This article first appeared in the St. Louis Beacon, July 28, 2010 - One year after the NACA "Save the Dream Tour'' stopped in Cleveland, a local nonprofit advocacy group that offers foreclosure counseling in Ohio has posted a note on the front page of its website "reaching out to homeowners who've had difficulty with Neighborhood Assistance Corporation of America."
"Did NACA drop the ball on your case and leave you twisting in the wind?'' reads the message on the website of Empowering and Strengthening Ohio's People (ESOP). "Did they make promises they didn't fulfill? Did they lose your paperwork or were impossible to reach?"
Mark Seifert, executive director of ESOP, said that more than 400 homeowners have turned to his organization for foreclosure counseling after failed efforts with NACA's "Save the Dream" event that opened in Cleveland on July 17, 2009.
The multi-city tour, which has been nationally publicized, stopped in St. Louis two weeks later. About 40,000 people representing 25,000 homes attended, according to NACA, a Boston-based nonprofit, that promotes its free services and same-day mortgage workouts.
Despite repeated requests from the Beacon starting in September, the agency has declined to release numbers, so it remains unclear just how many St. Louis mortgage restructures were completed "same-day" at the NACA event -- or afterward. NACA officials have told the Beacon that these are "rolling numbers" and would be inaccurate.
In response to a request for those numbers and an interview last week, Darren Duarte, NACA's director of communications, said in an email that he would be unable to respond and would "have to get back to you next week.'' NACA is conducting an eight-day, 24-hour mortgage-rescue event in Washington through July 30.
Some St. Louis nonprofits that provide foreclosure counseling say that they, too, have been counseling clients who attended last year's "Save the Dream Tour'' and appear to have fallen through the cracks. Chris Krehmeyer, the president and CEO of Beyond Housing, estimates that his agency has helped more than 100 such homeowners in the past year who complain of difficulties in communication with NACA after the event.
"They say, 'I went to them and now no one calls me back. They said, do all these things, and I did them, and now I don't know what to do because they won't call me back. They told me, don't talk to my servicer, just talk to them. I don't know what to do, and I don't know where my case is,' '' Krehmeyer said.
Like other nonprofit agencies that provide federally-funded HUD-certified counseling, NACA does not charge homeowners for foreclosure counseling. NACA receives federal funds for that purpose through the National Foreclosure Mitigation Counseling Program -- $38 million since February 2008.
NACA's advance publicity for the "Save the Dream Tour'' heavily promotes its "same-day permanent solutions'' made possible because of legal binding contracts the agency has forged with lenders. Asked about the same-day solutions by the St. Louis media, Bruce Marks, the CEO of NACA, acknowledged that the process sometimes takes longer but that 80 percent of homeowners who participate will eventually get loan solutions.
'I can't get a hold of anybody'
At a press conference before the St. Louis event, Marks said that 35,000 people had attended over four days in Cleveland, with more than 5,000 people getting same-day mortgage restructures.
Those statistics raised eyebrows in Cleveland even before the "Save the Dream Tour" opened in St. Louis, with Cuyahoga County Treasurer Jim Rokakis questioning the number of success stories cited by NACA to a Cleveland television station. The report by WKYC quoted Marks as standing by his numbers. "They would rather have people lose their houses than bring somebody in to save them," Marks told the station.
Seifert told the Beacon last July that it wasn't a matter of "turf,'' though he referred to NACA as a "foreign" group. Seifert, too, questioned NACA's numbers and said he was already hearing from homeowners who were unable to get same-day workouts and follow-up information on their cases.
In an interview last week, Seifert said, "I'm not going to say that NACA didn't help anybody. I'm sure they did. But, by and large, the people we're talking to have not been helped, and there's no reason they couldn't have been helped.''
Seifert and local housing counselors say that homeowners complained about the difficulty in communicating with NACA about their modification applications after the event: unanswered phone calls and emails, waiting on hold for extended periods when attempting to talk to a counselor; repeatedly having to resubmit documents; phone appointments with counselors that are not kept.
"They all talk about how NACA left town and, 'Now, I can't get a hold of anybody,' '' Seifert said.
Laurence Levett a Florissant homeowner who attended the "Save the Dream Tour'' at Chaifetz said his loan modification process took nearly a year. He left the event with the understanding that he would have an answer within days but didn't hear from NACA until the Beacon wrote about his case two months later. He believes he was able to work out a modification with his lender because he continued to advocate on his own behalf; he said he hasn't heard from NACA for months.
"They stopped talking to me so I stopped asking them,'' Levett said.
For the past year, the Beacon has been detailing Levett's experiences, along with those of other homeowners who attended the "Save the Dream Tour" in St. Louis. The stories are a mixed bag, with some homeowners reporting that they were successful in working out mortgage solutions through NACA, while others say they gave up on the organization and took other action.
The tour goes on
The NACA website says the "Save the Dream Tour" has been an incredible success, with hundreds of thousands of participants and thousands receiving same-day solutions at cities across the nation, including Atlanta, Chicago, West Palm Beach, Phoenix, Las Vegas and Los Angeles.
The tour has inarguably called media attention to the continuing foreclosure crisis as desperate homeowners line up outside convention centers and arenas to talk to the agency's housing counselors. Media clips from the tour posted on the NACA website offer stark images of Americans caught up in the mortgage meltdown, which began in late 2006 with the failure of subprime loans.
Fueled by the recession, the foreclosure crisis continues to rage, with industry analysts such as RealtyTrac predicting that more than 1 million U.S. homes will be lost to foreclosure this year as lenders continue to clear their balance sheets of borrowers who have fallen behind on their loans.
The federal Making Home Affordable program, which was launched by the Obama administration in March 2009 to enable 3 million to 4 million Americans to modify their mortgages, has had limited success. As of June, just 400,000 permanent modifications have been completed through that program.
Marks told the media in St. Louis that NACA's "Save the Dream Tour" can do loan workouts quicker and better than anyone else. He said that NACA restructures loans based on what homeowners can afford to pay each month through interest rate reductions to as low as 2 percent and, in some cases, reductions in principal. He points to the fact that lenders and loan servicers travel with the event, eliminating the foot-dragging that can hold up loan modifications.
"We're showing the country, the politicians and the government how it's done," Marks told the Washington Post in a story published Saturday about this week's Washington event.
In St. Louis, as in other cities, local officials encouraged residents who needed help with their mortgages to attend the event. Attending the press conference last July were St. Louis Comptroller Darlene Green; Harry Kennedy, legislative director of the board of aldermen; Charles Bryson, director of public safety; and Missouri Rep. Steve Webb.
"The participants I spoke with have had mixed success. Some are still working out their details with the banks. I believed that getting word out to as many people as possible would maximize the number of people who could receive help,'' Green said Wednesday in a written statement to the Beacon. "The foreclosure crisis during these hard financial times led me to help get the word out about possible relief for homeowners in need. Some people got relief from bad mortgages and were able to keep their homes. The hope going in was that everyone who qualified and needed help would get it. Unfortunately, it appears that everyone could not receive relief by going through NACA."
Bryson said he has received no information from NACA about the results of its visit here and he has not heard from any homeowners. Kennedy and Webb were also contacted but have not provided comment to the Beacon.
Until "Save the Dream," NACA was most widely known on the East Coast, particularly in Boston, where Marks founded the group 20 years ago. The Boston Globe declared Marks "Bostonian of the Year'' in 2007, and he has been credited with helping working people with limited means become homeowners.
Marks has drawn both attention and criticism for using strong-armed tactics to convince big lenders like Citigroup and Bank of America to commit billions of dollars to NACA's low-interest loan program, which is separate from the group's foreclosure counseling work. NACA protesters have dumped furniture on the lawns of bank presidents to illustrate foreclosure and picketed the schools attended by children of bank CEOs.
In Cleveland, Seifert's group, ESOP, is also known for in-your-face advocacy, including a demonstration where protesters thew two-inch plastic sharks on the lawns of lenders the group considered predatory.
But Seifert takes offense at what has been described as the "revival-like'' or "circus" atmosphere at "Save the Dream Tour" events, where homeowners are encouraged to go on stage and offer testimony when they are granted a forbearance or loan modification.
"It looked like a circus,'' Seifert said. "You have the guy touting how great they are -- come on down ladies and gentleman. Somebody would get a workout, and they were parading them down in front of this microphone with the video camera running. You don't do that to people. They're already embarrassed for God's sake. If you want to do a press release afterward, when it's not in the heat of the moment, and talk to them about giving a quote, that's one thing.''
The dollars and cents of foreclosure counseling
Seifert and Krehmeyer say that NACA did not reach out to their agencies when the "Save the Dream Tour" came to their towns.
"Those of us who are committed to this work and to our community don't put on the giant dog-and-pony show,'' Krehmeyer said. "We're in the trenches day in and day out trying to help families stay in their homes. That's just the way that we go about our business. NACA came in, and I'm sure they helped some folks. But the reality is they raised a lot of hope and began the process for lots of folks and the follow-through and follow-up is terrible. This is about people's lives and people's homes. That's just not OK.''
Both Seifert and Krehmeyer say their agencies have had to pick up the ball financially to counsel some of the clients who came to them after first going to NACA. That's because the federal funds the counseling agencies receive from the federal National Foreclosure Mitigation Counseling Program (NFMC) can be claimed only once for the specified levels of service.
Agencies are currently compensated $150 per homeowner for Level One counseling, which includes intake, collection of pertinent financial documents, and developing a budget and action plan. Further counseling, which can be both time-consuming and complex as the agency acts as intermediary between homeowners and their lenders, is compensated at Level Two, $300 a homeowner.
An applicant who signs up with one agency is free to go to a different agency for assistance, but the second agency can only bill for levels of counsel not yet provided.
"There is no double billing,"' confirmed Douglas Robinson, a spokesman for NeighborWorks America , which oversees distribution of the federal counseling funds. NeighborWorks is a national non-profit originally created by Congress to help improve housing in economically distressed neighborhoods.
The aim of the foreclosure counseling program is to assist financially troubled homeowners in dealing with their lenders and servicers, a complex and time-consuming effort that can be daunting even to financially savvy consumers. There have been four funding rounds, totaling nearly a half-billion dollars, since early 2008. The funds are disbursed by NeighborWorks to its own network of nonprofits, including Beyond Housing, and through state housing finance agencies, such as the Ohio Housing Funding Agency, which funds ESOP. National organizations, such as NACA, are funded directly.
NACA, the Home Preservation Foundation and the National Foundation for Credit Counseling, have each been awarded $38 million in NFMC funds, the largest totals granted to individual agencies.
Robinson said that organizations that receive NFMC funds must report regularly the number of units of counseling performed, as required by the enacting legislation. The reports do not quantify outcomes -- whether homeowners have successfully modified their mortgages, for example -- and the reports are not made public.
In its reports to Congress, NeighborWorks offers overall totals but does not break down the numbers by counseling agency. According to its report to Congress this past May, 871,333 homeowners have received counseling between March 1, 2008 and Jan. 31, 2010.
NACA received a first NFMC grant of $15 million awarded in February 2008, with a second grant of $16 million awarded that December. Additional grants of $3.5 million were awarded in October 2009 and in April of this year.
The NFMC grants, coupled with the expense of the national foreclosure tour, have made a sizable difference in NACA's budget: According to NACA's 2008 IRS 990 -- the form filed by tax-exempt nonprofits -- the organization's income from contributions and grants grew to $14.7 million in 2008 from $1.7 million in 2007. The organization's total revenue tripled in 2008: to $28 million from $9.4 million in 2007. Total expenses also tripled: to $22 million in 2008 from $6.8 million in 2007.
NFMC grantees are paid only a portion of the funds up front, with the rest of the money "banked" and distributed as counseling services are performed, so most of the December 2008 grant -- $16 million -- would be reflected in the organization's 2009 revenue.
NACA has been quickly expanding its staff to provide foreclosure counseling. On its 2008 tax return, NACA reported 472 employees. In June 2009 - a month before the "Save the Dream Tour'' opened in Cleveland -- the Charlotte (N.C.) Business Journal reported that NACA had announced that it would hire 1,000 employees to work at its office in Charlotte to serve in call centers, mortgage processing and at the "Save the Dream Tour" events.
In 2008, Marks' salary doubled, according to the tax return: from $75,000, plus $6,152 in other compensation in 2007 to $146,849, plus $14,090 in other compensation.
Mixed reviews on foreclosure forums
Google "NACA" and "Save the Dream," and thousands of files will appear of past media coverage, along with reviews from homeowners who attended the events. There are rave reviews from happy homeowners who say the organization saved their homes. There are also scathing reviews from homeowners who say the organization didn't live up to its promises.
For example, two consecutive posts last December on www.trulia.com, a real estate search engine, illustrate a wide gap in opinion. Poster "Miraculous" of Miami calls NACA "a pretty awesome program," while poster "Rubby" of Illinois says, "NACA is a scam they won't help you."
Moe Bedard, who runs a free online foreclosure forum called www.LoanSafe.org , invites homeowners to share their experiences about fighting foreclosure. While some homeowners detail their frustrations in dealing with NACA on the forum, others sing the organization's praises. Bedard said he has seen postings from his members about NACA grow more critical as the number of "Save the Dream Tour" participants increased. The forum has about 33,000 members from across the country.
Bedard said he knows Marks, NACA's CEO, personally, and has had a friendly relationship with him. At one point Bedard had a business that audited some mortgages for NACA, he said.
Bedard said he has in the past volunteered to participate in NACA demonstrations and has attended "Save the Dream Tour" events because he wanted to get involved and help advocate with the organization.
"At the time they were helping people, and it was great. And then we started getting complaints in the LoanSafe forum. If I get a complaint, I let NACA know about it. Soon, I was spending a lot of money paying my staff to help NACA people having issues,'' Bedard said.
Bedard said he has never been compensated for advising homeowners to go to NACA for help. Until just a few weeks ago, NACA staffers were assigned to monitor and resolve complaints about the organization posted by homeowners on LoanSafe. But NACA started its own forum for homeowners, and no longer participates on LoanSafe -- a situation Bedard said he is working out with Marks.
"I didn't like that because I felt that they were trying to silence people. I told Bruce; just help these people. Give us an answer,'' Bedard said.
Bedard has, on occasion, posted criticisms of NACA in which he takes Marks and his organization to task for inflating numbers and being unresponsive to homeowners already in the pipeline, even as new members are being signed up at "Save the Dream Tour" events.
"I think that they are having management issues,'' Bedard said. "I believe he's really sincere about helping people. I just believe there was some misstatement to the media about their success rates.''
That said, Bedard said he believes that NACA is "better than anybody out there, still. Even though they're having problems, they're better than dealing with a lender on your own. But once you go to this event, after, you're pretty much better off on your own.''
Flyer from last year's NACA event in St. Louis:
