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Controversial traveling foreclosure event returns to small crowd in St. Louis

This article first appeared in the St. Louis Beacon, Aug. 18, 2012 - The head of the controversial Neighborhood Assistance Corporation of America (NACA), which is holding a five-day traveling foreclosure event at Chaifetz Arena, says his nonprofit has worked relentlessly on behalf of American homeowners and has continued to improve its process to negotiate mortgage modifications with lenders.

In an interview Friday afternoon at the arena, Bruce Marks, CEO of the Boston-based advocacy group, also responded to criticisms by local nonprofit housing counselors in St. Louis and in Cleveland who reported that hundreds of participants at NACA’s “Save the Dream” events in 2009 turned to their agencies for assistance because of difficulties in communicating with his organization in the months that followed.

A series of stories by the St. Louis Beacon in the wake of that event detailed the experiences of some frustrated homeowners who after months of dealing with NACA hadn’t worked out their mortgage problems. The homeowners said they had waited for hours at Chaifetz to speak with NACA counselors but were told that they couldn’t get promised same-day solutions because their lenders weren’t onsite to approve their loan modifications. They complained that their subsequent phone calls to NACA went unanswered for weeks on end and that they were repeatedly asked to resubmit paperwork.

Marks said the St. Louis event three years ago was among the first of the 86 foreclosure events that NACA has held -- and that the process improves with each event.

“Clearly, we put ourselves out there,” he said. “We are by far the biggest entity and the most effective in getting same-day solutions, and we follow up with everybody. Sometimes you have to work through the process to do that, but we feel very proud of what we’ve done. And I think a reflection of that is that we are relentless, and we come back.”

Marks said that more lenders now participate in its events, which means that more people can get same-day approval on loan modifications. NACA has always heavily promoted “same-day solutions” in its pre-event publicity campaigns.

“Back then, we didn’t have some of the lenders on board. We didn’t have Chase. We didn’t have Fannie Mae and Freddie Mac. We didn’t have a number of the others. Now we have legally binding agreements with everybody -- all the major players out there,’’ Marks said. “We just continued at them, both on the counseling side and on the advocacy side. Things don’t get done overnight.”

Marks said that, ultimately, lenders are to blame for the foreclosure crisis and that lenders were to blame for failing to carry through on promises to modify loans.

“I’m not going to sit here and say to you that everything we did was perfect and that we didn’t get better and better over time, but I can tell you that no one has worked harder as an organization, no one has put themselves out there as an organization and no one has been as effective as an organization as NACA has been,” he said. “But you grow to do that.’’

Marks said that NACA has continued to pursue its advocacy campaign -- which has included public protests sometimes resulting in his arrest -- to convince lenders to get on board. At the same time, the organization was working to develop an online system that allows homeowners, banks and NACA to share information and communicate with one another.

“We work with hundreds of thousands of people,” he said. “The fact of the matter was someone had to step into the breach -- and we did. We kept on pushing forward, hired hundreds and hundreds of staff people and we set up a process that never existed before. Everybody who comes to one of these events has tried and failed to work with their lender.’’

Local housing counselors express concern

NACA began staging “Save the Dream” foreclosure events in cities across the U.S. at the height of the foreclosure crisis. The events were attended by thousands and highly publicized by media outlets. Promotional materials promise that all services are free and that same-day solutions can cut interest rates to as low as 2 percent and sometimes reduce principal. Such mortgage modifications can save financially struggling homeowners hundreds of dollars on their monthly mortgage payments.

“We were the only ones out there doing it,” Marks said. “The idea was to be in it for a year and that the lenders would get their act together. And the government would get its act together and we wouldn’t have to do this.”

Friday’s opening day attendance at the “American Dream Tour” was sparse -- in extreme contrast with the event in the summer of 2009 called “Save the Dream” that NACA said attracted 40,000 people. Crowds three years ago waited for hours to speak to NACA counselors, braving withering summer heat as they stood in lines outside the arena just to get in. There were no lines outside Chaifetz on Friday; inside, several dozen people sat inside the arena to begin the modification process.

On its website, NACA reports thousands of successes at its foreclosure events but would not provide specific numbers from the 2009 event in St. Louis, despite repeated requests by the Beacon.

Marks said Friday that his organization was unable to report how many people eventually received mortgage modifications in the past because it relied on the lenders for that information. He said that NACA would be able to provide statistics after this week's event because of its new process.

At a press conference before the 2009 event, Marks acknowledged that the foreclosure process could take longer than “same day,” but he emphasized that 80 percent of participants would eventually get loan solutions. He said that today, about 70 and 80 percent of homeowners who come to events get same-day solutions if their mortgages are with major banks.

In response to criticisms by local housing counselors that NACA does not work with them at its multicity events, Marks said that NACA’s advance team does reach out to local nonprofit housing counselors because saving people’s homes is not a question of turf.

Eric Madkins, a housing counseling manager at the Urban League of Metropolitan St. Louis, said this week that he had received no communications from NACA. Madkins also heads the St. Louis task force on foreclosure intervention that includes most of the nonprofits that do foreclosure counseling.

Chris Krehmeyer, president and CEO of Beyond Housing, said Saturday that NACA had not contacted his nonprofit, which has been on the forefront of foreclosure counseling in the region. In July, Krehmeyer told the Beacon that homeowners should be cautious about NACA’s return to St. Louis and stressed that free foreclosure counseling is available through local nonprofits. Those include Beyond Housing, the Urban League, Better Family Life and Catholic Charities.

Krehmeyer said that he would be willing to talk with Marks.

“The agencies who do the counseling here work together. Our goal is to keep families in their homes,’’ Krehmeyer said. “And we’re willing to work with anybody who has that same goal. If that’s truly their goal and they want to work with us to that end we’d be willing to work with them, but today we’re not convinced that is their sole goal. If people go [to the NACA event] and get help I think that’s fantastic, but if history is any barometer, the large percentage of people are going to be left hanging in some form or fashion and we at the local level will have to pick up the pieces when they fold up their tent and move to the next city.”

Krehmeyer and other local housing counselors say that nonprofits that took on NACA’s dissatisfied clients in the past could not collect federal funds for levels of foreclosure counseling service that had already been billed by NACA -- a situation that further strained their limited budgets.

“I’m not suggesting that NACA doesn’t help some folks, but there are a lot more that they leave hanging. And then we have to pick up the pieces and we can’t get paid for our work because NACA has already done the intake,” Krehmeyer said.

He warned that same-day solutions are rarely possible because the process is not that simple. He described the event as a “distraction.”

“It gets people’s hopes up and gives our agencies who have limited capacity more work to do and less revenue to do it.’’

NACA spreads the word

Marks said the foreclosure events are exhausting and expensive to run and that NACA, which had previously developed a home purchase program, only stepped into foreclosure counseling to fill a void.

He said his organization does not rely on federal housing counseling funds; most of its funding comes from lenders who pay NACA a fee for negotiating a successful loan modification.

“So in a sense -- from a business point of view -- we’re incentivized to get someone a great solution. We’re incentivized because of our commitment, as well, because otherwise I wouldn’t be spending all of this personal time doing this,” he said.

Marks predicted that attendance would grow at the event, which runs through Tuesday, as word spreads about it. NACA has also been making robocalls to area residents, in which Marks personally invites homeowners to Chaifetz to get a one-day foreclosure solution or to begin the process to purchase a home. He said the events still focus heavily on foreclosures, but the name was changed to the “American Dream Tour” to reflect the inclusion of its home-buyer program.

Marks said the foreclosure crisis is far from over, but he believes homeowners are also burned out.

“It’s not that they have an affordable mortgage payment. They’re cynical. But that’s why we continue to do this. People have everything to gain and nothing to lose,” he said.

Marks said that homeowners who get same-day solutions now leave the events with an agreement in writing that is signed by lenders. That wasn’t always the case three years ago.

Anthony Robinson, 45, a homeowner who lives in St. Louis County, said he attended the NACA event Friday, and he was able to successfully modify his mortgage with his lender -- something he had been attempting to do on his own for several years.

Robinson said he had remained current on his mortgage, despite an 18-month bout of unemployment. He is working again, but at a lower income. The principal on his mortgage was not reduced, but the bank agreed to cut his interest rate by about 4 percent, representing a $300 reduction in his monthly payment.

Robinson said he had all the necessary documentation with him on Friday. The process took about four hours, and he said he was charged no fees by the bank or by NACA.

“I wasn’t making any leeway with the bank, and I didn’t think they were going to approve this. But it’s affordable for me now. It gave me peace of mind,’’ he said, adding that he won’t truly believe it until he receives his monthly mortgage statement from the bank.

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