This article first appeared in the St. Louis Beacon, Sept. 22, 2009 - Sherre Waggoner of Maplewood no longer knows what to think about her experience eight weeks ago at a highly touted event for financially troubled homeowners called the "Save the Dream Tour," held by NACA, the Neighborhood Assistance Corporation of America.
But as the days have passed, she has become increasingly worried.
Waggoner, 46, is a divorced, single mother and college student who lost her job in April. She said she had fallen behind on her bills and was having trouble staying current on her mortgage, though she had just found new employment. After a friend saw the NACA event mentioned on a local television newscast, Waggoner decided to give it a try.
Waggoner was one of the 40,000 people who NACA organizers say attended the four-day event in St. Louis, July 31-Aug. 3, at the Chaifetz Arena. NACA, a national nonprofit advocacy group based in Boston, rented the arena and brought in several hundred housing counselors. The organization's promotional material promised "same-day solutions" for homeowners by restructuring mortgages that would be approved onsite by representatives of some of the nation's largest lenders.
Waggoner said she spent five hours at the arena on Aug. 1 with thousands of other worried homeowners, but she left feeling both relieved and confident that her home would now be safe.
She met face-to-face with a NACA housing counselor who reviewed the financial documents she brought. She then met with a representative from her lender, Wells Fargo, who agreed to a restructuring of her loan. She said the terms were all spelled out: Her mortgage interest rate would be reduced to 4.375 percent from 6.375 percent -- which would take about $220 off her $891 monthly payment.
In addition, Waggoner said, the Wells Fargo representative agreed to a six-month forbearance during which she would not have to make her monthly payments. Those payments would then be tacked onto the principal of the loan.
"I was initially pleased, very happy," Waggoner said.
Though she was not given a written, signed agreement, Waggoner said she thought she had something nearly as good: a direct contact with her lender. The Wells Fargo representative even wrote her name and phone number -- and the promised new interest rate -- on the cover of the workbook Waggoner had been given by NACA.
"That gave me a lot of confidence -- maybe more than I should have had," Waggoner says now. "And when the monthly mortgage bill didn't come the next month, that also gave me confidence."
Since then, Waggoner said, she has received a letter from Wells Fargo that specifies different terms than what she agreed to on Aug. 1. The letter refers to a six-month moratorium on payments that will end in January, when a balloon payment of all missed payments will be due.
Waggoner said she tried to phone the Wells Fargo representative at the number scrawled on her workbook, but she has never been put through to her. Instead, she has been told by Wells Fargo that she will be contacted in a few months -- at which time she can apply for a loan modification. She said the bank now says it has no record of the agreed-upon interest rate reduction.
Waggoner said she has also tried contacting NACA, but the identification number that she was given to track her file on the organization's website does not work. She said she has left voice mails and sent emails to NACA, but she has not received a response from the organization. While she is thankful that she doesn't have to make payments for six months, she said she is very worried about the possibility of having to make a large balloon payment in January.
And, she is concerned once more about the possibility of losing the house she purchased in 2002 with a $20,000 down-payment. Waggoner said she has considerable equity in the home -- she owes less than half of its current assessed value -- but she said lenders aren't willing to discuss refinancing with her because of her poor credit score.
"I'm very angry and very scared," Waggoner said Monday. "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 says lenders are 'overwhelmed'
Contacted by the Beacon on Monday, Bruce Marks, the CEO of NACA, said his organization is working to complete restructures by the end of September for those homeowners who attended the St. Louis event and whose cases are still pending.
Marks said that NACA has overwhelmed lenders and services with the volume of restructures it has submitted.
The 40,000 people who attended in St. Louis represented 25,000 households, he said. Nationwide, 180,000 people have attended similar NACA events in cities such as Chicago, Cleveland and Atlanta. The group will be in Los Angeles this weekend and also plans to visit Phoenix, Las Vegas and Oakland, Calif.
"I don't want people to get the impression -- because it's not true -- that they're not going to get their solutions. Because that's just not accurate,'' Marks said. "Yes, it might take a little longer. We've just gotten unbelievably successful. People are seeing that someone else got a solution -- and they're asking, 'Where's mine?' "
At a press conference before the St. Louis event that was attended by several city officials, Marks stressed that the goal was to get "same-day solutions for the vast majority of people." He said the solutions were not modifications but loan restructures based on what homeowners could afford to pay each month. The restructures could include interest rate reductions to as low as 2 percent and, in some cases, reductions in principal.
"What you will see here at the Chaifetz center for four days is actually a mobile servicing operation where we do the job for the servicers. They're here and it's not like people are waiting 15, 30, 45, 60, 90 days," Marks told the media that day.
Several St. Louis area homeowners attended the press conference and told of their successful mortgage restructures through NACA.
NACA, which is a HUD-certified agency, does not charge for counseling. Marks said the organization receives federal funds through the National Foreclosure Mitigation Counseling Program. In December, for example, NACA received a $16 million grant to provide free counseling for troubled homeowners.
Waiting for answers in St. Louis
On Aug. 3, the last day of the event in St. Louis, the Beacon observed the process at Chaifetz for several hours. On several occasions, happy homeowners, microphone in hand, addressed the arena with testimonials about their successes in having their mortgages restructured or being granted forbearances by their lenders.
The Beacon also contacted several homeowners at the event who agreed to take part in follow-up interviews. As of late last week, all reported that their cases were still pending.
Asked for numbers detailing how many St. Louis cases have been completed and how many are pending, Marks would say only that "it's a rolling number" and that the focus is on completing these pending cases before the tour resumes in Los Angeles.
Homeowners, such as Waggoner, have questioned whether NACA has become overwhelmed by the volume of homeowners it has attracted to its well-publicized events.
Six months after NACA's "Save the Dream Tour" visited Columbia, S.C., the town's news media are reporting that only about half of the 15,000 people who applied for restructures have received them.
Marks said that NACA has not bitten off more than it can chew -- and that by continuing the tour, he is able to keep pressure on lenders and servicers to complete the restructures already started in other cities.
"The issue is not us being overwhelmed. We're not. We have a handle on it. We have set up the systems. We set up the mobile servicing operation. We set up how they have to get the solutions so we can hold them accountable," Marks said. "The issue is that the servicers are overwhelmed. The reason we're continuing the tour -- obviously, there's a tremendous need for it. But the other reason is to hold their feet to the fire. The more you push them on it -- and plus they're right there with us -- the more we can get the people already in the process done."
Marks said that NACA has told servicers they need to have pending restructures completed by the end of this week before the Los Angeles event begins.
"We've been pushing them really hard because we're starting the tour again. We've been working with them aggressively to do that. And that's what they're doing," he said.
He said that "the vast majority" of restructures will be completed by the end of this week.
Asked if that included the St. Louis event, Marks replied, "Absolutely."
'I understand people's frustration'
Marks said that the NACA computer system has been upgraded, and he has hired 200 more staffers to answer the phones. He said he also has staffers dedicated to stopping foreclosure auctions in cases that are pending.
"What we're saying to people is they've got to hold on," Marks said. "If they've got an auction date, we stop it. We are -- believe me -- we don't take anything for granted. Just because a lender approved it, a servicer approved it, we want to verify the documents. That's why we put the stuff in the website so people can see the budget that was completed and what we submitted to the servicer. What we're telling people is you've got to hold on. A lot of people got their solutions, but for people who haven't, we're working through that."
Marks said that if NACA cannot get a solution for a homeowner, the organization will pursue other avenues.
"We will work with homeowners through advocacy," he said. "We're going to give them the information of how to work with us to advocate for their solution. If there's not a solution by the end of the month -- which will not be a large number -- but for the people who don't have it, then we kick in the advocacy."
Such avenues would include filing complaints with the servicer's regulator and the types of public protests that NACA is known for.
"They will get the personal phone numbers for the CEOs of these servicers. They will get the information where the executives of the servicers live. And we'll continue the predators tour where we go to their homes," Marks said.
Marks said he understands that some homeowners may be getting concerned, but he said his organization has a success rate of more than 80 percent.
"I understand people's frustration, but we've been unbelievably successful," he said. "No one else is doing what we're doing -- you call the servicer, you can't get a response. No one is pushing like NACA is pushing."
'What do I do?'
St. Louis area HUD-approved housing counselors say they were concerned in advance that the NACA event might be a bit of an oversell, said Chris Krehmeyer, president and CEO of Beyond Housing, one of several area nonprofits that provide free housing counseling.
"Our concern going in was their big, bold promises," Krehmeyer said. "My sense is that I'm sure there are people who were helped, but you can't promise the world to everybody and then not have a system in place that actually delivers what you're promising."
Krehmeyer said a handful of people contacted his agency after the NACA event.
"They came to us and said, 'We tried to follow up with these folks, and no one is getting back to us. Nobody's calling me back. What do I do?' " he said. "And we had a couple of people who had come to us -- and we had some things in place -- and they got convinced by the NACA people that they should go with them. And they undid our transactions."
Krehmeyer said homeowners should follow through with NACA, just as they would any counseling agency they are working with, to make sure the process is on track.
He would advise homeowners who are worried about losing their homes to contact a local housing counseling agency.
"Every day you wait is a day lost in the negotiation in the loss-mitigation workout scenario with that lender or servicer," he said. "There's just no time to wait."
Waggoner, in the meantime, is continuing to press NACA and Wells Fargo for answers.
"What scares me is they [Wells Fargo] say we are going to call you again and tell you that are going to have to apply for a loan modification. I don't know if that's true or not," she said. "And if Jan. 1 comes, and I don't have [the money to pay] this balloon, they can come take my house."
