FDL: A Visit to a NACA Loan Modification Marathon

David Dayen from Firedoglake reports:

I walked through the Los Angeles Convention Center on Saturday, past the marquee blaring the finals of the World Cyber Games, known as the Olympics of video games. I came across thousands of people queued up, some sitting in portable chairs, some carrying food from the commissary, some drifting to sleep. None of them were in line to watch gamers play Counterstrike. They were camped out to get a chance to talk to a customer service representative at their bank, hoping to get a modification on their mortgage. And for most of them, this was their last hope.




“We don’t go out to eat, we don’t drink, we can’t even tithe to the church,” said Mary Pielman, who came about 70 miles from Redlands to the massive loan modification event to get help with their mortgage. “We’re not underwater on our home, we’re underwater on everything else. My principles are we pay our bills first. We’re all in the same pickle, and we want to get out.”


The 100-hour event, which started on Thursday and closes today, was organized by NACA, the Neighborhood Assistance Corporation of America. Officials expected to get 40,000 struggling borrowers a chance to come to a solution with their lenders throughout the five days.


NACA is a non-profit which gets borrowers in front of lenders for same-day solutions on loan modifications. On average, borrowers can save between $500-$1,000 a month on their mortgages, with either dramatically reduced interest rates or even principal reductions. The concept behind NACA is simple: they do the legwork with their “members” (the borrowers for whom they advocate) to verify income statements, and come up with a workable budget that includes an affordable mortgage payment on a first mortgage (because second mortgages cannot jump over first mortgages to foreclose on the home, NACA focuses on the first, and believes such a modification makes it easier to negotiate a solution with the second mortgage holder). After that, they set up legally binding agreements with the lenders to work out agreements based on the affordability parameters they set. For many borrowers, they can get these solutions the same day. The Los Angeles event was the 22nd across the country, which has helped over 100,000 borrowers achieve results. They also have a Web application through NACA.com for their members to continue the modification process. All of these services, including counseling, complaint claims and the rest, are free.


“We’re up front with our members. We can submit their claim if we can document and verify,” said Rick Guerrero, an official with NACA. “Our counselors are trained to present the banks with a realistic affordable payment.” Guerrero said that they present this to the banks as a win-win proposition. It costs the banks more in upkeep and ancillary costs to put the home into foreclosure than it does to reduce the payment for the borrower and keep them in the home. Plus, it saves the banks the time and effort to figure out what the borrower can actually pay. “Foreclosure is bad for banks,” said Guerrero.


And NACA makes the borrower clear about every single option at their disposal to level the playing field with their lender. “If I’m about to get kicked out, I’m going to take the house apart… the banks know that,” said one orientation leader, in a room of hundreds of borrowers. Orientation sessions were in English, with a special room for hundreds more in Spanish. In another one, a leader gave out flyers with the personal office phone number and email address of Jamie Dimon, the CEO of JPMorgan Chase. “We had his cell phone number too, but last week he changed it,” the leader said. He urged Chase borrowers to file complaints with Chase at the Office of the Comptroller of the Currency, their regulator, and to call Dimon at all hours of the day. “Some of us can’t sleep because of our mortgages, why should they?”


All of the major lenders were represented at the event except for JPMorgan Chase, actually. They have a legally binding agreement with NACA, but have chose not to participate in the events, instead setting up parallel “Homeownership Center” off the site. NACA provided transportation for Chase borrowers to go down and meet with Chase, but borrowers were told that the officials there could not make decisions and were not offering long-term solutions. “They tried to get me to sign a release of liability,” said Ayman Moussa of Mission Viejo, who had been trying to get a private modification with Chase for over a year. “People are going back to fight.” Rick Guerrero said the Chase officials were being disingenuous. “They say they have no underwriters there and they can’t make decisions, but they could,” he insisted. “Chase is the servicer of these loans. They are delegated to make decisions on behalf of the owner.” With the Dimon phone number flyers and through other means, NACA members were pressuring Chase to honor their agreement.


Walking through the NACA event reminded me of those massive Remote Area Medical events where the uninsured would go for a marathon of treatments. In rows upon rows of chairs sat thousands of borrowers and their families, some of whom had been there for three days. Servicers use a bullhorn to call out the names of the next borrower who can meet with a consultant. NACA volunteers in yellow T-shirts with slogans like “Stop the Sharks” (i.e. the banks) tried to get borrowers set up in the right place. NACA tries to give borrowers a specific time range for consultations (they’ll even text message people with a time, but even that said “the wait time may be considerable”), but with this massive an event there’s bound to be confusion. Against the far wall, the names of servicers were written on papers stuck to tables – AHMI, Ocwen, Suntrust, Citi, GMAC, Bank of America.


Read on.