CHARLESTON, S.C. --- South Carolina officials didn't apply for federal money that pays for free foreclosure counseling, leaving local officials scrambling to find money elsewhere without success.
Consequently, the state's top counseling program is in question, putting South Carolina in a position to run out of money before even some of the hardest hit states.
"We don't know where the next funding is coming from, and the free foreclosure counseling is in jeopardy if another round of funding (doesn't happen)," said David Geer, the executive director of Family Services Inc.
The free foreclosure help could start up again in the spring because Congress passed another $65 million for the program this month. South Carolina's housing agency and nonprofits would have to compete for that grant money, which could trickle down to the groups as early as March.
But Family Services' roughly $2.5 million in foreclosure help money will be gone by then.
As a result, more South Carolina homeowners will have to move through the loan modification process alone, leaving them with a worse chance of saving their homes.
People who receive professional counseling are 60 percent more likely to avoid foreclosure, according to the Washington, D.C.-based Urban Institute.
Mortgage counselors help homeowners through the complicated refinancing process and work with banks to keep people in their homes.
Foreclosure prevention programs across the country have been powered by about $355 million in federal money made available to nonprofits and state housing finance agencies through grants.
The South Carolina State Housing Finance and Development Authority sat out the chance to apply for that money three times after a staffer mistakenly thought the state would receive the same amount of money if only Family Services Inc. applied.
Instead, hundreds of nonprofits, including Family Services, competed for a pool of money that was smaller than what state housing finance agencies could have applied for.
State housing finance officials later reversed their policy, saying they'll apply for future rounds of funding, but that might not happen for months.
Even foreclosure-devastated states such as Florida, Nevada and California expect their money will last longer.
Those three states recently were identified as having the worst foreclosure rates, according to California research firm RealtyTrac Inc.
South Carolina ranked 30th.
North Carolina, Michigan, Georgia and Nevada expect their funds to last until June 30, the last date to spend the money according to the grant's provisions.