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Economy & Business

40,000 sought help at St. Louis foreclosure event, but how many homes were saved?

This article first appeared in the St. Louis Beacon, July 26, 2010 - On a miserably hot and steamy weekend last summer, struggling homeowners seeking mortgage salvation turned out by the thousands at the Chaifetz Arena for an event called "Save the Dream," a highly publicized multi-city foreclosure-prevention tour put on by the Neighborhood Assistance Corporation of America (NACA), a Boston-based nonprofit that touts "same-day permanent solutions."

More than 40,000 people, representing 25,000 households, attended the four-day event held July 31-Aug. 3, the agency later reported. In most cases, they waited for hours to talk to one of several hundred mortgage counselors bused in by NACA to conduct business at temporary work stations set up on the floor of the arena.

In advance publicity, the agency stressed its free services and same-day mortgage restructures facilitated by legal binding contracts forged with lenders -- a point that NACA CEO Bruce Marks drove home at a press conference earlier in the week. Several St. Louis area homeowners also participated in the press conference, sharing their stories of success in restructuring their home loans with NACA's help.

NACA, a HUD-certified agency, does not charge homeowners for foreclosure counseling because it receives federal funds for that purpose through the National Foreclosure Mitigation Counseling Program -- $38 million since February 2008.

Marks stressed that the goal was to get "same-day solutions for the vast majority of people" and that these 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, he said. In addition, Marks said, many homeowners would be able to meet face-to-face with representatives of their lenders and loan servicers who travel with the event.

"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.

Asked about the same-day solutions, Marks acknowledged that the process would take longer for some homeowners -- but he said that most who came eventually would be helped. 

It all sounded very good to Laurence and Evelyn Levett who, faced with declining income, had spent hours at the event attempting to reduce the monthly mortgage on the three-bedroom ranch home they had purchased in Florissant five years before. Approached by a Beacon reporter outside the arena, the Levetts were all smiles as they explained that although their restructure was awaiting lender approval, the NACA representative had told them they could expect a resolution within five days.

In fact, Laurence Levett told the Beacon this week, that resolution took nearly a year. He signed the paperwork last week -- and he says that he hasn't heard from NACA since March.

Levett said that his dealings with NACA included long periods of silence that left him wondering what the agency was doing on his behalf. He questioned whether the agency was able to handle the volume of homeowners -- hundreds of thousands, according to the NACA website -- it had signed up during its nationwide tour.

Levett said that he continued to communicate directly with his lender, Chase, as well as NACA, and believes that is the reason he was finally able to get a loan modification through the government's Making Home Affordable Program that will cut his monthly payments by $500.

If he is asked to put a sign in his yard advertising NACA's services -- something he says the agency can ask of its members -- Levett would do it.

"But it's going to be behind a bush. I said I'd put it out there, I didn't say anybody would see it,'' he said. "They'd have to prove to me that they did something. They haven't been talking, so I'm assuming I worked it out with Chase. They stopped talking to me so I stopped asking them. I'll work with the people who are going to talk to me, and Chase was talking to me, so I was talking to them."

How many homeowners did NACA help?

The NACA website says that thousands of people have gotten same-day solutions, with monthly mortgage payments reduced by $500 to $1,000 at "Save the Dream" events, which have been held in cities such as Cleveland, Chicago, Atlanta, Los Angeles, Phoenix and Las Vegas.

But one year later, it remains unclear just how many St. Louis mortgage restructures were completed at the NACA event -- or afterward -- because, despite repeated requests by the Beacon, the agency has not released its numbers.

In response to a request for numbers and an interview last week, Darren Duarte, NACA's director of communications, said in an email that he would be unable to respond because he is busy in Washington and would have to respond "next week." NACA held a "Save the Dream" event in the nation's capital this past weekend.

In September, Marks told the Beacon that the number of completed St. Louis restructures was a “rolling number” and that the vast majority would be completed before the tour resumed in Los Angeles on Sept. 24. He said that NACA had told the servicers that they needed to have pending restructures completed before the Los Angeles event began.

"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.

Marks said that NACA had overwhelmed lenders and servicers with the volume of restructures it had submitted.

"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," Marks said during the September interview. "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."

In January, Duarte again declined to provide numbers because he said they 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 in that interview.

'It's just been a nightmare'

For the past year, the Beacon has been telling the stories of homeowners, such as the Levetts, who attended the "Save the Dream" tour in St. Louis and have been working with NACA. Some have reported successful restructures, while others said they gave up on the organization, citing, in particular, difficulty in communicating with NACA in the weeks after the event.

The Beacon observed the process at Chaifetz for several hours on Aug. 3, the last day of the 2009 event, and witnessed several happy and excited homeowners, microphone in hand, addressing the gathering to share personal testimonials about their new mortgages with reduced interest rates or the news that their lenders had just agreed to forbearances.

Sherre Waggoner of Maplewood, who was featured in a Beacon story in September, still remembers how elated she felt when she left the NACA event. Although she walked out of the arena without a written, signed agreement detailing a promised six-month payment moratorium to be followed by a mortgage modification, Waggoner thought she had something nearly as good: The Wells Fargo representative she had met had written her name and phone number -- and the promised new interest rate -- on the cover of the workbook Waggoner had been given by NACA.

But in the following weeks, Waggoner grew increasingly worried after she received correspondence from Wells Fargo that was contrary to the terms she had been promised -- and she was unable to contact NACA using the instructions she had been given at the event.

Waggoner said that NACA representatives stepped in to help her after the Beacon story, but she never received the promised paperwork that would confirm the agreement with Wells Fargo and eventually found herself in foreclosure before the moratorium period expired.

"I was contacting [NACA] to say that I had never gotten any paperwork," Waggoner said. "They were always talking to the Wells Fargo person who was traveling with them. Two or three times they would say paperwork is coming and you've been extended through February. And it never came. It was always me contacting NACA."

Waggoner said she began to deal directly with Wells Fargo, at the bank's recommendation, and is still working with the lender. Because she has substantial equity in her home, she believes that she will eventually reach an agreement with the bank. Her employment situation is also improving. She has cobbled together several freelance jobs and was recently hired for a part-time teaching position.

Waggoner said that in addition to the stress of job hunting, she has had to deal with the never-ending ordeal of submitting and resubmitting financial documents to Wells Fargo and to NACA. And her credit score took a hit because of the premature foreclosure action.

"It's just been a nightmare trying to communicate with NACA and Wells Fargo -- always hearing something different and not knowing where I am," Waggoner said. "On four occasions I've gotten letters from attorneys saying your house is going to be sold in three weeks. There's no fear like that fear."

Waggoner has documented her dealings with NACA and Wells Fargo in a complaint she filed earlier this month with the Missouri attorney general's office. A spokesman for the attorney general's office confirmed that a case file has been opened and that letters requesting information have been sent to both NACA and Wells Fargo.

'They raise eyebrows'

As critical as Levett is of his experiences with NACA, he believes his association with the organization may have helped put some pressure on his lender to negotiate with him.

"Although NACA really, really irritated me, I think just having them in the mix somehow played a role, even if they didn't push the decision over the top," Levett said. "At the same time, it seems like after I talked to Chase about the lack of NACA's response, it seemed like they came back and said we'll work with you a little more."

Because he has considerable equity in his home, Levett said he was always confident that eventually he would be able to come to terms with his lender. He believes it is important for homeowners to advocate for themselves and to be prepared to deal with many frustrations.

"I would not be able to say truthfully to never deal with NACA. I don't like them, but I think they have their place. They raise eyebrows and get things going," he said, adding, "They may not finish it."

In September, Marks told the Beacon that NACA recognized the frustrations of homeowners and had upgraded its computer systems and added 200 employees. In the January interview, Duarte said that NACA continued to work tirelessly on behalf of homeowners and had further improved its systems of communication.

"We've sent out robocalls, thousands of them, including in the St. Louis area," Duarte said at the time. "And we've sent emails to people. We're calling them to let them know they have proposals in the system."

 

This article originally appeared in the St. Louis Beacon

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