Away More Than 

2,300 Veterans Who Applied for Hardest Hit 

Funds—71% of Veterans Who Applied—While 

Millions of TARP Dollars Sat Idle

Despite Georgia having one of the largest populations in the United States 

of military and veterans, the Georgia agency turned away 2,310 veterans, 

according to state agency records.22 That means the Georgia agency 

turned away 71% of the 3,248 veterans who applied for the Hardest Hit 

Fund.

Georgia has the sixth-largest population in the United States of active and 

reserve military members, a population of more than 88,000.23 According 

to the Georgia Department of Economic Development, “Georgia ranks 

fifth in the U.S. for total Department of Defense military, civilian directhire, reserve, and national guard employment. The Army employs 63 

percent of Georgia’s military personnel, while the Air Force employs 23 

percent, the Navy and Marine Corps employ 11 percent, and other 

defense activities employ 3 percent.”24 Georgia has 8 active military bases 

representing the Army, Navy, Air Force, and Marine Corps, and closed two 

bases, Fort McPherson (closed September 2011) and Fort Gillem.

 22 The Georgia agency denied 1,332 of these veterans for HHF, and an additional 978 veterans had withdrawn 

applications. 23 Governing.com/gov-data/military-civilian-active-duty-employee-workforce-numbers-by-state.html, as of 

May 31, 2016, accessed 9/15/2017. 24 See http://www.georgia.org/industries/defense/military-presence-georgia/, accessed 9/12/2017. 
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 26 October 13, 2017

Figure 5. Map of Military Bases in Georgia

Source: http://www.georgia.org/wp-content/uploads/2013/09/Military-Bases-Map.pdf, accessed 9/12/2017.

Of 2,310 applicant veterans turned away in Georgia, 250 lived in DeKalb 

County, 158 lived in Clayton County, and 196 lived in Fulton County, 

counties near Dobbins Air Force Base and the closed bases Fort 

McPherson and Fort Gillem. Of the Clayton County veterans who applied, 

70% were turned away. In DeKalb, 73% of veterans were turned away, 

and in Fulton, 63% of veterans were turned away. Some turned away 

lived in hard-hit communities. For example, the Georgia agency turned 
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 27 October 13, 2017

away 49 of the 72 veterans living in Lithonia who applied for Hardest 

Hit Funds. Veterans in the Forest Park and Conley neighborhoods near 

the closed Fort Gillem were turned away.

The Georgia agency also turned away veterans living near other bases.

Near Fort Stewart and Hunter Army Airfield, there were 156 veterans 

turned away by the Georgia agency out of 229 that applied. The Georgia 

agency turned away 118 veterans living near Fort Gordon, out of 151

veterans who applied. Of the 85 veterans living near Robins Air Force 

Base that applied, the Georgia agency turned away 67 veterans. Near Fort 

Benning, 54 of 72 veterans were turned away. There were 24 of 35 

veterans living near Marine Corp Logistics Base Albany turned away by 

the Georgia agency, and 19 of 25 veterans living near Moody Air Force 

Base were turned away. Finally, the Georgia agency turned away 14 of 19 

veterans living near King Bay Naval Submarine Base.

Foreclosure and mortgage delinquency have been a concern with military 

families. According to www.Military.com, a military and veteran online 

organization: 

Most military families that face foreclosure did not make bad choices.

There seems to be an assumption that anyone who chose an adjustable 

rate mortgage (ARM) made a huge mistake and should suffer the 

consequences. ARMs were "invented" by the mortgage industry in the 

late '70s and early '80s when 30-year fixed rates were above 15 percent 

and, today they work very well for thousands of families. In comparison 

to ARMs, VA loans had higher interest rates, thus higher monthly 

payments. They had significantly higher settlement costs due to the VA 

funding fees (2 percent - 3 percent of the loan amount), and in high-cost 

areas, they simply weren't an option as the maximum loan amounts 

were considerably lower than the cost of the average home. So the 3/1 

or 5/1 ARM made tons of sense for someone with three-year orders who 

would be waiting one year or more for base housing. So how did we get 

here? Well, it wasn't through thousands of "bad decisions." Military 

families need homes. Base housing and rentals are not always available 

or may not meet families' needs in terms of schools and other 

considerations.25

The Georgia agency did not adequately consider the local housing and 

employment conditions of veterans and civilians who work on bases. For 

example, a base closure impacts jobs and real estate values, and that is

not the fault of homeowners. When Fort McPherson, near the East Point 

neighborhood in southwest Atlanta, closed in September 2011, the base 

 25 See Joe Gladden, “More on the Foreclosure Problem,” Military.com. 

http://www.military.com/money/home-ownership/selling-your-home/more-on-the-foreclosureproblem.html, accessed 9/13/2017.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 28 October 13, 2017

was one of the largest command centers in the U.S. military—and 

Atlanta's seventh-largest employer. It takes time to replace lost jobs. It 

was not until 2015 that Tyler Perry Studios purchased 330 acres of the 

base property to build a studio that local officials say “will deliver a jolt of 

jobs and investment not seen since the post’s closure.”26 According to 

state agency records, there were 110 people who applied for HHF in the 

30315 zip code, which is near the East Point neighborhood, including 6 

veterans, some of whom may have been employed at the base. However, 

the Georgia agency provided HHF aid to only one-third, including only 

two of the six veterans who applied.

The other TARP housing program known as Making Home Affordable 

(MHA) recognizes the special status of military personnel and veterans, 

with a special MHA subprogram called VA-HAMP specifically to lower 

mortgage payments for veterans with VA-insured mortgages.

Unlike MHA, Treasury left decisions to state agencies, which are supposed 

to tailor the program to address local conditions. The Georgia agency 

should have taken into consideration Georgia’s heavy military population 

and the impact that two base closures can have on local communities.

The California state agency recognizes a military homeowner’s hardship, 

but the Georgia agency does not for the HHF underemployment program, 

which was the only program until 2014, and subsequently, the largest 

HHF program in Georgia. The state agency denied 24 homeowners 

claiming a military hardship, and may have turned away many more for 

the same reason. The Georgia agency does not maintain records on 

withdrawn applications. Atlanta Legal Aid recommended in 2015, that 

the Georgia agency expand eligible hardship to include military orders.

The non-profit Georgia ACT in January 2016 made the same 

recommendation. The Georgia agency did not open up a qualifying 

hardship for the underemployment program for a military hardship, but 

did open up that hardship for the much smaller reinstatement program 

($7 million program, compared to the hundreds of millions of dollars in 

the underemployment program).

Treasury should require state agencies in the Hardest Hit Fund to recognize 

military hardships, and take action to increase distribution of this aid to 

veterans.

Treasury should require state agencies to maintain records on why 

homeowner applications are withdrawn when the state agency has relevant 

information.

 26 See J. Scott Trubey, “Developer Named for Atlanta’s Fort McPherson,” The Atlanta Journal Constitution, May 

17, 2017, http://www.ajc.com/news/local/developer-named-for-atlanta-fortmcpherson/m9qggcKaaDXn6h6Ue0FYUM/, accessed 9/14/2017. 
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SIGTARP-18-001 29 October 13, 2017

The Georgia Agency Mismanaged its Largest 

HHF Unemployment Program by Designing 

Overly Strict and Unnecessary Criteria That 

Made It Harder for a Georgia Homeowner to 

Receive This Assistance Than Homeowners in 

Other States

SIGTARP found that the Georgia agency mismanaged HHF by creating a 

substantial risk to its ability to accomplish its mission by designing overly 

strict criteria and disqualifying conditions for the HHF 

unemployment/underemployment program that made it extremely 

difficult for a Georgia homeowner to receive this assistance. The criteria 

are unnecessary because they are not required by Treasury, and do not 

exist in many HHF states. The Georgia agency refused to eliminate overly 

strict criteria despite repeated recommendations to do so. The Georgia 

agency’s use of overly strict and unnecessary criteria makes it harder for 

Georgians to obtain this aid compared to homeowners in other states.

These criteria do not reflect the reality of many Georgians who have and 

still struggle to pay their mortgage, as illustrated in Figure 6.

Figure 6:

Source: SIGTARP analysis of the Georgia agency’s Hardest Hit Fund eligibility requirements.

Despite repeated recommendations, the Georgia agency failed to 

eliminate overly strict criteria for the Mortgage Payment Assistance
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 30 October 13, 2017

program. This was the only HHF program in Georgia until 2014, and 

after that, the largest HHF program.

• In July 2011, U.S. Congressman John Lewis’ office raised concerns 

about “overly strict eligibility criteria.”

• Treasury issued an “Action Memorandum” on April 9, 2012, 

recommending that the Georgia agency revise eligibility criteria.

• On April 10, 2012, U.S. Congressman Henry C. “Hank” Johnson 

wrote to the Governor recommending easing the “over strict 

eligibility criteria,” including being 6 months behind on payments, 

in foreclosure, or in bankruptcy.

• Non-profits like Atlanta Legal Aid (in 2013 and 2015), and Georgia 

ACT (in January 2016) recommended eliminating overly strict 

criteria.

• In 2013, the Georgia Senate issued a resolution for the same.

• In January 2017, SIGTARP issued an audit recommending that 

Treasury require state agencies to eliminate HHF criteria that did 

not exist in other states and criteria that did not reflect the reality 

of workers in that state.

In response, the Georgia agency made very few of these changes, choosing 

in action or delay, while turning away large percentages of Georgians.

Where the Georgia agency made some changes to relax certain criteria, 

there was an increase in homeowners in the program. However, the 

agency did not go far enough. Ten examples include:

1) Why is a Georgia homeowner so limited in what qualifies as a 

hardship for the main HHF program, when homeowners in other 

state agencies can qualify by showing the same hardships

Georgians face?

Treasury requires homeowners to show a hardship for both MHA and 

HHF. For MHA, hardships can include reduced income due to reduced 

pay, decline in earnings, death, disability, divorce, increased expenses due 

to medical costs, uninsured losses, increased utilities or taxes, 

unemployment, excessive debt, and low cash reserves. For HHF, Treasury 

leaves it to state agencies to tailor the aid to local conditions. The Georgia 

agency took a very narrow view, not recognizing common hardships 

facing Georgians that lead to difficulty paying the mortgage and 

foreclosure, and often accompany unemployment and underemployment, 

such as illness, disability, death, or divorce.
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SIGTARP-18-001 31 October 13, 2017

For example, one homeowner fell behind on her mortgage while 

undergoing breast cancer treatment. Her employer phased out her 

position, and offered her a different position that required training. The 

homeowner was unable to take the new position and train while 

undergoing chemotherapy. The Georgia agency turned down the 

homeowner for Hardest Hit Funds on the grounds that her hardship was 

medical, not unemployment. Her house was scheduled for foreclosure, 

and stopped by a state program for transplant patients.

The lack of a qualifying hardship was the top reason why the Georgia 

agency denied homeowners for HHF, denying at least 2,643 

homeowners.27 The limitation on hardships was so pervasive a problem 

that the Georgia Senate and non-profit agencies asked the Georgia agency 

to allow additional hardships. Atlanta Legal Aid recommended twice,

beginning in February 2013, that the Georgia agency expand eligible 

hardships to include illness, disability, death, divorce, and military orders 

on the basis that hardships can result in unemployment or 

underemployment. On March 21, 2013, the Georgia Senate issued a 

resolution to expand eligible hardships to include illness, disability, death,

and divorce. In 2014, the Georgia agency allowed military, death, or 

medical hardships to count for the much smaller reinstatement program

(currently $7 million) and the mortgage recast program (currently $3

million28), but did not allow those hardships to count for the largest HHF 

program, the Mortgage Payment Assistance program, that had hundreds 

of millions of dollars allocated.

Treasury should ensure that state agencies allow common hardships that 

prevent Americans from paying their mortgages on time, such as illness, 

disability, death, and divorce, and other hardships that Treasury recognizes 

in the Making Home Affordable program to qualify for the Hardest Hit 

Fund.

2) Why should a Georgia worker have to show that they lost their job 

in the last 3 years (later expanded in 2015 to 4 years) for the HHF 

unemployment program, when workers in Arizona, Florida, 

Nevada, Rhode Island, South Carolina, and Oregon have no time 

limitation?

Despite a recession marked by long-term unemployment and 

underemployment, the Georgia agency limits HHF 

 27 The 2,643 Georgians that the state agency denied for HHF based on a lack of an eligible hardship include 

189 people in Clayton County, 339 people in DeKalb County, and 313 people in Fulton County. This number 

does not reflect homeowners whose applications the state agency withdrew because they did not show a 

qualifying hardship, and those who may not have applied because they could not meet this overly strict 

criteria. 28 An additional $110 million is reserved for the underwater mortgage assistance component opened in 2016.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 32 October 13, 2017

unemployment/underemployment assistance to homeowners who lost 

their job or became underemployed in the last 3 years (expanded to 

4 years in 2015). Treasury does not require this timeframe. The Georgia 

agency denied at least 652 homeowners for HHF for missing that 

timeframe. This number does not reflect homeowners whose applications 

the state agency withdrew because they did not meet the criteria, and 

those who may not have applied because they could not meet these 

overly strict criteria.29

This criterion penalizes homeowners who tried to avoid taking Federal 

aid by using savings, family help, retirement funds, or other responsible 

measures. This criterion creates an unlevel playing field for Georgia 

workers. Homeowners in six states do not have a limit on when their 

hardships occurred. Homeowners in Indiana, Mississippi, and Tennessee

only have to show a hardship that began on or after January 1, 2008. 

Two non-profits recommended that the Georgia agency change this 

criterion. On March 13, 2015, Atlanta Legal Aid requested that the 

Georgia agency eliminate the 3-year hardship cutoff. Georgia ACT 

recommended in January 2016 that the Georgia agency extend the cutoff 

to 2008. In 2015, the Georgia agency did not eliminate it, but extended it 

to 4 years.

Treasury should require all state agencies in the Hardest Hit Fund to 

recognize hardships dating back to at least 2008.

3) Why should a Georgia worker have to show they were current on 

their mortgage when they lost their job or saw their pay cut, when 

homeowners in other states do not have to show that to receive 

HHF?

To obtain HHF unemployment/underemployment assistance, a Georgia 

homeowner must prove they were current on their mortgage at the time

they lost their job or had their pay cut, which is more restrictive than 

other state agencies, and not required by Treasury. The Georgia agency 

denied 1,093 homeowners who failed this criterion. This number does 

not reflect homeowners whose applications the state agency withdrew 

because they did not meet the criteria, and those who may not have 

applied because they could not meet these overly strict criteria.30

 29 The at least 652 people the Georgia agency denied based on this criteria include 56 people in Clayton 

County, 87 people in DeKalb County, and 89 people in Fulton County. 30 The at least 1,093 people the Georgia agency denied based on this criteria include 86 people in Clayton 

County, 158 people in DeKalb County, and 122 people in Fulton County.
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SIGTARP-18-001 33 October 13, 2017

Treasury should direct state agencies in the Hardest Hit Fund not to 

disqualify homeowners who were delinquent on their mortgages at the time 

of their hardship.

4) Why should a Georgia homeowner have to show that they are no 

more than 6 months behind on their mortgage (and later 12 

months), when homeowners in Alabama, California, Florida, 

Kentucky, Michigan, Ohio,31 South Carolina, Tennessee, and other 

states would not be disqualified?

HHF is a program to prevent foreclosures. It is often the case that people 

at risk of foreclosure are 6 months delinquent. Treasury does not require 

this disqualifier. Other state agencies do not have this limitation. As 

Congressman Johnson said in a 2012 letter to Georgia’s governor, these 

are the people this program was designed to help. The Georgia agency 

denied 1,168 Georgians for HHF for not meeting this criterion.32 There are

likely many more who were withdrawn from the program or did not 

apply because they could not meet it. After the Georgia agency added this 

restriction in May 2012, the number of HHF applications plummeted, as 

shown in Figure 7.

Figure 7. HHF Georgia Applications, Through March 31, 2017

Source: SIGTARP analysis of Georgia HHF performance data records from Q1 2011 to Q1 2017.

 31 In Ohio, there is no timeframe. Instead, homeowners can apply as long as they are not more than $25,000 

delinquent on their mortgage. 32 The at least 1,168 people the Georgia agency denied based on this criteria include 100 people in Clayton 

County, 134 people in DeKalb County, and 144 people in Fulton County.
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SIGTARP-18-001 34 October 13, 2017

Delinquencies of 6 months or more would have been common to 

Georgia homeowners. In 2012, Congressman Johnson requested that the 

Georgia agency eliminate this overly strict criterion. On March 21, 2013, 

the Georgia Senate issued a resolution to open up the 6-month-past-due 

disqualification to 9 months. The Georgia agency was slow to adapt, 

relaxing it to 12 months only on in December 12, 2013.

As an example, the Georgia agency denied one unemployed homeowner 

for being more than 6 months delinquent, a homeowner who had applied 

for Social Security disability. The homeowner complained that the bank 

had stopped accepting their payments and made mistakes related to a 

mortgage modification. After the agency extended the delinquency cap, 

the homeowner called back and asked to be reconsidered but, by that 

time, was more than 12 months delinquent and was turned away.

Treasury should direct state agencies in the Hardest Hit Fund not to 

disqualify homeowners based on the length of their delinquency.

5) Why should a Georgia worker have to be substantially 

underemployed with a 25% pay cut to receive these funds while a 

worker in Florida, Arizona, or Oregon has to suffer only a 10% pay 

cut and a worker in California, Rhode Island, or Indiana does not 

have to show any specific percentage?

The Georgia agency tightened its definition of underemployment to 

substantial underemployment with a 25% pay cut on May 3, 2012, and

saw applications plummet. This restriction is not required by Treasury, 

and is more restrictive than other states. This criterion was the reason 

why the Georgia agency denied at least 632 homeowners for HHF, a 

number that does not reflect homeowners whose applications the state 

agency withdrew because they did not meet the criteria. There could be 

many who did not apply because they could not meet these overly-strict 

criteria, given the drop off in applications after this criterion was added.33

In January 2017, SIGTARP warned that this criterion was too strict. In an 

evaluation, “Improving TARP’s Investment in American Workers,” 

SIGTARP reported that in Florida and Oregon a 10% pay cut counts for 

HHF, a worker in California, Arizona, or Indiana does not have to show 

any specific percentage, and workers in seven other states have to show 

less than a 20% cut in income. SIGTARP recommended, “...Treasury and 

state agencies should eliminate unnecessary program eligibility criteria 

that prevent low-income homeowners from getting Hardest Hit Fund 

assistance, including those criteria that do not reflect the reality of the 

state’s working class and those that do not apply to homeowners in other 

 33 The Georgia agency denied at least 632 people based on this criterion, including 47 people in Clayton 

County, 84 people in DeKalb County, and 74 people in Fulton County.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 35 October 13, 2017

states for these Federal dollars.” Atlanta Legal Aid (repeatedly) and the 

Georgia Senate requested this criterion be reduced to 10%, and Georgia 

ACT recommended that it be eliminated.

The Georgia agency refused to change this criterion, even to reduce it to 

10%. When asked about reducing this criterion, the head of the HHF 

Georgia program told SIGTARP that the average mortgage payment in 

Georgia is about $1,000 and if someone were to lose 10 percent of their 

income, they could “get a lot of money” from HHF Georgia. 

Treasury should direct state agencies in the Hardest Hit Fund with 

available funds to define underemployment as requiring not more than a 

10% reduction in income.

6) Why should a Georgia homeowner be automatically disqualified if 

they resigned from their job, when they may have resigned due to 

age, health, disability, medical reasons, or military orders?

The Georgia agency provides assistance only to homeowners who lost 

their job “through no fault of their own,” but takes a very narrow view of 

what qualifies. Many state agencies in the HHF provide HHF assistance 

for people who received unemployment benefits. The Georgia agency 

disqualifies a homeowner who resigned even if they are not at fault for 

resigning. This criterion is the second largest reason why the Georgia 

agency denied homeowners. The Georgia agency denied at least 1,977

homeowners for HHF on this criterion. It is unknown how many of those 

homeowners may have resigned based on age, health or disability, 

medical reasons, or military reasons.34 This number does not reflect 

homeowners whose applications the state agency withdrew because they 

did not meet the criteria, and those who may not have applied because 

they could not meet this overly strict criteria.

Treasury should direct state agencies in the Hardest Hit Fund to consider 

the full circumstances of the homeowner’s reasons for unemployment or 

underemployment.

7) Why should a Georgia homeowner be disqualified if their 

mortgage payment is less than 25% of their income after they lost 

their job or saw their pay cut?

The Georgia agency requires that the mortgage payment must be greater 

than 25% of income. This is not a Treasury requirement. This is the 

fourth most common reason why the Georgia agency denied 

homeowners. This criterion was the reason why the Georgia agency 

 34 The Georgia agency denied at least 1,977 people based on this criterion, including 152 people in Clayton 

County, 249 people in DeKalb County, and 243 people in Fulton County.
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SIGTARP-18-001 36 October 13, 2017

denied 1,129 homeowners for HHF, a number that does not reflect 

homeowners whose applications the state agency withdrew because they 

did not meet the criteria, and those who may not have applied because 

they could not meet these overly strict criteria.35 This requirement does 

not consider that homeowners may have other bills (for example, medical 

bills) that cause difficulty in paying the mortgage. This criterion can hurt 

seniors, who have lived in their home for a long time and paid down their 

mortgage, or someone who inherited a family house with a very low 

mortgage.

8) Why should a Georgia homeowner be prohibited from combining 

HHF assistance when homeowners in other states routinely 

combine assistance?

The Georgia agency prohibits homeowners from participating in multiple 

Georgia HHF programs when that is commonly done in other states. For 

example, a homeowner in another state may receive principal reduction

assistance to cover negative equity amounts, and also receive HHF mortgage 

assistance to stay current on monthly payments, but that is not allowed in 

Georgia. This is not a Treasury requirement. On March 13, 2015, Atlanta Legal 

Aid requested that the Georgia agency permit homeowners to combine Georgia 

HHF assistance. In January 2016, Georgia ACT also recommended combining 

Georgia HHF assistance with a per-homeowner cap of $45,000. Once there is 

already an investment in a homeowner, combined assistance can provide the 

best chance of preventing foreclosure. This particularly makes sense where so 

much of the available TARP dollars are unspent in Georgia.

Treasury should direct all state agencies in the Hardest Hit Fund to allow 

homeowners to combine all forms of applicable Hardest Hit Fund assistance 

in that state, where sufficient funds are available.

9) Why should a Georgia homeowner be disqualified from receiving 

assistance from HHF and TARP’s Making Home Affordable 

Program?

The Georgia agency has criterion that a homeowner cannot receive 

assistance while participating in a HAMP trial modification. Treasury 

does not require this. Many state agencies allow HHF and HAMP to work 

together. For example, a homeowner may receive HHF assistance to 

reinstate past due amounts, and then permanently lower their mortgage 

payment in HAMP. SIGTARP recommended in July 2014 that state 

agencies combine HHF and HAMP.

 35 The Georgia agency denied at least 1,129 people based on this criterion, including 59 people in Clayton 

County, 133 people in DeKalb County, and 106 people in Fulton County.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 37 October 13, 2017

Treasury should direct state agencies to allow a homeowner who received 

HAMP or MHA assistance to also receive Hardest Hit Fund assistance.

10) Why should a Georgia homeowner in bankruptcy be disqualified 

if homeowners in Arizona, Washington D.C., Illinois, Indiana,36

Michigan, North Carolina, and Rhode Island are not disqualified?

Bankruptcy does not disqualify homeowners in seven other states from 

receiving HHF, and it is not a Treasury requirement. This criterion creates

an unlevel playing field for Georgia homeowners. U.S. Congressman 

Henry Johnson asked Georgia’s governor in April 2012 to drop this 

criterion because, in a non-judicial state like Georgia, homeowners have 

limited options to stop scheduled foreclosure sales other than 

bankruptcy.37 Atlanta Legal Aid made the same request in February 2013 

given that foreclosure notices have to be sent only 30 days before a 

foreclosure sale. The Georgia Senate recommended removing this 

disqualification by resolution in March 2013. Bankruptcy is not a 

disqualifying event under the other TARP program, Making Home 

Affordable.38

Housing counselors under contract with the Georgia state agency told 

SIGTARP that it is difficult for homeowners who are in bankruptcy to 

obtain HHF assistance. This criterion was the reason why the Georgia 

agency denied at least 554 homeowners for HHF, a number that does not 

reflect homeowners whose applications the state agency withdrew 

because they did not meet the criteria, and those who may not have 

applied because they could not meet these overly-strict criteria.39 One 

housing counselor told SIGTARP in an interview that some homeowners 

filed for bankruptcy to keep their home while waiting for the Georgia 

agency’s approval on their application. However, once the homeowner 

filed for bankruptcy, they became ineligible for the program.

Treasury should prohibit state agencies from automatically disqualifying a 

homeowner who filed for bankruptcy from receiving Hardest Hit Funds.

Treasury should immediately require the Georgia agency to eliminate

criteria that do not exist in other states and eliminate criteria that do not 

 36 In Indiana, homeowners in bankruptcy may be allowed HHF assistance at the lender/servicer’s discretion. 37 The Georgia agency records also reflect that 27 homeowners were denied because their mortgage servicer 

or mortgage investor objected. Servicer/investors included a number of TARP recipient banks including 

Wells Fargo Home Mortgage, J.P. Morgan Chase Bank, Bank of America, GMAC Mortgage, Sun Trust 

Mortgage, as well as servicers participating in TARP’s HAMP program like Ocwen, and Select Portfolio 

Servicing. 38 In its application for new HHF funding in 2016, the Georgia agency acknowledged that Georgia is a nonjudicial foreclosure state, and that a homeowner can be foreclosed upon after five missed payments. 39 The Georgia agency denied at least 554 people based on this criterion, including 43 people in Clayton 

County, 72 people in DeKalb County, and 64 people in Fulton County.
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SIGTARP-18-001 38 October 13, 2017

reflect the reality of Georgians (as defined by the reasons why 

homeowners were denied for HHF).

Treasury should direct the Georgia agency to review and reconsider all 

homeowners whose applications were denied or withdrawn in the last year

with the eliminated criteria.
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The Georgia State Agency Mismanaged the 

Program by Failing to Fix a Confusing 

Application Process, and Requiring 

Unnecessary Red Tape

The Georgia agency mismanaged the program by creating a substantial 

risk to its ability to accomplish its mission by failing to fix a confusing 

application process, and by requiring unnecessary red tape. As a result,

8,129 people who started applications never finished them. Georgia was 

well aware that homeowners were starting applications and not finishing 

them because it was in the agency’s data. Treasury told the agency in 

April 2012 that this should be a key focus of the Georgia agency to fix. At 

that time, there were 604 “start and stop” homeowner applications.

Treasury recommended the state agency enlist housing counselors or 

community partners to gain an understanding of the problems facing 

Georgia homeowners during the application process. Georgia did that and 

found that 138 homeowners stated they were unable to complete their 

applications because they were “Referred back to the [state 

agency]”/needed help with application. This should have been a red flag 

that the application process was broken and needed to be fixed.

The Online Application Is Confusing and Difficult to Navigate

According to the head of the HHF Georgia program, homeowners apply 

for HHF assistance online. Homeowners who do not have access to a 

computer can schedule a walk-in appointment at the Georgia state 

agency’s main office in Atlanta, which takes about 10 appointments per 

week. Not everyone lives near Atlanta or is able to travel there.

Homeowners who use the non-profit counselor D&E can have the 

counselor create an online account for the homeowner to complete the 

application.

The use of online-only applications does not accommodate those in the 

hardest hit areas who do not have access to or experience using the 

Internet or computers. According to a housing counselor, many clients 

were older and did not have access to a computer. Atlanta Legal Aid told 

SIGTARP that the online application process is cumbersome and does not 

accommodate homeowners who are disabled, Internet illiterate, or who 

do not speak English as their first language.40

 

40 There is currently a general link for homeowners who understand Spanish; however, the link only provides 

information and is not an application. The application is only in English. See

http://www.homesafegeorgia.com/Spanish, accessed 9/21/2017. 
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SIGTARP-18-001 40 October 13, 2017

SIGTARP found that the Georgia agency mismanaged the program by 

having an online application that is overly complicated and confusing.

SIGTARP officials tried to navigate the online application and had 

problems at every step. The application required detailed information 

that might not be readily available to a homeowner. Several times, 

SIGTARP officials were routed to error pages. Any homeowner would 

have difficulty completing the online application process without help.

SIGTARP found that the Georgia agency mismanaged the program by 

providing very little in-person assistance to homeowners trying to apply 

to HHF. As one homeowner told SIGTARP, the message from the Georgia 

agency was “We can’t help you.” According to a news article, one 

frustrated homeowner voiced the difficulty of the Georgia HHF 

application process, saying, “It’s a really hard process. They provide you 

with a packet, they send it in the mail but for all the follow-up there’s no 

way in the world you can do it without any type of Internet...It was just 

like giving birth. You get hopeless.”41 Congressman Johnson 

recommended in 2012 that the Georgia agency help people with limited 

Internet access. He even held an in-person event to assist people with 

applications.

The Georgia agency should have done much more. Instead, it watched 

thousands of Georgians start and stop applications, without fixing the 

problem.

Treasury should require the Georgia agency to streamline its online 

application so that a homeowner only has to provide basic information.

Treasury should require the Georgia agency to provide every homeowner 

the option to receive application intake counseling, and the choice of 

receiving that assistance either in-person or telephonically.

The Georgia Agency Set an Artificial and Unnecessary 30-Day 

Window for a Homeowner to Complete Their Application and 

Provide Documents

SIGTARP found the Georgia agency mismanaged the program by creating 

a 30-day timeline for homeowners to provide all information and 

documents, which is artificial, unnecessary, and unrealistic. The Georgia 

agency forced the withdrawal of more than 8,000 homeowner HHF

applications because the homeowner did not complete the full process 

and provide all documents within 30 days. If all required documents are 

 41 WSB-TV, “Applicants say process for mortgage help like ‘giving birth,’” April 4, 2012, 

http://www.wsbtv.com/news/local/applicants-say-process-mortgage-help-giving-birth/242533943, 

accessed 6/21/2017. 
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SIGTARP-18-001 41 October 13, 2017

not provided by the homeowner within 30 days, the Georgia agency’s 

intake counselor, ClearPoint, automatically removes the homeowner’s 

application without providing any meaningful counseling to the 

homeowner.42 This deadline is not required by Treasury, and not feasible 

given the red tape that the Georgia agency requires that other state 

agencies do not.

SIGTARP found that Georgia’s unnecessary and artificial 30-day

timeframe for homeowners to complete their online application coupled 

with unnecessary and burdensome red tape led to the state agency 

withdrawing thousands of homeowners’ applications. Instead of working 

with the homeowner to be able to provide necessary information, the 

Georgia agency kicked out their application with no help. Housing 

counselors told SIGTARP and the Georgia agency that homeowners 

complained they have a problem with the tight 30-day application 

timeframe.

In 2014 and 2016, D&E, a non-profit counselor for the Georgia agency,

started a “second look” program looking into applicants that were 

withdrawn. This resulted in 22 homeowners receiving HHF assistance 

despite initially being turned away. These homeowners received a second 

chance, showing the benefit to in-person assistance.

Treasury should require the Georgia agency to eliminate the underwriting 

requirement that a homeowner’s Hardest Hit Fund application is 

withdrawn after 30 days, even when a grace period is added. 

Treasury should eliminate all state agencies’ forced withdrawal of a 

homeowner’s Hardest Hit Fund application for one year from the time the 

homeowner begins an application.

The Georgia Agency Requires Unnecessary Red Tape

SIGTARP found that the Georgia agency mismanaged the program by 

requiring red tape that is complicated, burdensome, and unnecessary, as 

it is not required by Treasury or by other state agencies in HHF. Treasury 

told the Georgia agency to streamline its underwriting. Lawyers at 

Atlanta Legal Aid found a confusing HHF application process. 

Homeowners found the red tape to be very difficult to pass.

One counselor told SIGTARP that it is so hard to get an applicant 

approved, that they suggest HHF as a last resort to homeowners. One 

counselor told SIGTARP that the Georgia agency wanted “cumbersome 

documents,” would not accept documents, and would request half the 

 42 According to ClearPoint, homeowners may be afforded a limited grace period.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 42 October 13, 2017

documentation, rather than all up front. The counselor said that once 

the homeowner provided the documents, the Georgia agency would ask 

for something else but give only 3 days to provide it.

Some of the most onerous conditions of the red tape include:

• IRS tax transcripts for the last 4 years

According to the IRS website, it could take between 1 to 6 weeks for the 

transcript to be available. One homeowner told SIGTARP they visited the 

IRS four times for the transcript only to have the Georgia agency send 

them back to the IRS because the IRS did not stamp it. Treasury does not 

require IRS tax transcripts. Other state agencies accept tax returns or 

other proof of income.

• Mortgage payment history from the mortgage servicer for the 

last 2 years

Homeowners should not have to rely on mortgage servicers for any 

documents to receive this aid. A homeowner whose mortgage was 

transferred to different servicers would have a very difficult time 

obtaining payment histories from all servicers, even with more than 30 

days. One homeowner told SIGTARP that her HHF application was stalled 

because the initial mortgage servicer lost her client’s payment history and 

the servicer changed multiple times.

The Georgia agency denied Leticia Liggins for HHF because she was more 

than 6 months delinquent after being laid off in 2011. However, she was 

on a 12-month forbearance plan with her lender that should have been 

credited. Legal Aid represented Ms. Liggins and negotiated with the 

Georgia agency to admit her into the program if she immediately paid 

7 months of payments. But the Georgia agency then required a payment 

history that Legal Aid was unable to get from her lenders Nationstar or 

Dovenmuehle. Without the full payment history, the Georgia agency 

would not approve Ms. Liggins before her scheduled December 2013 

foreclosure sale, so Ms. Liggins filed for bankruptcy, which would 

disqualify her for HHF. Nationstar admitted that they could not find 

Ms. Liggins’ payment history, which Legal Aid used to appeal to the 

Georgia agency. The Georgia agency then agreed to accept Ms. Liggins’ 

credit reports and bank statements. But then, Nationstar refused to 

accept the Hardest Hit Funds unless the account was brought current.

This continued until Legal Aid wrote to Nationstar’s General Counsel.

HHF was used as a bridge until Ms. Liggins was able to get new income.

However, it took significant legal advice and representation.
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SIGTARP-18-001 43 October 13, 2017

This red tape is unnecessary, as it is not used by other states that accept 

other documents such as credit histories and tax returns. More egregious 

is the Georgia agency could obtain much of the information on its own 

instead of making the homeowner struggle to have the IRS and mortgage 

servicers respond within the 30 days.

• Separation letter from an employer showing 

unemployment/underemployment not the homeowner’s fault

Employers may not be willing to send in forms, or to draft the forms to 

meet the red tape of the Georgia agency.

According to one homeowner, she tried for 7 months to get assistance 

from HHF but could not get through the red tape and eventually lost the 

home she had lived in for decades to foreclosure. The state agency 

withdrew her application when she could not provide a separation letter 

to their liking, even though the former employer, a construction company, 

provided a letter that said, “notice of cancellation of contract.”

According to one homeowner, the Georgia agency withdrew his HHF 

application when he could not provide a separation letter to prove that he 

was not at fault for losing his job. The homeowner told the Georgia 

agency that his former employer was unwilling to provide the letter. Two 

years later, the homeowner sought HHF assistance again, but was denied 

because by that time he was too delinquent on his mortgage, so the 

Georgia agency turned him away again.

Treasury should direct state agencies to eliminate requirements that a 

homeowner provide tax transcripts or mortgage payment histories from 

servicers in order to qualify for the Hardest Hit Fund.

Treasury should work with each state agency to streamline document 

requirements to match what other state agencies require for Hardest Hit 

Fund assistance.

Offering Personalized Support During the HHF Application 

Process Can Help Provide HHF Assistance to Struggling Georgia 

Homeowners

SIGTARP found that the Georgia state agency automatically sends 

homeowners’ online applications (about 95%) to its statewide 

application processor (ClearPoint) without personal assistance.

The Atlanta Legal Aid Society and homeowners expressed frustration 

with the lack of guidance during the application process. Georgia agency 

personnel rarely meet homeowners in person, and one homeowner 
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SIGTARP-18-001 44 October 13, 2017

indicated there was “no understanding, analyzing, and meeting the 

person where they were.” Unlike the automated system, according to 

Atlanta Legal Aid, they work with the homeowner from “cradle to grave.” 

Another homeowner stated they would “be on the streets if it was not for 

Legal Aid” and the guidance they provided. 

Housing counselors told SIGTARP that homeowners have complained 

about the lack of direct, personal support housing counseling can provide 

during the application process, but the Georgia state agency has not done 

enough to resolve this issue. Housing counselors as well as Atlanta Legal 

Aid told SIGTARP that homeowners are more comfortable having 

personalized guidance, meeting with a housing counselor in their 

community who can explain program rules and documentation 

requirements, and assist them in navigating the application process.

Additionally, their experience has shown that having a housing counselor 

involved throughout the process can achieve greater success in getting 

assistance.

ClearPoint is responsible for making initial approval, ineligibility, or 

withdrawal determinations for most HHF online applications. D&E is a 

non-profit housing counselor the Georgia agency uses to process 

applications. However, the Georgia agency does not send D&E 

applications to process. Instead, D&E conducts its own outreach to 

identify potential homeowners and works with these homeowners,

guiding them throughout the entire online application process.

ClearPoint, on the other hand, provides appointments only in rare, 

limited circumstances. Moreover, because ClearPoint has only one office 

in Atlanta that serves the entire state, personal appointments may be 

inaccessible to many homeowners. 

Georgia homeowners who used a non-profit counselor other than 

ClearPoint to complete and submit their online HHF applications were 

approved at higher rates for the HHF program. The other non-profit 

counseling agencies proactively identified homeowners and worked 

individually with the homeowner to ensure the completeness of the

submitted application.

The Georgia Senate and Atlanta Legal Aid recommended in 2013 that the 

Georgia agency broaden use of counseling services to provide assistance 

to homeowners applying for HHF.

By comparison, more than half (54%) of homeowners whose applications 

originated from D&E, which utilizes personalized guidance, were 

approved while only one-third of homeowners who went through 

ClearPoint were approved. Between 2014 and 2016, ClearPoint withdrew 

33% of all applications it reviewed.
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SIGTARP-18-001 45 October 13, 2017

However, there is no accountability requiring ClearPoint to increase the 

number of people admitted to the program. The Georgia agency has paid 

the non-profit D&E $352,725 in HHF. The Georgia agency has paid 

ClearPoint $2.99 million in Hardest Hit Fund dollars while ClearPoint has 

one of the lowest homeowner admission rates in HHF in the nation.

Treasury should not continue to pay ClearPoint for severe 

underperformance.

Treasury should require the Georgia agency to increase its use of non-profit 

housing counselors, other than ClearPoint, for intake, and divide

applications among various counselors rather than send them all through 

ClearPoint.

Treasury should require the Georgia agency to set target numbers of 

homeowners assisted through each counselor and have the Georgia agency 

hold all of its housing counselors accountable, including through 

performance-based incentives and/or withholding payment, for increasing 

the number of hard-hit homeowners getting into the Hardest Hit Fund 

program.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 46 October 13, 2017

The Georgia Agency Mismanaged the 

Program by “Guarding” These Funds and 

Placing “Precautions” So Only Its Version of a 

Responsible Homeowner Would Receive It, 

Rather Than Hard-Hit Georgians

The Georgia agency mismanaged the program by creating a substantial 

risk to its ability to accomplish its mission when it limited Hardest Hit 

Funds to turning down hard-hit homeowners. The fact that there is $164

million unspent, that two-thirds of applying homeowners were turned 

away, that the Georgia agency uses overly strict criteria and unnecessary 

red tape, and that there is a broken process, raises concerns that the 

Georgia agency is not trying to provide this Federal aid to hard-hit 

Georgians.

The Georgia official in charge of the program told SIGTARP that the 

agency “designed the program to assist responsible homeowners who 

lost their job,” but the Georgia agency added requirements to be a 

“responsible homeowner” that do not exist in other states for these same 

Federal dollars and go beyond the Treasury and President Obama’s 

definition. Treasury already limits the amount of the mortgage, 

precluding irresponsible homeowners who took out loans they knew they 

could not afford. The median value of a house in DeKalb, Clayton, and 

Fulton counties is far under the $424,100 cap, and 99% of the 20,054 

Georgians turned away had a mortgage under that cap.43

The Deputy Commissioner of the Georgia agency reportedly told the 

press that:

[T]he program is guarding its mission and making sure the funds 

are appropriated in a way that meets the program’s criteria.... We 

didn’t want to just throw money out the door. We have to answer for 

this program. These are taxpayer dollars. We have to make sure that 

people who are going to get assistance are qualified and meet the 

criteria, so at the end of the day when we are going through 

auditing, we can show how effective the program has been

[emphasis added].44

 43 The cap changed from 417,000 to $424,100 on November 23, 2016. 44 Kerri Ann Panchuk, “Criticism of Georgia foreclosure fund misses the mark,” Housing Wire, April 6, 2012, 

https://housingwire.com/blogs/1-rewired/post/criticism-georgia-foreclosure-fund-misses-mark,

accessed 9/13/2017.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 47 October 13, 2017

A Georgia agency spokesperson reported to the press, “It’s a deliberate 

process. We’re accountable to taxpayers, it’s taxpayer money, so we take 

what we feel are appropriate precautions” [emphasis added].45

The severe low performance of the Georgia agency coupled with these 

statements by Georgia agency officials show that the Georgia agency set a 

very high bar for homeowners to receive Hardest Hit Funds. This bar was 

not required by Treasury, and not set by other state agencies for these 

same funds. In comparison to other states, HHF eligibility for Georgians is 

overly restrictive, making it difficult for struggling homeowners to 

qualify.

At the same time it set a very high bar for Georgia homeowners, the 

Georgia agency set a very low bar for itself to receive these funds. An 

official from Atlanta Legal Aid told SIGTARP that the Deputy 

Commissioner of the Georgia agency said in a meeting that the agency 

needed to make the funds last through 2017 (the program end). While it 

is unknown whether that statement is true, the slow rate of disbursing 

HHF made the money last and the Georgia agency benefitted. While other 

state agencies closed their programs years early, wound down their staff, 

and closed offices, the Georgia agency remained open with Treasury 

funding their offices, salaries, and expenses.

 45WGCL-TV (CBS), “Changes aid Homesafe Georgia in helping more avoid foreclosure, “August 13, 2014, 

http://www.cbs46.com/story/26269777/changes-have-homesafe-georgia-helping-more-avoid-forclosure, 

accessed 9/13/2017.
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SIGTARP-18-001 48 October 13, 2017

Treasury Mismanaged HHF in Georgia by 

Failing to Hold the Georgia Agency 

Accountable for Meeting Targets 

Treasury mismanaged HHF in Georgia by creating a substantial risk to 

achieving the mission of HHF in Georgia by not holding the Georgia 

agency accountable. Treasury knew the Georgia agency was 

underperforming, and made some efforts to improve it, but did not do 

enough to hold the agency accountable to the targets that the Georgia 

agency and Treasury established. 

In its application to Treasury to participate in HHF, the Georgia agency 

said that HHF would assist 18,625 people, assisting “most of the 

homeowners in years 1 and 2.” The Georgia agency set a target of 

assisting 9,000 homeowners in year 1 and 9,500 homeowners in year 2.

However, it took the Georgia agency 6 years to provide assistance to 

9,000 homeowners.

Treasury set a target in the 2012 Action Memorandum for funding 250 

homeowners each month and publicly reported on each state agency’s 

progress each quarter.

• For example, Treasury reported that as of September 30, 2013, the 

Georgia agency had only disbursed $53.4 million (15.7% of the 

available Hardest Hit Funds), and assisted only 4,004 

homeowners. According to the Georgia agency’s targets in its HHF 

application, it should have already disbursed HHF to more than 

18,550 homeowners by then. If Treasury had held the Georgia 

agency accountable to the 2012 Action Memorandum of funding 

250 homeowners per month, the number of homeowners assisted 

should have been 5,024.

• For example, Treasury reported that as of September 30, 2014, the 

Georgia agency had disbursed only $92.9 million (27.4% of the 

available Hardest Hit Funds), and assisted only 5,556

homeowners. According to the Georgia agency’s targets in its HHF 

application, it should have already disbursed HHF to 18,600 

homeowners by then. If Treasury had held the Georgia agency 

accountable to the 2012 Action Memorandum of funding 250 

homeowners per month, the number of homeowners assisted

should have been 8,024. 

• Treasury later reported that as of September 30, 2015, the Georgia 

agency had disbursed only $127.8 million (37.7% of the available 

Hardest Hit Funds), and assisted 7,083 homeowners. According to 
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 49 October 13, 2017

the Georgia agency’s targets in its HHF application, it should 

have already disbursed HHF to more than 18,625 homeowners by 

then. If Treasury had held the Georgia agency accountable to the 

Action Memorandum of funding 250 homeowners per month, the 

number of homeowners assisted should have been 11,024. 

Treasury did not hold the Georgia agency accountable to the targets 

Treasury set. In Treasury’s April 2012 Action Memorandum to the 

Georgia agency, Treasury warned, “Treasury estimates also indicate [the 

Georgia Agency] will not utilize significant amounts of allocated HHF 

funds at current spending rates.” This is still true today with almost half 

of the allocated HHF funds unspent.

Since 2012, the Georgia state agency has not made demonstrable 

improvement in its performance, as reflected by Treasury rejecting the 

request for an additional $33.5 million in HHF. The Georgia agency made 

some changes, but did not make major changes to implement Treasury’s 

2012 recommendations.

Rather than hold the Georgia agency accountable, Treasury has paid the 

Georgia state agency almost $32 million in administrative expenses. This 

includes paying the Georgia agency $12 million for salaries, even though 

the Georgia agency is severely underperforming.46

Although the Georgia state agency lost the opportunity to help thousands 

of Georgians with HHF, with $164 million remaining, there remains a 

chance to address the serious and continuing local problems that have 

prevented homeowners and workers from getting assistance.

Treasury should hold the Georgia state agency accountable by stopping 

the Georgia agency’s mismanagement, requiring immediate major 

changes as recommended by SIGTARP and others, to provide the 

remaining funds to homeowners on an urgent basis, when they need it 

now, not in the future when it may be too late.

 46 The Georgia agency employed 20 full-time and 22 temporary employees who work on HHF, as of November 

2016.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 50 October 13, 2017

Conclusion

There are two TARP housing programs that operate in Georgia. The 

Making Home Affordable Program, a national program administered by 

Treasury, has provided TARP dollars to 80,026 Georgians. The Hardest 

Hit Fund administered by the Georgia Department of Community Affairs 

(the Georgia agency) has provided TARP dollars to only 9,061

homeowners over more than 6 years, while $164 million, which is more 

than half of the available HHF dollars, remains unspent. Upon a request 

by Congressman John Lewis, SIGTARP audited the Hardest Hit Fund in 

Georgia to determine whether it had adequately served counties in his 

district, and to identify improvements. SIGTARP found that TARP’s 

Hardest Hit Fund program has not adequately served those most in need 

in Georgia counties in Congressman Lewis’ district in Atlanta and 

surrounding areas.

The mission of the Hardest Hit Fund is to preserve homeownership, 

something that hard-hit homeowners in Atlanta and surrounding areas 

greatly need. This mission is accomplished by state agencies providing 

Hardest Hit Fund aid to families through local programs tailored to the 

urgent needs of the communities. If the state agency does not provide the 

aid, it cannot effectively address local needs. 

Homeowners in DeKalb, Clayton, and Fulton counties fit the definition of 

hard hit. So many in these three counties are hard hit not because of 

anything that is their fault, but instead because of where they live. These 

are Georgians caught in a pocket of slow recovery compared to other 

cities. Neighborhoods like Forest Park, Lakewood Heights, and Lithonia 

have been the subject of nationwide and local reporting on pervasive 

poverty and an uneven housing market. Many in these counties owe more 

than their house is worth. There are not enough jobs.47 The jobs that do 

exist often do not pay enough to cover the mortgage and other bills. There 

has been, and continues to be, a need for the Hardest Hit Fund.

The need for the Hardest Hit Fund has always been urgent in DeKalb, 

Clayton, and Fulton counties. Nearly one quarter of all Georgia 

homeowners who lost their home to foreclosure since 2008 lived in 

DeKalb, Clayton, or Fulton County. Foreclosures in Georgia can be very 

fast because banks do not have to go to court to foreclose on a Georgia 

homeowner. Treasury’s promises that the Hardest Hit Fund would 

provide “urgent,” “immediate,” help “as soon as possible” meant that the 

program had an opportunity to prevent these fast foreclosures. Along 

 47 All three counties have above-average unemployment. Clayton County has a 5.9 percent unemployment 

rate compared to the national 4.5 unemployment rate. DeKalb County and Fulton County also have above 

average unemployment rates at 4.9 percent each.
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SIGTARP-18-001 51 October 13, 2017

with need, there was interest in the program, and many hard-hit 

Georgians applied. There were 29,750 Georgians who applied for the 

program, 9,516 from DeKalb, Clayton, and Fulton counties.

SIGTARP found that the Hardest Hit Fund did not meet the urgent local 

needs affecting the housing recovery of Georgia homeowners living in 

DeKalb, Clayton, and Fulton counties. The Georgia agency turned away 

two-thirds of Georgians living in these counties for the Hardest Hit 

Fund—6,200 people—while more than one hundred million dollars sat 

idle.48

The Georgia agency turned away thousands who could not afford to be 

turned away. In Fulton County, 75% of all applicants that the Georgia 

agency turned away earned less than $30,000 per year. In DeKalb County, 

77% of all applicants that the Georgia agency turned away earned less 

than $30,000 per year and, in Clayton County, 81% of all applicants that 

the Georgia agency turned away earned less than $30,000 per year. Most 

turned away in these counties earned less than $20,000. 

The problems that SIGTARP found with the Hardest Hit Fund extended 

beyond these three Georgia counties to the entire state. Year after year, 

the Georgia agency ranked among the least effective state agencies in 

disbursing Hardest Hit Funds to homeowners to preserve 

homeownership—the goal of the program. SIGTARP reported on the 

severe underperformance of the Georgia agency 25 times in 5 years.

Twice, U.S. Congressmen from Georgia wrote to then-President Obama to 

change or redirect the program.

• Rather than respond to the most pressing problems of their 

communities, the Georgia agency turned away two of every three

(20,051 of 29,750) Georgians who applied for Hardest Hit Funds, 

one of the worst rates nationwide.

• Three out of every four turned away earned less than $30,000, 

most earned less than $20,000, while millions of TARP dollars sat 

idle.

• In 2010, the Georgia agency told Treasury that it planned to 

distribute Hardest Hit Funds to 18,625 homeowners (9,000 

homeowners in the first year, and 9,500 homeowners in the 

second year). However, it has taken more than 6 years for the 

 48 The Georgia agency turned away 2,476 DeKalb County residents, 2,342 Fulton County residents, and 1,382 

Clayton County residents who applied. There were 95,232 homeowners in these counties losing their home 

to foreclosure since September 2008.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 52 October 13, 2017

Georgia agency to provided Hardest Hit Funds to 9,061 Georgia 

homeowners.49

• The Georgia agency has provided less than half of the available 

dollars ($173.8 million out of $370.1 million) to homeowners.

• Despite Georgia experiencing one of the highest levels of 

underwater homeowners in the nation, which is a contributing 

factor to Georgia’s slow recovery from the crisis, the Georgia 

agency failed to provide underwater home HHF assistance for 

6 years.

• Despite Georgia having one of the largest populations in the United 

States of military and veterans, the Georgia agency turned away 

2,310 veterans—71% of all veterans who applied for the Hardest 

Hit Fund.

Finding statewide ineffectiveness and inefficiency of HHF in Georgia, 

SIGTARP shifted the audit to determine the source of the problem, and 

how to fix it.

SIGTARP found mismanagement by the Georgia agency paid by Treasury 

to provide this urgent aid to Georgia homeowners, and by Treasury in not 

holding the Georgia agency accountable.50 The Government 

Accountability Office (GAO) defines mismanagement as “creating 

substantial risk to an agency’s ability to accomplish its mission.” The 

mission of HHF is to preserve homeownership. The mission is 

accomplished by state housing finance agencies like the Georgia agency, 

providing aid to families through local programs tailored to the urgent 

needs of the communities. Conversely, the mission is not accomplished,

given that the Georgia agency withheld aid.

The Georgia agency’s mismanagement of HHF included that it:

• Failed to act with urgency in distributing this Federal aid, and 

withheld it from Georgians. While some families received the aid, 

the Georgia agency did not provide this aid with any urgency, and 

did not provide it to enough families. The Georgia agency did not 

meet its own target of providing assistance to 18,500 Georgians in 

the first 2 years (by September 2012). Instead, after 2 years (as of 

September 30, 2012), the Georgia agency provided this aid to less 

 49 As of March 31, 2017, the latest data available as of the drafting of this report.

50 Treasury did not hold the Georgia agency accountable to the targets set by the Georgia agency of 9,000 

homeowners assisted the first year, and an additional 9,500 homeowners assisted the second year. 

Treasury also did not hold the Georgia agency accountable to targets Treasury set in April 2012 of 250 new 

homeowners funded each month.
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 53 October 13, 2017

than 10% of that target—assisting only 1,708 homeowners. The 

Georgia agency withheld this aid to Georgians over the years, 

meeting less than 50% of its own target as of March 31, 2017 (the 

latest data available during the drafting of this report). By 

withholding this aid, and slow walking the aid it did distribute, the 

Georgia agency cut off Georgians’ access to these funds, leaving

thousands at risk of foreclosure without help available to 

homeowners in other states with similar situations.

• Designed overly strict and unnecessary criteria for the HHF 

unemployment program that made it harder for a Georgia 

homeowner to receive this assistance than homeowners in 

other states. In this audit, SIGTARP provides 10 examples of 

overly strict criteria. For example, when in 2012, the Georgia 

agency required that a homeowner be no more than 6 months 

delinquent on their mortgage to qualify, people all but stopped 

applying. For the HHF unemployment/underemployment 

program, the Georgia agency did not recognize common hardships 

like illness, disability, divorce, and military orders that can lead to 

unemployment or underemployment. These hardships are 

recognized in the other TARP housing program (Making Home 

Affordable), and for HHF by other state agencies. A Georgia worker 

has to show they lost their job in the last 3 years (later expanded 

to 4 years), when homeowners in other states do not have this 

limitation. The Georgia agency disqualifies a homeowner who 

resigned from their job from getting HHF assistance, even if it was 

due to illness, disability, or age. The Georgia agency accepts only 

severe underemployment of a 25% pay cut when other state 

agencies accept 10%. These and other criteria are not required by 

Treasury and far stricter than some other state agencies require in 

HHF. 

• Failed to eliminate overly strict criteria despite repeated 

warnings and recommendations. The Georgia agency’s 

mismanagement disadvantaged Georgia homeowners, making it 

harder for a Georgia homeowner to gain access to this Federal aid 

than homeowners in other states. The Georgia agency was 

repeatedly warned, and there were many recommendations to 

eliminate overly strict criteria. These recommendations came from 

Congressman Lewis, Congressman Henry “Hank” Johnson, 

SIGTARP, Treasury, and local non-profit groups.

• Required significant red tape, had a confusing online 

application, provided very little in-person help to apply, and 

had burdensome document requirements. The online 

application was confusing, and there was little personal assistance 
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 54 October 13, 2017

available. More than 8,000 Georgians started the application but 

did not finish it and produce requested documents within 30 days, 

an artificial and unnecessary cutoff, so the Georgia agency 

withdrew their HHF application. This may have been due to the 

Georgia agency’s burdensome document requests, for example, 

4 years of tax transcripts stamped by the IRS, 2 years of payment 

history generated by their mortgage servicer, and a separation 

letter from the prior employer showing that the homeowner lost 

their job through no fault of their own.

The question SIGTARP was left with was, “what are they waiting for?” The 

mismanagement of the Georgia agency appears to be rooted in its desire 

to provide aid to only its overly restrictive view of what is a “Responsible 

Homeowner.” The Obama Administration defined an irresponsible 

homeowner as someone who took out more of a loan than they could 

afford, and Treasury capped the mortgage for a homeowner receiving this 

Federal aid to the GSE conforming limit—around $424,100 for a singlefamily house in Georgia. Of the Georgians turned away, 99% had a 

mortgage below this cap. The Georgia agency added far more limitations 

and red tape than Treasury required or that existed for homeowners in 

other states for these same funds, putting Georgians at a disadvantage.

The Georgia agency set a very high bar for Georgians to receive Hardest 

Hit Funds, and a very low bar for itself to receive these funds. The Georgia 

agency ran this program “guarding” the dollars and adding “precautions.”

This made the Federal funds last, which is contrary to the urgent nature 

of this program, but continues to keep the Georgia agency funded while 

other state agencies wound down operations. The Georgia agency has 

kept $32 million for itself to pay its salaries and other expenses. SIGTARP 

has serious concerns given that the Georgia agency has distributed only 

less than half of the funds earmarked for homeowners, but kept 70% of 

the fund earmarked for its own expenses. If held to its own “responsible” 

standard, the Georgia agency should not have been paid when it did not 

meet its targets or Treasury’s targets for the number of homeowners 

assisted. The Georgia agency's track record is so poor that while other 

states took advantage of an additional $2 billion that Congress approved 

starting in 2016 for HHF, Treasury turned down Georgia for $33.5 

million, out of concern that the Georgia agency would not spend the HHF 

dollars already set aside for Georgians.

The Georgia agency’s mismanagement is a significant lost opportunity for 

Georgians, but a window of opportunity still exists with $164 million 

remaining available in the program. This opportunity should not be lost.

It will take wholesale changes in the Georgia agency, and in Treasury’s 

oversight, to stop the mismanagement and change course. SIGTARP 

makes 30 recommendations for improvement, and implores the state 
MISMANAGEMENT OF THE HARDEST HIT FUND IN GEORGIA

SIGTARP-18-001 55 October 13, 2017

agency and Treasury to adopt these recommendations fully and 

immediately.

If the Georgia agency reacts defensively to this report and sticks with the 

status quo, Georgians will continue losing a crucial aid that can speed 

their recovery from the housing crisis—aid that homeowners in other 

states have had access to for years. If mismanagement continues, Federal 

taxpayers will continue paying for underperformance and 

mismanagement, and Georgia homeowners will be on their own, without 

effective access to this Federal foreclosure prevention aid. Georgians have 

been disadvantaged by the Georgia agency for far too long.
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SIGTARP-18-001 56 October 13, 2017

Recommendations

1. Treasury should require the Georgia agency to increase in-person 

outreach events in hard-hit neighborhoods, including public service 

advertisements on television and the radio, as well as billboards and inperson events in hard-hit neighborhoods throughout Georgia. 

2. Treasury and the Georgia agency should take steps to increase the 

percentage of applicants receiving Hardest Hit Funds to at least twothirds of all who apply.

3. Treasury and the Georgia agency should change the Hardest Hit Fund in 

Georgia to increase the percentage of homeowners with limited incomes 

in hard-hit counties who qualify.

4. Treasury should direct the Georgia agency to eliminate criteria for 

underwater assistance that the home had to be purchased prior to 2012, 

and that a homeowner cannot be more than 90 days delinquent. 

5. Treasury should work with mortgage servicers to ensure homeowners’ 

mortgages are recast after they receive Hardest Hit Funds to reduce 

their principal balances.

6. Treasury should require, for all Hardest Hit Fund state agencies, countylevel public reporting of performance, including all who applied and 

were denied or had withdrawn applications (breaking out the numbers 

of applications withdrawn by the state agency). 

7. Treasury and state agencies should conduct county-level analysis, and 

implement steps resulting from that analysis, to increase the 

effectiveness of Hardest Hit Fund distribution to homeowners.

8. The Georgia agency should change its process for the remaining 

homeowners who applied, and reassess homeowners recently turned 

away.

9. Before closing the Hardest Hit Fund’s unemployment/underemployment 

program, Treasury and the Georgia agency should review the Georgia 

counties that are continuing with above-average unemployment and 

underemployment, and re-allocate sufficient funds from other programs 

back to unemployment/underemployment assistance to address the 

local need in those counties.

10. Treasury should require state agencies in the Hardest Hit Fund to 

recognize military hardships, and take action to increase distribution of 

this aid to veterans. 
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SIGTARP-18-001 57 October 13, 2017

11. Treasury should require state agencies to maintain records on why 

homeowner applications are withdrawn when the state agency has 

relevant information.

12. Treasury should ensure that state agencies allow common hardships 

that prevent Americans from paying their mortgages on time, such as 

illness, disability, death, and divorce, and other hardships that Treasury 

recognizes in the Making Home Affordable program to qualify for the 

Hardest Hit Fund.

13. Treasury should require all state agencies in the Hardest Hit Fund to 

recognize hardships dating back to at least 2008.

14. Treasury should direct state agencies in the Hardest Hit Fund not to 

disqualify homeowners who were delinquent on their mortgages at the 

time of their hardship.

15. Treasury should direct state agencies in the Hardest Hit Fund not to 

disqualify homeowners based on the length of their delinquency.

16. Treasury should direct state agencies in the Hardest Hit Fund with 

available funds to define underemployment as requiring not more than 

a 10% reduction in income.

17. Treasury should direct state agencies in the Hardest Hit Fund to consider 

the full circumstances of the homeowner’s reasons for unemployment or 

underemployment.

18. Treasury should direct all state agencies in the Hardest Hit Fund to 

allow homeowners to combine all forms of applicable Hardest Hit Fund 

assistance in that state, where sufficient funds are available.

19. Treasury should direct state agencies to allow a homeowner who 

received HAMP or MHA assistance to also receive Hardest Hit Fund 

assistance.

20. Treasury should prohibit state agencies from automatically 

disqualifying a homeowner who filed for bankruptcy from receiving 

Hardest Hit Funds.

21. Treasury should immediately require the Georgia agency to eliminate 

criteria that do not exist in other states and eliminate criteria that do 

not reflect the reality of Georgians (as defined by the reasons why 

homeowners were denied for HHF). 
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SIGTARP-18-001 58 October 13, 2017

22. Treasury should direct the Georgia agency to review and reconsider 

all homeowners whose applications were denied or withdrawn in the 

last year with the eliminated criteria.

23. Treasury should require the Georgia agency to streamline its online 

application so that a homeowner only has to provide basic information. 

24. Treasury should require the Georgia agency to provide every 

homeowner the option to receive application intake counseling, and the 

choice of receiving that assistance either in-person or telephonically.

25. Treasury should require the Georgia agency to eliminate the 

underwriting requirement that a homeowner’s Hardest Hit Fund 

application is withdrawn after 30 days, even when a grace period is 

added. 

26. Treasury should eliminate all state agencies’ forced withdrawal of a 

homeowner’s Hardest Hit Fund application for one year from the time 

the homeowner begins an application.

27. Treasury should direct state agencies to eliminate requirements that a 

homeowner provide tax transcripts or mortgage payment histories from 

servicers in order to qualify for the Hardest Hit Fund. 

28. Treasury should work with each state agency to streamline document 

requirements to match what other state agencies require for Hardest 

Hit Fund assistance.

29. Treasury should require the Georgia agency to increase its use of nonprofit housing counselors, other than ClearPoint, for intake, and divide 

applications among various counselors rather than send them all 

through ClearPoint. 

30. Treasury should require the Georgia agency to set target numbers of 

homeowners assisted through each counselor and have the Georgia 

agency hold all of its housing counselors accountable, including through 

performance-based incentives and/or withholding payment, for 

increasing the number of hard-hit homeowners getting into the Hardest

Hit Fund program.
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SIGTARP-18-001 59 October 13, 2017

Management Comments and SIGTARP’s 

Response

In response, Treasury said that HHF's structure has maximum flexibility 

including in the rate of disbursing funds. In 2012, Treasury set numerical 

targets for HHF disbursement in Georgia. Rather than hold the Georgia 

agency accountable to Treasury-set targets, Treasury continued to pay 

the Georgia agency nearly $32 million for salaries and other expenses. 

Treasury also responded saying that SIGTARP is recommending uniform 

eligibility criteria, which is not true. SIGTARP’s recommendations are 

designed to hold the Georgia agency accountable to Treasury targets and 

stop mismanagement.

Treasury also responded to the audit saying the funds are under a “useor-lose” requirement, meaning that funds not used in a timely fashion will 

be reallocated to another state agency. That is even more reason for 

Treasury to stop the mismanagement of HHF in Georgia. Treasury ends 

its response saying it is winding down TARP. HHF is not winding down, 

but is instead, ramping up. Treasury expanded and extended the Hardest 

Hit Fund in 2016 by $2 billion to be spent by December 31, 2021, four 

years from the original end date. 
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SIGTARP-18-001 60 October 13, 2017

Appendix A—Objective, Scope, and 

Methodology

SIGTARP performed this performance audit under authority of the 

Emergency Economic Stabilization Act of 2008 (EESA). 

SIGTARP conducted this audit upon request by Congressman John Lewis.

SIGTARP conducted this audit from September 2016 through September 

2017 in Washington, D.C., and at various locations throughout Georgia 

including Atlanta, Clayton, DeKalb, Fulton, and Gwinnett counties.

SIGTARP’s objectives were to determine whether TARP’s Hardest Hit 

Fund program (HHF) has adequately served those most in need of this 

assistance in selected counties, including homeowners in minority 

neighborhoods, and to identify areas for improvement at the contractor, 

county, state, and federal level in Congressman Lewis’ district in Atlanta 

and surrounding areas. The scope of this audit covered a review of 

Georgia HHF programs and related program and administrative 

documentation since its inception in 2010. To accomplish the objective of 

the audit, SIGTARP applied GAO standards to determine mismanagement.

GAO defines mismanagement as “creating substantial risk to an agency’s 

ability to accomplish its mission.”

The scope of this audit included a review of individual homeowners who 

applied and who were turned away (denials and withdrawals) assistance

for all Georgia HHF programs, as of March 31, 2017, in Clayton, DeKalb, 

and Fulton counties. SIGTARP obtained information from the Georgia 

state agency regarding the reasons why homeowners were denied HHF 

assistance. To identify the incomes of these homeowners, SIGTARP 

obtained and analyzed applicant data from the Georgia state agency.

Using CoreLogic, U.S. Census Bureau, and the Georgia state agency’s data 

as of March 31, 2017, SIGTARP obtained distressed mortgages in all of 

Clayton’s, DeKalb’s, and Fulton’s zip codes (total of 61) and identified 16 

predominantly minority and/or Black or African American zip 

codes/neighborhoods in Clayton, DeKalb, and Fulton counties that had 

combined higher denial and withdrawal rates relative to the other 45 zip 

codes in those counties. A distressed mortgage is defined by any or all of 

the following factors: completed foreclosure sales since February 2010, 

delinquent mortgages, and properties in negative equity.

SIGTARP analyzed HHF Georgia’s quarterly performance data, and 

performed a review of Georgia’s, as well as other state agencies’ HHF 

program eligibility requirements. This included a review of Treasury’s 

agreements with state agencies, and program guidelines and procedures.
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In addition, SIGTARP collected information regarding active and closed 

military bases in Georgia. 

SIGTARP held interviews with officials at the Georgia state agency, 

housing counseling agencies, Atlanta Legal Aid, and homeowners to gain 

an understanding of their record keeping for maintaining data on 

homeowners denied for the program.

Limitations on Data

SIGTARP relied on the Georgia state agency to provide applicant-level 

data and data concerning why applicants were denied. It is possible that 

the documentation provided by state agencies to SIGTARP did not reflect 

a comprehensive response to SIGTARP’s data request, potentially limiting 

SIGTARP’s review.

Use of Computer-Processed Data

SIGTARP relied on computer-processed data for this audit. Specifically, 

SIGTARP relied on Georgia state agency data provided to SIGTARP to 

determine the numbers and percentages of applied, withdrawn, and 

denied homeowners and their incomes. SIGTARP relied on Treasury’s 

quarterly performance reports to determine the numbers and 

percentages of approved homeowners. SIGTARP did not validate the 

accuracy of the underlying data provided by Treasury or the state 

agencies. 

Internal Controls

SIGTARP performed a limited review of internal controls by interviewing 

Georgia state agency officials and reviewing Treasury compliance reports 

and state agency policies and procedures.

Prior Coverage

SIGTARP has covered the HHF program in seven previous reports:

• On April 12, 2012, SIGTARP released an audit report titled, 

“Factors Affecting Implementation of the Hardest Hit Fund 

Program.” 

• On April 21, 2015, SIGTARP released an audit report titled, 

“Treasury Should Do Much More to Increase the Effectiveness of 

the TARP Hardest Hit Fund Blight Elimination Program.” 
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• On October 6, 2015, SIGTARP released an evaluation report 

titled, “Factors Impacting the Effectiveness of Hardest Hit Fund

Florida.” 

• On June 16, 2016, SIGTARP released an audit report titled, 

“Treasury’s HHF Blight Elimination Program Lacks Important 

Federal Protections Against Fraud, Waste, and Abuse.” 

• On September 9, 2016, SIGTARP released an audit report titled, 

“Waste and Abuse in the Hardest Hit Fund in Nevada.” 

• On January 11, 2017, SIGTARP released an evaluation report titled, 

“Improving TARP’s Investment in American Workers.”

• On August 25, 2017, SIGTARP released an audit report titled, 

“Unnecessary Expenses Charged to the Hardest Hit Fund.”

SIGTARP also issued an alert letter on December 14, 2015, that addressed 

a risk related to diverting TARP funds to demolish lived-in properties, 

which could undermine the success of HHF’s Blight Elimination Program.

This performance audit was conducted in accordance with generally 

accepted government auditing standards established by the 

U.S. Government Accountability Office. Those standards require that 

SIGTARP plan and perform the audit to obtain sufficient, appropriate 

evidence to provide a reasonable basis for our findings and conclusions 

based on our audit objectives. SIGTARP believes that the evidence 

obtained provides a reasonable basis for our findings and conclusions 

based on our audit objectives.
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Appendix B—Management Comments
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SIGTARP-18-001 October 13, 2017

SIGTARP Hotline

If you are aware of fraud, waste, abuse, mismanagement, or misrepresentations associated with the Troubled 

Asset Relief Program, please contact SIGTARP.

By Online Form: www.SIGTARP.gov 

By Phone: Call toll free: (877) SIG-2009

By Fax: (202) 622-4559

By Mail: Office of the Special Inspector General

for the Troubled Asset Relief Program

1801 L Street., NW, 3rd Floor

Washington, DC 20220

Press Inquiries

If you have any inquiries, please contact our Press Office: 202-927-8940

Legislative Affairs

For Congressional inquiries, please contact our Legislative Affairs Office: 202-622-4613

Obtaining Copies of Testimony and Reports

To obtain copies of testimony and reports, please log on to our website at www.SIGTARP.gov.