Despite Millions of struggling American Homeowners seeking Gov't assistance to remain in their residences via Loan Modifications/ Loan Restructures from Pres. Obama's Making Homes Affordable (HAMP) or NACA's "Save the Dream" Tour, only about 4% (31,000 homeowners) applicants were approved.
This is absolutely unreal and totally unacceptable!
Something is most definitely wrong with this picture!
So Pres. Obama and NACA's programs are basically ineffective?
I've included NACA in this blog post because NACA employees use Pres. Obama's HAMP program Debt Ratio formula when assisting homeowners during "Save the Dream" tours.
4%?? Only 31,000 people??
According to several news reports (listed below) Banks are blaming the low number of approved Loan Modification/ Loan Restructure applications on lost paperwork.
What kind of lame excuse is that?
Where are the billions of dollars Pres. Obama and Congress allocated for Foreclosure Prevention earlier this year?
Better yet why won't NACA CEO Bruce Marks open his books to show real numbers of long term, proven success rates from his program to Congressional members?
Why is it ACORN CEO Bertha Lewis was the ONLY Federally Funded Housing program official required to open her organization's books to Congress?
Could it possibly be that Obama's HAMP program was perhaps intentionally set up to only approve a very small number of Loan Modifications in order to help banks stay profitable?
Doesn't this sound like something Tim Geithner might do?
No offense but for some reason I don't trust Tim Geithner. (Sorry Tim)
Could it be that participating Banks and NACA's CEO Bruce Marks are being paid by H.U.D. and Congress for each Submitted Application versus each APPROVED Loan Modification/ Loan Restructure application? (Permanent Loan Mods)
OMG! Isn't that considered a Scam??
When assisting Homeowners do NACA employees ensure all required, up to date paperwork is included with each Loan Modification/ Loan Restructure application?
So in essence it really doesn't matter to NACA or Pres. Obama's HAMP Program Administrators if Loan Mod applicants are approved for Long Term results or not, because Banks and NACA will be paid regardless.
Seems as if NACA's CEO Bruce Marks may have secret ties to Wall Street despite his claims of being a radical "Bank Terrorist".
Thus I'll ask this question again:
Why is it Congress jumped so quickly to deny funds for ACORN's Housing program unless CEO Bertha Lewis could prove her program was successful (by opening her books) but NACA's Bruce Marks can still receive Federal & State Funds without doing so?
Something is definitely wrong with this picture don't you think?
Again I'm speaking of Long Term or Permanent results, NOT 90-day trial periods.
Also due to the Recession millions of Homeowners are now living in "Underwater Homes", which means Property Tax values on those homes have dropped significantly.
When banks are processing Loan Modification applications, do they take that factor into consideration?
If so the Escrow on those loans should be reduced as well correct?
However in regions like Charlotte-Mecklenburg City & County officials have chosen to INCREASE Property Tax values on thousands of Underwater Homes.
Of course most of the residents living in those Underwater Homes are Middle Class & Low Income Minority Citizens.
What's the purpose of approving Homeowners for a Loan Modification/ Loan Restructure without including the decreased Tax Value on residential properties?
Considering the current Economic Recession our country is experiencing, why are City and County Officials Nationwide choosing NOT to lower Property Tax Values on homes, especially homes located in Middle and Low Income Communities as a best practice for their struggling Constituents?
Hmmm. This is certainly something to think about and inquiring minds want to know.
I propose that Congress should call Tim Geithner and Bruce Marks to Capitol Hill for inquiries about the operations of these two weak Foreclosure Prevention programs.
Immediately afterward Congress needs to than launch thorough investigations into Pres. Obama's HAMP and NACA's so-called "Mortgage Relief" programs.
Investigate as in requesting Pres. Obama's HAMP program officials & NACA CEO Bruce Marks to provide clear evidence and proof each program (since inception) has successfully helped at least close to 1 Million (combined) Homeowners versus just a paltry 31,000.
Don't you agree?
After all both programs are being funded with Taxpayer money just like ACORN was.
Only 4% (31,000 people) approved for Long Term results Indeed!
More tax dollars for the self-proclaimed Bank Terrorist
Despite receiving taxpayer money, NACA doesn’t provide public reports on either its loan-brokerage business or its campaign to modify mortgages. Jim Campen, an economics professor emeritus at the University of Massachusetts, Boston, says he tried in the 1990s to analyze the performance of loans arranged by NACA, but Mr. Marks refused to provide data.
Mr. Marks says he feared the data would be used by another nonprofit to discredit his group. NACA does provide information to lenders that work with it, he says, but sees no duty to disclose it to the public.
“He’s been very effective in shaking money out of the banks,” says Mr. Campen, but “he’s not one to open up his records to public scrutiny.” Wall Street Journal
Article dated * May 20, 2009
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NACA’s “Save the Dream Tour” Now Disappointing Thousands in Phoenix
It started this past July 31st and went through August 3rd, and 40,000 very nervous homeowners waited in long lines in the hopes of saving their dreams.
One woman, a 46 year-old single mom who had lost her job, fallen behind on her bills, but was working again, waited apprehensively to find out if her lender, Wells Fargo, would modify her loan or throw her out in the street. (I know that’s a harsh way of putting it, but I’ve decided that there’s been enough soft pedaling on this point.)
The event was yet another brought to homeowners by the Neighborhood Assistance Corporation of America, or NACA for short. The event’s brochure promised “Same Day Solutions” for homeowners who would get their loan modifications approved on the spot by many of the largest lenders and servicers in the country.
Bank representatives, dressed in their golf shirts with embroidered bank logos, would be on hand and would get things done for homeowners on a while you wait basis. NACA, a nonprofit based in Boston would be there with hundreds of housing counselors.
Wow. When I first heard about this whole “Save the Dream” thing, I thought it sounded absolutely fabulous.
When our single mom left the event that day she felt terrific. She was confident that her home would now be saved. A NACA housing counselor had reviewed her financial documents, and then she had met with a representative from Wells Fargo, who had agreed to modify her loan, taking her interest rate down from 6.375 to 4.375, and cutting her payment by more than $200 a month. Wells also agreed to a forbearance agreement that would allow her to skip the next six payments, and tack the amount onto the back end of the loan.
She was so happy.
The Wells Fargo representative couldn’t give her a written agreement, but it was a direct contact with her lender, and she watched as the representative wrote her name down along with her phone number and the promised interest rate… right on her NACA workbook.
She was so happy.
Fast forward to September 22nd, eight weeks later when she received a letter from Wells Fargo that specified very different terms than she was promised. In the letter it said that at the end of a six-month moratorium on payments, she would have to pay a balloon payment of all six payments missed.
So, as you might expect, our single mom tried to call her Wells Fargo representative at the number she had been given while she was saving her dream two months earlier… but she was never put through to her. Instead, Wells Fargo now told her to stand by… because Wells would be contacting her in a few months, at which time she could apply for a loan modification! And even better, Wells now said that it had no record of the agreed to interest rate reduction.
So, next she called NACA, left voice mails and sent emails but never got a response. And wouldn’t you know it… the identification number that she was given to track her file online on the NACA website didn’t work. Darn the luck.
So, now our single mom is concerned. She’s facing a balloon payment in January and is once again scared that she will lose her home… the home she purchased in 2002 with a 20% down payment…. the home in which she has close to 50% equity, but can’t refinance because of her credit score.
Now she’s angry. Very angry, I would think.
Here’s what she told the St. Louis Beacon:
“I’m angry at both the bank and the organization — Wells Fargo and NACA. Is the idea of ’scam’ in my mind? Yes. And that’s a quick turnaround for me. But, it was a very difficult 40-minute call I had with the bank — to see what I thought was a gift, of sorts, a break, just kind of disintegrate.”
NACA’s CEO is Bruce Marks, and he’s known for his outrageous acts in defiance of banks. I read about the guy and frankly, had to like him. For a while, he was delivering old, crummy furniture to the front lawns of bank executives on weekends. Pretty cool, right? Now I’m not so sure.
When Bruce was asked for numbers on how many St. Louis homeowners have received loan modifications and how many are in some sort of pending status, all he would say is that “it’s a rolling number”. It’s apparently a number that rolls. Bruce went on to say that that the focus would be on completing pending cases before the tour would resume in Los Angeles in late September. The “vast majority” will be completed by the end of this week, he told the St. Louis Beacon.
Were they? I don’t know. I can’t find any published numbers anywhere. I sure hope “the vast majority” of the 40,000 people that attended the NACA “Save the Dream” event… had their dream saved.
But I’m skeptical. Because when you consider that, according to the administration’s report cards that were published on August 9th, Bank of America only modified 4% of its eligible loans. Bank of America is the country’s largest mortgage holder, so it seems hard to imagine that the “vast majority” of 40,000 homeowners could save a dream out of that 4%. Maybe I’m not getting the math right.
At least NACA provides their housing counselor services FREE! That’s right, they don’t charge any of those distasteful up front fees everyone is so concerned about. Nope, NACA gets their money the old fashioned way… from the taxpayers… well, from the government who gets their money from the taxpayers. In fact, NACA recently got $16 million in government funding to provide housing counselors to distressed homeowners. But that’s not considered an up front fee, I suppose. So, you see… that’s free right there.
Oh, and one more thing… just for fun I looked up NACA on the Better Business Bureau Website and guess what? You guessed it… an ‘F’.
NACA’s Save the Dream? Or just another government funded nightmare?
Gov't Mortgage Plan Provides Little Permanent Help
The Obama administration's embattled mortgage relief plan has provided permanent help to only 4 percent of borrowers who have signed up, weak results that could threaten the housing market's recovery.
Among big lenders, Bank of America Corp. had the worst performance in the Treasury Department report card released Thursday. The nation's largest lender completed just 98 modifications for the 160,000 borrowers who had signed up by the end of November. GMAC Mortgage had the most modifications of any lender, just 7,100.
About 760,000 have signed up for the program since it launched in March. But as of last month, just over 31,000 homeowners had received permanent loan modifications. Nearly the same number have fallen out of the program completely either because they missed payments or were found to be ineligible.
The report shows the administration is not going to hit its long-term target of helping up to 4 million borrowers with modified loans, said Ted Gayer, an economist at the Brookings Institution.
The more borrowers the program can't reach, the more foreclosed homes will spill onto the market, pulling down home prices. About 14 percent of homeowners with a mortgage are either behind or in foreclosure.
''Nobody really knows how big that wave will be,'' Gayer said.
The Treasury Department said it will step up pressure on the industry to improve. The administration's focus is to ''get as many of those eligible homeowners as possible into permanent modifications,'' said Phyllis Caldwell, chief of Treasury's homeownership preservation office.
When the poor progress was clear last summer, Treasury set a goal of enrolling up 500,000 borrowers by Nov. 1. With the clock ticking, many lenders started giving homeowners verbal approval for a temporary modification.
''They were going to do anything to hit that number,'' said Marietta Rodriguez, national director of homeownership programs at NeighborWorks America.
Under the program, eligible borrowers who are behind or at risk of default can have their mortgage interest rate reduced to as low as 2 percent for five years. They are given temporary modifications, which are supposed to become permanent after borrowers make three payments on time and complete the required paperwork, including proof of income and a financial hardship letter.
Lenders blame the low success rate on borrowers who don't return the necessary paperwork to complete the process.
But Michael Heller of Salinas, Calif., says he and his wife have submitted all of the required documents and made six months of $1,800 payments to JPMorgan Chase & Co., but have yet to receive an answer.
''Every time we send them documents, they send us a form letter that says your modification is risk, you screwed up, you didn't send us the necessary documents,'' said Heller whose landscaping business has taken a severe hit due to the recession. He figures the house he bought for $640,000 in 2006 is now worth $250,000.
''You never talk to the same person twice,'' he said. ''It makes you a little bit kooky. This has been extremely stressful.''
JPMorgan Chase had no immediate comment on their case.
Mike Brauneis, director of regulatory risk consulting at consulting firm Protiviti Inc., predicts that only 20 percent of borrowers who were verbally approved for modifications will ultimately sign up.
''Either people qualify verbally and never send their paperwork in, or they send it in and the numbers are different,'' he said.
Wells Fargo & Co. has enrolled about 3,500 homeowners in the Obama program so far. There are 14,000 more who have completed all their paperwork and are likely to finish the process soon. Another 9,000 have made three payments but haven't sent back any documents, while 11,000 have sent some paperwork.
''We're going to do all we can to try to get their attention,'' said Cara Heiden, co-president of Wells Fargo's mortgage division.
Bank of America said it is trying to reach 50,000 customers who have completed three payments but are missing some or all documents. It said its ''momentum in converting customers to permanent modifications'' will show results this month.
Some borrowers, who lied about their incomes when they originally took out their loans, still aren't able to show proof. During the housing boom, the lending industry didn't require borrowers to prove their income, and those loans are highly concentrated in the states hardest-hit by the housing bust.
More than half of loans made in California and Nevada from 2004 to 2007, for example, required little or no documentation, according to research firm First American Core Logic. Nationally, about 4.3 million of those loans were made during the boom years.
''You definitely have a group that shouldn't be in the loan in the first place'' said Terry Moore, managing director of consulting firm Accenture's North America banking practice.
A watchdog report this week said the government effort ''appears capable of preventing only a fraction of foreclosures'' and that only $2.3 million out of a potential $75 billion government commitment had been spent.
Steve Carpinelli, 39, of Alexandria, Va., thought he'd be a natural candidate for the Obama plan, after seeing his income drop 35 percent from about $65,000 two years ago. He's struggling, but has still made his monthly mortgage payments so far.
Though he was initially approved for a temporary modification, made four trial payments and sent back the necessary paperwork, Citigroup Inc. denied him last month.
''It is the most grueling processes I have ever been through financially,'' Carpinelli said.
A Citi spokesman declined to comment on his case but said, ''if the borrower does not qualify, we look for other potential loss mitigation solutions.''
NACA Continues Promising Mortgages Despite BBB Complaints
The Neighborhood Assistance Corporation of America, or NACA, promises to help struggling homeowners save their houses from foreclosure. But are those promises kept?
This weekend NACA will stage one of the organization's Save the Dream events in Charlotte. At a similar event in Columbia, S.C., earlier this year, 30,000 people showed up looking for assistance.
"We're the one shining light in the country when it comes to foreclosure prevention and restructuring mortgages to make them affordable," said NACA CEO Bruce Marks at a news conference to announce the Charlotte event.
But the president of the Better Business Bureau in Charlotte, Tom Bartholomy, said that is a bit overstated.
"There's nothing that they do that is more special than any other mortgage broker or lender will do for you," Bartholomy said.
In Charlotte, the BBB has logged 5 complaints against NACA. Nationally, there have been 63 complaints.
"At the end of it all, it comes down to that what they promised going in, they weren't getting at the end of it all," said Bartholomy.
Because NACA has helped thousands of satisfied homeowners across the country, the number of complaints is relatively small, so the BBB still gives NACA a B+ rating.
Katoma Cardwell was a NACA employee until he turned up at the news conference Tuesday afternoon. He admits he is in a pay dispute with the organization but also wanted to question CEO Marks about his claims.
"He is trying to distort what type of success NACA is currently able to provide for their members," Cardwell said.
Security guards barred Cardwell from going inside, telling him he had been fired.
A NACA executive who came outside told Cardwell, "Obviously you are attacking the organization so you can go through human resources to discuss anything further."
NewsChannel 36 questioned Marks about Cardwell's claims. Marks said, "There are some people that want to make a name for themselves by being on the media but we are focused on getting the job done."
Federal Judge Blocks Government's Move To Cut ACORN Funding
The U.S. government's move this fall to cut off funding to ACORN was unconstitutional, a federal judge ruled Friday, handing the embattled group a legal victory.
U.S. District Judge Nina Gershon issued the preliminary injunction against the government, saying it's in the public's interest for the organization to continue receiving federal funding.
ACORN claimed in its lawsuit that Congress' decision to cut off its funding was unconstitutional because it punitively targeted an individual organization.
Gershon said in her ruling that ACORN had raised a "fundamental issue of separation of powers. They have been singled out by Congress for punishment that directly and immediately affects their ability to continue to obtain federal funding, in the absence of any judicial, or even administrative, process adjudicating guilt."
Bill Quigley, the legal director of the Center for Constitutional Rights, which brought the lawsuit on behalf of ACORN and two affiliates, said the decision sends a sharp message to Congress that it can't single out an individual or organization without due process.
"It's a resounding victory for ACORN," he said. "I'd be surprised if the government decides to appeal."
ACORN, or the Association of Community Organizations for Reform Now, describes itself as an advocate for low-income and minority homebuyers and residents in communities served by its offices around the country. Critics say it has violated the tax-exempt status of some of its affiliates by engaging in partisan political activities.
The law that halted ACORN's federal funding took effect Oct. 1 and was extended Oct. 31. It was set to either expire or be extended again on Dec. 18.
ACORN's lawsuit was filed in federal court in Brooklyn and sought reinstatement of the funds. Quigley said millions of dollars in funds should begin to flow again to ACORN next week. The judge said the "public will not suffer harm by allowing the plaintiffs to continue work on contracts duly awarded by federal agencies."
ACORN has been dogged by allegations of voter-registration fraud and embezzlement.
Several of its offices were the subject of an embarrassing hidden-camera sting in which ACORN employees were shown advising a couple posing as a prostitute and her pimp to lie about her profession and launder her earnings. The videos sparked a political uproar, with Republicans trying to use the group's troubles to portray Democrats as corrupt.
The group's lawsuit named the U.S. government, the secretary of Housing and Urban Development, the director of the Office of Management and Budget and the secretary of the Treasury as defendants.
Justice Department spokeswoman Beverley Lumpkin said the agency was reviewing the decision and declined to comment further.
"Today's ruling is a victory for the constitutional rights for all Americans and for the citizens who work through ACORN to improve their communities and promote responsible lending and homeownership," ACORN CEO Bertha Lewis said in a statement.
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Sources: WCNC, NACA, ACORN, MSNBC, McClatchy Newspapers, Charlotte Observer, Wall Street Journal, Whitehouse.gov, Making Home Affordable.gov, Mass.gov, US Treasury Dept., CNN, NY Times, Big Government.com, USA Today, ABC News, CBS News, Fox Business News, Michelle Malkin, Newsbusters, Huffington Post, Charmeck.org, Youtube, Google Maps
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