Author: Sandra LarsonBruce Marks, founder and CEO of the Neighborhood Assistance Corporation of America (NACA) gives an introductory speech to a crowd waiting for NACA’s “Save the Dream” event to begin at the World Trade Center in Boston. The event, which ran from Oct. 31-Nov. 2, drew thousands of New York and New England homeowners hoping to negotiate loan modifications with lenders.
The nonprofit Neighborhood Assistance Corporation of America (NACA) held a “Save the Dream” event in Boston last month, drawing thousands of struggling homeowners hungry for a chance to sit down with lenders and possibly walk away with a restructured mortgage they can afford.
When the three-day event opened at 9 a.m. on Sunday, Oct. 31, the lobby of the Seaport World Trade Center was jammed and the line stretched out the door and around the corner.
Adeline Laguerre of Roslindale arrived the day before and waited in the lobby all night. She bought her home in 2004, she said. But two years ago she lost her job as a home health aide, and her husband’s taxi driver earnings didn’t pay the mortgage. The couple made some headway toward a loan modification, but the process has stalled.
“When they said to pay half, I sent it,” Laguerre said, “But then in June [2010], they said it’s not enough and they wouldn’t accept it.”
Now she has until Nov. 22 to save her home. Clutching her carefully-assembled paperwork, she said, “I know God will do something for us.”
Allright Paul, another early arriver, stood in line near Laguerre.
“We just can’t keep up,” Paul said. “Money is getting tighter and tighter.”
Payments were easy enough when he and his wife purchased their Brockton home in 2001, he said, but after five years the payments shot up 25 percent. His wife works at a hotel, but it’s seasonal, and his hours as a mental health counselor have been cut, he said. With all their other expenses, they are struggling with the mortgage and have received a notice of foreclosure.
They’ve been working with IndyMac, their current mortgage servicer, but the process — going on a year now — has been frustrating.
“We send them every piece of paper they ask for,” Paul said. “Then when we call them, they say our papers have been lost.”
NACA promises to cut through this sort of infuriating runaround, a common complaint by people trying to secure loan modifications through the federal Home Affordable Modification Program (HAMP) announced in 2009. At Save the Dream events, borrowers meet lenders in person, with up-to-date income records and budget in hand, which can go a long way to achieving a fast, straightforward deal.
Massachusetts has not been as hard hit in the nationwide foreclosure crisis as other parts of the country. But even so, nearly 11,000 properties were foreclosed on in Massachusetts in the first nine months of 2010, more than half again as many as the same period last year, the Boston Globe recently reported, citing figures from the Warren Group, a real estate tracking firm.
As the line grew before the start of Boston’s event, NACA Founder and CEO Bruce Marks worked the crowd with a megaphone in hand, pausing every dozen yards or so to repeat his welcome and introduction before anxious but hopeful faces.
“If you’ve filled out your paperwork already, you’ll go straight to meet your lender,” he called out. “Our goal is to get it done today.”
Every major lender is under contract with NACA and most were at the event today, he told them. “The decision-makers are here. They can’t tell you they can’t make a decision,” he said.
Marks, who was a union activist for the Hotel Workers Union in Boston before turning to housing advocacy, is known for aggressive tactics that he calls “nonviolent bank terrorism.” One unorthodox strategy is to take groups of distressed homeowners on bus tours through wealthy suburbs, dropping in to confront bank CEOs at their homes on Sunday morning. Recently he distributed flyers with JPMorgan Chase CEO Jamie Dimon’s picture and phone numbers, urging angry homeowners to call Dimon at all hours.
Inside the sprawling World Trade Center, amid a highly organized sea of lender tables and counseling stations, Marks explained the Save the Dream process. For homeowners with stable income, even if low, NACA proposes restructuring the loan, either by lowering interest rate or reducing principal. For unemployed or underemployed people, they propose a “forbearance plan,” in which only very small payments are made until income is restored.
“If someone comes through NACA,” Marks said, “they’re likely to save $500 to $1000 in payments.”
Katina Fields, NACA’s communications and public affairs coordinator, said Save the Dream conferences so far have had about an 80 percent success rate, with 30-35 percent of attendees walking out with a same-day solution, and the others leaving with a contingent deal that is usually settled within weeks.
What sort of magic is this, when so many homeowners have been denied or are ready to throw in the towel on drawn-out modification attempts?
“We do aggressive advocacy. We hold the CEOs accountable,” Marks said. “And we do the job for them.”
NACA takes a load of work off the banks by counseling homeowners, forcing them to create an accurate, detailed budget — including expenses not included in the HAMP formula, Marks said — and helping them assemble all needed documents — and verifying at the last minute that everything is current. The banks can’t argue that paperwork is incomplete or they don’t remember receiving it.
Marks also stressed the value of lenders meeting their customers face-to-face.
“It brings home that it’s a human, a family, that there are consequences to their decisions,” he said. The recently publicized “robo-signing” of foreclosure documents shows how banks have lost personal accountability, he said. “That was 10,000 families, not 10,000 affidavits.”
Despite his anti-bank actions and statements — or perhaps because of them — Marks has forged productive ties with major lenders. Bank of America alone had 90 representatives at the Boston event, each equipped to approve a modification plan on the spot.
Angeanette Dowles, a Bank of America vice president in the Home Retention Division who has worked many of these conferences, echoed Marks’s explanation of why the process works here.
“NACA does a good job of prepping the customer,” she said simply. The problem when customers seek modifications on their own, she said, is their documents often “trickle in over weeks,” making some portion of the information out of date at any given time.
This was the twenty-fourth Save the Dream event NACA has conducted across the United States in the past three years, and the first in New England. Organizers predicted it would be well-attended, though not in the kind of numbers they saw recently in Los Angeles, where 45,000 homeowners flooded the conference over five continuous days. “A few thousand” had registered in advance for the Boston event, a NACA staff member said.
By 11 a.m. on the first day, about 1,500 people had crossed the threshold and were in some stage of orientation, counseling or meeting with lenders. Newcomers continued to arrive, but the line outside had already vanished.
Both NACA representatives and Bank of America’s Dowles conceded that not everyone will be able keep their home. If a customer has had no income for a long time, or simply cannot come up with any reasonable payment amount, there’s not much lenders can do.
“We’re not going to sell them a dream,” said Dowles. “If it’s not affordable, it’s not affordable.”
For Paul, the outcome was somewhere between win and lose. It turned out IndyMac was not on site the first day, so he had to return Monday for his face-to-face meeting. He was offered a three-month trial modification that reduces his payments from $2040 to about $1800.
“It’s still too high,” Paul said in a telephone conversation afterward, “but I’m going to go through the trial. If I prove I can pay on time for three months, they’ll make a decision to get me a stable amount. It may be lower.”
He worries that the deal may involve an adjustable interest rate, which he absolutely does not want. NACA has pledged to help him with the next step, he said, and he was advised not to sign anything without consulting NACA first.
Paul said he is still glad he came, and he could see that other borrowers at the event had greater success working with other lenders.
“I won’t say my experience was failure, or success,” he said. “I would say it’s better, for now. It seems to work for some people, but not quite for me. At least the foreclosure letter is behind me. No one is coming to get me now.”
