Distressed Homeowners Seek Mortgage Salvation
New America Media, News Report, , Annette Fuentes, Video: Mike Siv Posted: Oct 20, 2009
DALY CITY, Calif. -- Tim Pine and his father drove all the way from Las Vegas to the Cow Palace looking for a miracle to help them keep their four-bedroom home. They worked together as contractors until work dried up in the recession, and their $2,800 monthly mortgage put an ever-tightening stranglehold on their family finances.
“We’ve been paying it, but it’s getting harder and harder,” Pine said.
Pine, 27, was among some 5,000 homeowners who on Friday descended on the behemoth venue known for its rodeos and expos. But instead of entertainment, they came hoping for salvation from the Neighborhood Assistance Corporation of America, a Massachusetts-based nonprofit organization certified by the U.S. Department of Housing and Urban Development (HUD).
“We drove here on Wednesday night and we’ve been sleeping in the car,” Pine said.
Neighborhood Assistance Corporation from New America Media on Vimeo.
Friday was the first of a five-day event called “Save the Dream” that the organization has been staging in cities around the country.
As the home foreclosure epidemic claims more victims, homeowners are turning to loan modification programs in growing numbers. Many are small-scale community operations. But the Neighborhood Assistance Corporation of America is doing it on a gargantuan scale. The group assembles hundreds of trained housing counselors who provide free, one-on-one assistance for homeowners who are struggling with paying their mortgages, or who are at risk of losing their homes. More importantly, the organization has wrangled agreements with the key lending institutions holding troubled mortgages, such as Bank of America, Wells Fargo and Chase. Its counselors can go directly to the lenders to request loan modifications that reduce mortgage payments from impossibly high to affordable.
A “Save the Dream” event in Los Angeles last month drew about 45,000 people, said C.J. Harris, an NACA organizer based in Oakland. Ten thousand people pre-registered for the Daly City event, and Harris expected a five-day turnout similar to that of Los Angeles’.
“It is a national crisis,” he said.
Maurice Thomas, 55, said his family’s crisis began when he decided to take a leap to become self-employed as a software programmer.
“I worked for Oracle, HP and small companies you’ve never heard of,” Thomas said. “Under normal conditions, I had a steady job. Then my software skills got soft.”
With a son at Arizona State University and the mortgage on his Danville, Calif., home getting harder to handle, Thomas and his wife fell behind six months on payments. They filed for bankruptcy to avoid losing their home. But, Thomas said, “We’re still in over our heads.”
He heard from relatives that “Save the Dream” was coming to the San Francisco Bay Area and arrived at 11:30 a.m. to see if he could find help that so far had been elusive. By 3:00 p.m., he had been through a two-hour orientation and met with a housing counselor, but the outcome was uncertain.
The Neighborhood Assistance Corporation of America boasts a success rate of up to 80 percent in helping distressed homeowners, but Harris acknowledges that not everyone leaves the event with a resolution.
“Some people will walk in and get a solution the same day, or they get extreme clarity on what the next step will be,” he said. “The larger thing I find is to establish some hope.”
Garvin Lohman and his wife, Janice, bought their first home in the Ingleside neighborhood of San Francisco five years ago with an adjustable rate mortgage that is going to balloon higher than their incomes can afford.
“We were led down the garden path,” said Garvin as they waited for their turn to meet with counselors.
Garvin tried unsuccessfully for three years to get their lender, Wachovia, to modify the loan. Last year, Janice was laid off from her job at Blue Shield.
“You get deeper and deeper into a hole,” she said.
They heard about the event on the evening news and came with the simple goal of making their mortgage payments affordable.
The floor of the Cow Palace was converted into a mass customer service dispensary, with row after row of desks staffed by counselors meeting with homeowners carrying bundles of documents. At a podium on one side, a worker would occasionally interrupt the quiet discussions with a loudspeaker announcement about another success story. A Josh from Davis stepped up to declare that he’d just fixed his mortgage problem by reducing his monthly payment from $1,600 to $1,300, thanking the Neighborhood Assistance Corporation of America and God. Cheers went up from the stands.
Hundreds of volunteers wearing marigold yellow T-shirts emblazoned with “Stop Loan Sharks” kept people moving and answered questions. Carlos Medina was one of them. By volunteering, the resident of Woodland, near Sacramento, Calif., was promised expedited help in modifying his monthly mortgage payments down from $3,100.
“I bought my house two years ago for $425,000 and now it’s worth $250,000,” Medina said. “I’m right on the border. And I’m helping my daughter out, too.”
Medina retired four years ago from his union job at PG&E, but like many others, the economic crash has made his retirement a financial hardship. He hoped to sign a loan modification agreement on Saturday morning to lower his interest rate from 7.25 percent to 2 percent.
Vincent Nguyen and Hanh Le quietly celebrated their successful loan modification, as they left Cow Palace with their toddler in tow. They’d begun the process with a counselor in Los Angeles, where they live, but had to drive up to San Francisco to confirm the deal with Bank of America, their lender.
“We owned our house for five years and for four years we never had a problem,” Le said. “We only bought what we could afford from the beginning.” They had a conventional mortgage with a fixed rate loan, but then the recession hit. A software engineer, Nguyen was laid off from his job. Le’s job as a dental hygienist was cut back to part time.
“We were a year behind in payments when we heard about NACA,” said Nguyen.
The couple tried to get help from the bank, which took over their mortgage from the failed Countrywide Bank, but they didn’t get anywhere. “Without NACA we didn’t know who to turn to,” said Le.
Their new loan agreement reduces the interest on their mortgage from 6.25 to 3 percent, and cuts their monthly payments by $500, they said. They are now true believers in the Neighborhood Assistance Corporation of America.
“Now, we want to do the volunteering,” said Nguyen. “We’d like to help other people like us.”
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