This article first appeared in the St. Louis Beacon, Feb. 16, 2010 - It was one of the most visible signs of the ongoing mortgage crisis in St. Louis: thousands of people waiting for hours at the Chaifetz Arena last summer to meet with counselors from the Neighborhood Assistance Corporation of America, a national nonprofit housing advocacy group, that said it could provide same-day solutions to many financially troubled homeowners.
The organization, known as NACA, has said that 40,000 homeowners representing 25,000 households attended its four-day "Save the Dream Tour" in St. Louis, July 31-Aug. 3 -- and more than 300,000 people have participated nationwide. The 13-city event has included some of the areas hardest hit in the foreclosure crisis: Cleveland, Chicago, Los Angeles, Phoenix and Las Vegas. The events, which are held in large arenas, have been covered by local media in each city and also featured on CBS and ABC news programs. NACA will resume the "Save the Dream Tour" in West Palm Beach on Feb. 25.
Six months later, local homeowners who attended the St. Louis event report varying degrees of success: Veronica Macklin of St. Louis said she was able to restructure her loan with NACA's assistance, but Laurence Levett of Florissant said he has only recently been offered a forbearance. (That's when a lender agrees to let a borrower postpone payments or temporarily pay a lower payment to give the borrower time to catch up on late or missed payments.) Kelly Green of Lake St. Louis said that she never heard back from NACA and eventually worked out her own solution with her lender.
NACA says it cannot provide numbers regarding the number of cases that were resolved "same day" in St. Louis, nor can it say how many cases have since been resolved -- or are still pending.
In a phone interview on Jan. 22, Darren Duarte, NACA's director of communications, said such numbers wouldn't be accurate.
"What we have said in the past was that we expect 20 to 25 percent of same-day solutions to happen at these events. Ultimately, we expect 80 percent to be done eventually. But what happens is that sometimes the borrowers contact us and tell us that the lenders have contacted them with proposals. So those are not included. So, actually, that 80 percent number could even be higher," Duarte said.
Duarte said that NACA has been working tirelessly on behalf of homeowners and has improved its systems. He said the organization is trying to get the word out to people to check in at www.naca.com because thousands of proposed solutions are waiting. People can access their web files by using their NACA identification numbers and passwords.
"We've sent out robocalls, thousands of them, including in the St. Louis area,'' Duarte said. "And we've sent emails to people. We're calling them to let them know they have proposals in the system."
Duarte said that once people see their proposals they can either accept them or make a phone appointment with a NACA negotiator who can guide them to the next step.
"Some weeks back we didn't have that system. We think it's working much better," Duarte said.
Duarte said he would check on the St. Louis numbers but has not contacted the Beacon or responded to emails since the January interview.
'They started to act like I existed'
At a press conference before the St. Louis event, Bruce Marks, the CEO of NACA, stressed that the goal of the "Save the Dream Tour" 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.
Marks attributed NACA's ability to accomplish such restructures to the legally binding agreements the organization has with major servicers that, he said, cover 90 percent of U.S. mortgages.
NACA, based in Boston, has made national news with its "Predators Tour," a campaign that has included demonstrations on the front lawns of the CEOs of financial institutions. In news releases distributed before the St. Louis event, NACA noted, "On the tour, thousands of borrowers receive modifications at once, thanks to NACA's advocacy, state of the art underwriting capability and legal contracts ... with all major lenders."
On Aug. 3, the last day of the event in St. Louis, the Beacon observed the process at the arena for several hours and heard the testimonials of people who told the gathering over the public address system that their mortgages had either been restructured or that they had been given forbearances by their lenders.
The Beacon also talked to several homeowners at the event who agreed to take part in follow-up interviews tracking their progress. Other homeowners have contacted the Beacon after reading the coverage.
In October, Veronica Macklin called to report that she had successfully arranged a restructure with her lender after attending the NACA event. Macklin said she was pleased with the outcome, although she pointed out that -- unlike many of those who sought help -- she is not in financial trouble and was just trying to fix a bad mortgage.
Others, including Laurence Levett, have told the Beacon that dealing with NACA has been frustrating because of the organization's slow response -- or non-response -- to phone calls and emails.
Levett, who attended the St. Louis event with his wife, said NACA did not respond to his phone calls or emails until after the Beacon wrote about his case in October.
"They started to act like I existed at that point, and they told me I didn't have to go back to the media," Levett said.
Levett said he was recently offered a forbearance by his lender, arranged by NACA.
Levett, who works as a courier, said his financial situation has continued to worsen since August because his 12-year-old van has broken down -- and demand for his services took a downturn with the economy. He said that before attending the event, he had been back and forth with his servicer for months, trying to work out a loan modification on the small three-bedroom ranch-style house he and his wife bought five years ago.
Levett said he left Chaifetz Arena with high hopes because he was told by a NACA counselor that he would be contacted within two weeks.
"That sounded good, but I thought if it takes a month, that's OK. But it just didn't happen that way. There have been too many of what I call artificial delays," he said. "Call and tell me something."
Levett said that he understands that his lender is largely responsible for the delay, but he was frustrated because NACA didn't respond to his requests for information. He wondered if NACA had taken on more homeowners than it could handle, even as the organization continued to sign up more homeowners in other cities.
"And their partnerships with the servicers and investors may not be as strong as they make them out to be. Without the buy-in of the servicers and investors, nothing happens,'' Levett said.
NACA says it has improved its systems
NACA's foreclosure counseling services are HUD-approved and free. The organization receives federal funds through the National Foreclosure Mitigation Counseling Program, including a $3.5 million grant in October 2009. In 2008, the organization was awarded two grants totaling $31 million.
Duarte said he understands that some people were frustrated because they felt they had been waiting a long time and were not getting feedback.
"We sympathize with those folks," he said. "We're trying to do the best that we can. We have changed some of the system to make it better to help a lot of people. But we also have these lenders/servicers that we have to deal with. Some are doing better than others. Depending on the lender, it may take more time. Depending on the individual situation, it may take more time. We're trying to work through that."
Duarte said that in many cases, lenders are responsible for the delays, and he pointed to problems with the government's Home Affordable Modification Plan.
"These lenders have been slow to make trial modifications permanent," he said.
Duarte said that he understands why some homeowners might not understand NACA's decision to continue the "Save the Dream Tour" when they are still waiting for their solutions.
"That's a fair question," he said. "One of the things we have to do is overwhelm these servicers because that's where the bottleneck is. We basically are the middle man. We have these contracts with the lenders, but the more people we have the more we can get these lenders to do the right thing -- to finally come along and do these restructures. Yes, we get a lot of restructures the same day. And we get some within 30 days or so, but for others it does take longer. We have changed our systems now. We're learning as we go along."
Duarte said that it also makes sense to continue the large outreach events because the organization believes it can help at least 25 percent of the people who come to the events get a same-day solution.
'I don't know where I'd be'
Kelly Green of Lake Saint Louis said she knows there are no easy answers, but she is angry that she and her husband never heard back from NACA.
They went to the Chaifetz Arena on the last afternoon of the St. Louis event but were unable to meet with a counselor that day. They submitted their information online as instructed and then had a phone interview with a NACA counselor. She said their filed showed that a restructure request was submitted to their servicer on Aug. 17.
Green said that it was easier to get information from her bank than from NACA because the lender had given her personal contacts to call. The family cut expenses to the bone, and she eventually negotiated a temporary deal: For four months, they were allowed to make half-payments of their mortgage. But now they must make up the difference. For 11 months they must pay about one-and-a-half times their mortgage.
"My dream is to get back to where I need to be so I can sleep at night -- and I had to do that on my own with my own bank," she said. "I'm angry at NACA for coming and then not doing anything. Because if I had waited for them, if I hadn't made a mortgage payment in six months I don't know where I'd be right now."
