Mortgage 'Sav-A-Thon' Aims To Curb Foreclosure Crisis

Although some economists say the nation is slowly climbing out of recession, the national mortgage crisis is far from over. One million homes will likely fall into foreclosure this year, according to housing industry group Realty Trac. Host Michel Martin speaks with Bruce Marks, of the Neighborhood Assistance Corporation of America (NACA). The group is hosting Save-a-Thon mortgage counseling clinics across the country, which offer loan adjustment options. Marks explains NACA's approach to servicing struggling homeowners.

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MICHEL MARTIN, host:

I'm Michel Martin, and this is TELL ME MORE from NPR News.

Coming up, an ethics probe tarnishes the decades-long political career of New York Democratic Congressman Charlie Rangel. But could it actually end that career? We'll try to find out in just a few minutes.

But first, the president's financial overhaul is now law and many economists believe the nation is in the midst of a slow recovery. But the foreclosure crisis is far from over. The housing industry group Reality Check recently reported that one million homes will likely fall into foreclosure this year alone. That's on top of the millions that have already fallen into foreclosure.

And just last week, the special inspector general revealed that a federal program designed to reduce the number of foreclosures had fallen well short of expectations, helping fewer than 400,000 homeowners. It had been expected to reach more than three million.

That's why a group called the Neighborhood Assistance Corporation of America has stepped in. It's a not-for-profit homeowner advocacy group. It's been certified by the U.S. Department of Housing and Urban Development.

The group has traveled to more than a dozen American cities as part of its Save the Dream Tour. It holds mass events to assist struggling homeowners, people like Bruce Santiago of Fredericksburg, Virginia, who spoke with our producers on Friday. Santiago had been a successful builder and a handyman. He purchased land. He built a second home after refinancing his first and then came the recession.

Mr. BRUCE SANTIAGO (Home Builder): The economy went south. Everything changed. I had to sell my second house at Vienna, Virginia. And now I am struggling to survive down at Fredericksburg, Virginia. I used to have four crews of workers going out with four vans, and now it's only me working because of the volume of work has reduced greatly. Everybody's afraid of remodeling. Everybody is afraid of spending money in anything.

So the people that I used to hire, they're all laid off, who were working on houses. My mortgage was a five-year fixed and then it would convert into an Orange. And this is my last chance because next year, on July next year, the terms of my loan are going to change. I don't know what the future holds and I don't know what the interests are going to be next July. So I better do something about it while I can.

MARTIN: Again, that was Bruce Santiago of Fredericksburg, Virginia. He came to the first day of the Neighborhood Assistance Corporation of America's weeklong event in Washington, D.C. With us now is the CEO of that group, Bruce Marks. He's with us here in our Washington, D.C. studio. Welcome. Thank you for joining us.

Mr. BRUCE MARKS (CEO, Neighborhood Assistance Corporation of America): It is great to be here, Michel. Thank you for having me.

MARTIN: So, how many people have attended these events across the country and how many have you seen in Washington, D.C. so far?

Mr. MARKS: We've seen over 12,000 homeowners in Washington, D.C. already. And at these events, I mean they're really incredible. I mean this is our 20th Save the Dream event. And we started two years ago at the Capitol Hilton Hotel in Washington and the last day we had over 8,000 people just come in the last day. So we've been doing these. We get between 35,000 and 50,000 people over a five-day period. We go 24 hours a day.

And it's really incredible because it's word of mouth. Because the fact of the matter is, homeowners can get same-day solutions because we got all the major lenders there and the major investors. And we get the job done.

MARTIN: How do you get them to come? How do you get the lenders to come? I mean one of the complaints that a lot of homeowners have had is that they can't get these people on the phone.

Mr. MARKS: That's right. Everybody who has come has failed. They failed to get a hold of their lender to get a solution. So we have legally binding agreements with every major servicer and the major investors, where they have to restructure the mortgages. Because there's only two real solutions out there, one is if you have stable income, then you need to restructure, not to refinance. To take the existing mortgage and reduce the interest rate to as low as 2 percent, if necessary, the outstanding principle to make that payment affordable.

The second is if you're unemployed or under-employed, then you do a forbearance agreement for a minimum payment. And then after you get stable income, you do a restructure.

MARTIN: You've been conducting these since the fall of 2008, is there a difference between the people who are approaching you for help two years ago and what you're seeing now?

Mr. MARKS: What you see now is that it's really a cross section of everybody. Before, it was people who were targeted with the subprime predatory loans. But now you see it really impacts - so you don't hear anymore, well, we shouldn't do this because maybe we're setting a bad precedent because everybody knows somebody in their family and friends and colleagues who's been foreclosed on or is on the verge of being foreclosed on. So this is a cross section of every community in the country and that's what's changed.

MARTIN: Well, I do want to speak to you about that. You're saying that you're not hearing people say, in essence, there are those who say you're throwing good money after bad. Okay, I'm just going to play a short clip from another homeowner whom we met at the convention center on Friday. Here it is.

Ms. ANGELA BLACK(ph): My name is Angela Black and I'm from Long Island, New York. Well, I was having a very hard time paying my mortgage. And my interest rate from 8.75 with my new modification that I got around December came down to 4.75. And I fell back because my husband lost his job and I was out of work for a while because I was in school full time. So I fell back with my mortgage. So now I'm being threatened foreclosure.

And one of my friends, her mom got help from NACA, and she referred me to NACA. You know, I'd like to see maybe my interest rate goes down and a lower mortgage where when combined with my taxes, it's affordable.

MARTIN: I want to point out a couple things, this lady is from Long Island, New York and this event is in Washington, D.C. so she actually, you know, came all the way down here to meet with people to get some help here. But this also is an example that other people might use to say, this lady shouldn't have a loan at this point. I mean she's already had one modification. Maybe she shouldn't be in a house at this point. Maybe she shouldn't be in a maybe she just shouldn't be a homeowner at this point in her life. What would you say to that?

Mr. MARKS: Anybody who's willing to travel all those hours to come to an event and wait in line remember, when we opened up, we had over 2,000 people waiting just to get in on Friday morning at nine o'clock. And the fact of the matter is, that's really a self-selecting process. If someone's that determined to keep their home, that's who the homeowners are.

And remember, the people that walk away from the homes the most are the investors. You don't have hardworking Americans walking away from homes because they're underwater or that it's the investors. And it's, really, frankly, upper income people who are more willing to do that than low, moderate income people. So someone like that, absolutely, you have to do everything that you can to keep her in her home because that's exactly who you want as homeowners. Someone who's so invested that they're going to spend days and hours in the hot sun. I mean it was hot. It's hot here in Washington to wait outside to save her home, absolutely.

She is the true homeowner that we want, not just owning her home, but investing, owning a piece of her community because that determination is what's going to turn around communities.

MARTIN: If you're just joining us, you're listening to TELL ME MORE from NPR News. We're talking about help for struggling homeowners with Bruce Marks. He's the CEO of Neighborhood Assistance Corporation of America. They've been holding events all around the country to help struggling homeowners. They're holding a weeklong event here in Washington, D.C.

Now you've heard the number of homeowners, the percentage of homeowners who've actually been helped by over the financial assistance packages. There have been a number of programs announced by the administration and none of them seem to have actually made a real dent. And I wonder, what is your perspective on why that is from what you're seeing?

Mr. MARKS: Well, because what you see is, I mean we have these legally binding agreements and we're an advocacy organization, so we do three things very well. One, we get their attention of these lenders who do not cooperate. And sometimes that means having 400 or 500 people go to the CEO's homes in their gated communities, because it's personal when someone loses their home. And we want to bring that personal devastation to the CEO's home.

Secondly, we have programs that work better than anything else out there. Thirdly, we do the job better. We do the job for the lenders. We do the implementation for them. The reason why it hasn't worked in terms of the administration is because President Obama is basically pleading, begging and bribing these lenders to do it.

And I used to be a regular. I used to work at the Federal Reserve Bank of New York in the domestic applications area. So I dealt with these lenders and the power of the government is extraordinary if they want to use it. Now, they used it when they required all these lenders to take the TARP money. They said, even if you don't want it, you have to take it because there's a bigger issue out there.

President Obama could use that same authority, whether it's with the Office of the Comptroller of the Currency, the Federal Reserve all the regulars FDIC, to force these lenders to do what they should be doing. He's got to stop begging. Now, if NACA can do that, well, why can't President Obama and the administration do it? That's the problem. And that's why they're afraid to push these lenders. They got to get, you know, push 'em.

MARTIN: You're saying that they have to compel lenders to offer modifications to homeowners.

Mr. MARKS: It's so devastating out there is a safety and soundness issue. And they have to compel it.

MARTIN: What do you mean it's safety and soundness issue?

Mr. MARKS: Well, as a regulator, if you make it a determination, which they did under TARP, that you have to take the money, that to save Wall Street, that if you make that same determination that we have a crisis out there in this country around the foreclosures, then you can force these lenders to do the right thing.

That doesn't mean everybody gets through. But it just means that they have to respond within a 30-day period. They have to do that. So if someone violates what they call the HAMP program, right, there's no sanctions. So Chase Bank is the worst. And you have got Jamie Dimon, who used to be the star of Washington, maybe is, but he has access. And the fact of the matter is, what happens if Jamie Dimon, CEO of Chase, doesn't do it? No penalties. Nothing. Well, how can the government be so helpless that they can't do anything?

MARTIN: Well, I think the argument, the other side of the argument would be, and obviously they would have their own, you know, perspective on this, but that you can't compel people to invest. And as you just pointed out, the investors are fleeing these instruments and you can't force people to invest in them.

Mr. MARKS: But you can compel the government to restructure these mortgages. And let's take one example. The one that the government controls, FHA and VA, that's the worst. So on the other side, these lenders are saying why should we do it if the government won't do it?

MARTIN: What do you foresee for 2010? Do you think that that one million dollar additional foreclosures is accurate? We only have a couple seconds left, I'm afraid. Do you think that's accurate?

Mr. MARKS: It is low. It's going to be worse.

MARTIN: Bruce Marks is the CEO of Neighborhood Assistance Corporation of America. He joined us here at our Washington, D.C. studios. Bruce Marks, thank you so much for joining us. Where are you going next?

Mr. MARKS: We'll be around the country. California, down to Florida, around the country. We're going to continue the Save the Dream events until we make the NACA standard the national standard.

MARTIN: All right, thank you.

Mr. MARKS: Thank you very much.

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