Non-Profit Group Helps Strained Homeowners

Nonprofit’s program to extract better terms from lenders draws thousands from near and far.

Desperate to save her father’s California home from foreclosure, Kelly Gonzalez hopped a plane with him Wednesday and flew to Charlotte, where they camped overnight in cold, drizzly rain.

Their mission: to be among the first struggling homeowners to get help from the Neighborhood Assistance Corporation of America, a nonprofit group with a Robin Hood-style reputation for forcing banks to modify predatory loans.

By about 10 a.m. Thursday, the monthly mortgage payment on Israel Gonzalez’s Van Nuys, Calif., home had been reduced from $3,100 to $1,730. “It was worth it,” Kelly Gonzalez said. “We had faith in what they could do.”

That kind of fervent, almost desperate, hope drew thousands to The Park Thursday, where they waited hours to get free help in modifying their loans. NACA, as the Boston-based group is known, has said it expects 50,000 people to attend the event from Thursday through Monday, part of a national tour.

While NACA success stories are plentiful – and touted from a central stage during the event – it’s not clear how many people will emerge with modified loans that allow them to make reduced payments and keep their homes. After past events, some borrowers have complained that their problems weren’t resolved as quickly as expected or at all.

Founder Bruce Marks, NACA’s CEO and ringmaster for the five-day event, said he expects 30 percent to 50 percent of the people who attend to get a solution to their loan issues in the five days. By 45 days out, he said, about 80 percent will. For those with unresolved issues, he said, NACA keeps working to keep foreclosure at bay while it seeks a solution.

“It’s getting done,” Marks said. “Everything’s submitted to the (mortgage) servicer and we’re holding the servicer responsible.”

NACA doesn’t provide detailed numbers on how many homeowners it has assisted. Marks said the Save the Dream tour has helped more than 100,000 so far, out of the hundreds of thousands of people that have attended the events.

Marks said tracking the loan modifications is difficult because the nonprofit groups needs information from mortgage servicers who approve the final loan restructurings. At the same time, the group is taking in thousands of new submissions. Borrowers also can slow the process by not providing all of the necessary documents or by not checking the status of their loans.

He acknowledged that some borrowers may face delays in getting modifications finalized and that not everyone gets a solution. The program is improving, he said, as more mortgage servicers and investors agree to work with NACA. It recently added a major investor, Freddie Mac.

Marks said it may seem counterintuitive for the group to move on to the next city before finishing the workload it already has, but he said the approach is necessary. “We have to keep the pressure on them,” he said of the lenders.

Expanding with Hard Times

Just this week, the Obama Administration acknowledged that lenders aren’t modifying loans fast enough and announced plans to monitor them more closely. Of 3.2 million eligible loans in which borrowers were at least two months behind, only 20 percent were in the trial modification stage.

Marks contended his program is better, modifying loans faster and permanently. He’s testifying before the House Financial Services committee on Tuesday and is also meeting with Treasury officials to explain the program.

A self-described “bank terrorist,” he for years has led protests outside the homes of CEOs whose banks he believes are hurting borrowers. That has pressured lenders to sign loan modification agreements with the group. The first to fall in was Countrywide Financial, now owned by Charlotte’s Bank of America, in October 2007.

The group also makes affordable loans to low-income borrowers, but its focus lately has been on its “Home Save” efforts as the foreclosure crisis has unfolded. The first Save the Dream event was last year in Washington. He plans 30 more next year.

The group has expanded rapidly as it ramps up this work. According to its latest 990 tax filing, NACA’s overall expenses jumped from $6.8 million in 2007 to $22 million last year, while total revenue soared from $9.4 million to $28 million.

A big chunk of NACA’s new revenue was public money. While the organization received $1.7 million in contributions and grants in 2007, that number jumped to $14.7 million last year.

The biggest source of the grants is the National Foreclosure Mitigation Counseling program authorized by Congress and administered by a nonprofit called NeighborWorks America. NACA was awarded $31 million in two phases during 2008 and $3.5 million in 2009, although the money isn’t all doled out at once.

NACA has also received a total of $2.3 million in the past two fiscal years from the Department of Housing and Urban Development to support counseling programs.

NeighborWorks does not provide performance data on individual groups, spokesman Douglas Robinson said. But a recent report by the group and the Urban Institute found that homeowners who work with a counselor to avoid foreclosure are 60 percent more likely to keep their homes, compared to homeowners who go it alone.

“The NFMC program is working well,” Robinson said. “It shows that people in danger of foreclosure if they go to a counselor they have a better result.”

Marks said NACA doesn’t want to get dependent on government money. He wants to use it to develop its software and make other infrastructure improvements. His hope is that the group’s focus will one day return to making new home loans, leaving lenders to modify their own loans. For now, he said: “We don’t rely on the banks to do the job. We do the job for them.”

NACA’s employment also has grown. The 2008 return shows 472 employees, though Marks said the organization has about 1,500 today. With the help of state and local tax incentives, the group has been rapidly hiring at its Charlotte office, which helps coordinate the tours. Marks said this week the group has about 700 people in Charlotte. It has announced plans to hire a total of 2,000 people here by the end of next year.

Marks’ salary has also jumped from about $75,000 to $146,849. “It’s a good salary. I think it’s reasonable,” he said.

Long Waits, High Stakes

NACA officials are holding court at The Park, the cavernous expo center formerly known as the Charlotte Merchandise Mart. The Charlotte stop is the 12th on “The Save the Dream” tour, which heads to New York next week.

Their main operations center fills one football-field sized hall, offering a widescreen window onto the nation’s mortgage crisis. Some 350 mortgage counselors sat at row after neatly arranged row of computer stations, talking quietly with homeowners. When they’d collected enough paperwork, they held their files aloft, and “runners” took them to be scanned in to NACA’s computer system.

Hundreds of unsmiling homeowners stood in line or sat in rows of folding chairs, waiting their turn. Dozens of NACA workers dashed about, many of them wearing brightly colored T-shirts with slogans such as “Financial Predators Beware.”

At the far end of the room, dozens of representatives from some of the nation’s major mortgage lenders peered into their laptops at homeowners’ files. Groups of anxious residents sat waiting to speak with them, too. Sometimes lenders agreed to restructure the loan on the spot. Sometimes paperwork has to be mailed. Sometimes NACA has to negotiate further.

Marks was onsite throughout, patrolling the floor in his black, NACA-emblazoned uniform. Employees consulted with him. Borrowers approached, asking for help directly from the boss or offering hugs of thanks. Even an aide to Rep. Larry Kissell, D-N.C., stopped by. Marks suggested the congressman should visit.

The wait was often long and tedious, but homeowners were determined. Holly Holland, a nurse from Eastern North Carolina, drove four hours to Charlotte with her 9-month-old son, Brayden, in tow. She said the child had medical problems, and doctor’s bills drained the family’s bank accounts. She said she had been talking on the phone with the lender, Countrywide, for months, and was now trying to pull her 1,300-square-foot home out of foreclosure proceedings.

Soothing her crying son, she waited among dozens of others for a chance to talk with bank representatives sitting at long tables, peering into laptop computers.

“We’re not saying we want a next-to-nothing house payment. We just want a fair shot at trying to get things back to where they were,” she said. “We’re hoping this will be our break today.”

Not all the modifications go smoothly.

As Marks spoke with reporters, Helen McDaniel interrupted him to say she’d driven in from Atlanta and had been waiting for help since 11 p.m. the night before. “I’m hungry, and I haven’t had a shower,” she said.

She told reporters she had spoken to a NACA counselor before driving to Charlotte and explained that she was in Chapter 13 bankruptcy. Now that she’d arrived, representatives for the company handling her mortgage, Litton Loan Servicing, said they couldn’t speak with her because bankruptcy rules prohibited it.

“My problem is NACA should have known that,” she said.

Marks eventually got it resolved – by calling the head of Litton Loan Servicing. McDaniel got a forbearance agreement that gave her family six months of breathing room.