Wednesday, Sep. 16, 2009

Save the dream event in Columbia: Thousands left waiting

After six months, promises of lower mortgage payments not fulfilled

Thousands of homeowners who attended the Save the Dream event in Columbia six months ago still haven’t gotten the lower mortgage payments that Neighborhood Assistance Corp. of America promised it could arrange for most attendees.

The Boston nonprofit, which organized the event in South Carolina at the request of House Majority Whip Jim Clyburn, drew more than 25,000 homeowners from across the country who waited hours in line to speak with a representative.

The high turnout reflected the depth of the foreclosure crisis and the impact the broader recession has had on homeowners.

Throughout the four-day event, the agency took information on about 15,000 mortgages. A total of 7,200 mortgages — less than half — have been modified so far, according to a NACA spokesman.

That figure falls dramatically short of what NACA organizers promised, though the agency’s leader said he expects more modifications to be completed soon.

The group told media outlets before the event that it can usually help more than 90 percent of people who seek their services, adding it could take an additional 30 to 90 days for some homeowners to get a finalized deal.

Meanwhile, NACA officials continue to hold similar Save the Dream events. In early August, an estimated 60,000 homeowners showed up to an event in Atlanta, forming a line two miles long that wrapped twice around the Georgia Dome.

“They seem to have a good idea going, but it looks like it’s been overwhelmed with failure,” said David Koon, an Irmo homeowner who attended the event.

Koon recently took a lower-paying job after his former employer shut down.

At the event, a representative from his mortgage company told Koon he had lowered his payments on the spot with a new 4 percent interest rate, then stood up to announce to the room that another home had been saved.

“I shook his hand and walked out,” he said. “I wish I had a micro cassette tape with me because they flat out lied to me.”

His lender later said it had no record of his loan modification, later denying him a lower rate.

LARGE VOLUME

Clyburn took a lead role in promoting the Save the Dream event, which he asked NACA to organize after hearing from frustrated homeowners. When asked if he was happy with NACA’s results, he said his office hadn’t evaluated the event.

“I didn’t promise them anything but an opportunity to have their mortgages modified,” said Clyburn, who helped arrange $75,000 in funding for the NACA’s expenses.

He added that he’s heard more compliments than criticism over the event and that he was happy with “the effort we put forward.”

“You create opportunities for people, and that’s what we did,” he said. “We created an opportunity. Someone else will have to evaluate (the results).”

Bruce Marks, chief executive officer for NACA, blamed lenders for dragging their heels.

“We’ve overwhelmed these lenders,” he said. “We’re getting thousands of solutions, and we’re going to get many more.”

He also defended his organization, which has collected at least $31 million in recent federal grants, by saying, “No one does the volume that we do. No one does it, not even close. ... When we say we’ve done over 7,200 modifications, that’s a huge success that no one could match.”

Lenders took sharp criticism from top U.S. lawmakers and federal officials earlier this year for their disorderly loan modification process. But the latest news reports show that banks have stepped up their efforts, in part because of a $75 billion federal effort to save homeowners from foreclosure.

On Wednesday, Treasury officials announced that lenders had sent out more than 571,000 offers to reduce borrowers’ monthly payments through what’s called the Making Home Affordable program. That’s about a fifth of the nearly 3 million homeowners who are two months delinquent and eligible for a loan modification under the plan.

Outside of that program, lenders said they’ve tried to boost efforts. Wells Fargo, for example, said last month that it hired 4,000 new employees to help with homeowner assistance, which has helped them modify more than 240,000 loans. Citigroup said it has added 1,400 to its loss mitigation staff.

STRUGGLING

Major lenders attend the Save the Dream events through a special arrangement with NACA. Few other nonprofit groups that offer foreclosure counseling have that advantage, Marks said.

That’s also how about 2,000 homeowners who showed up in Columbia were able to receive same-day loan modifications. Throughout the event, organizers announced over the loudspeaker when a new loan modification deal was finalized.

Some homeowners were pulled up on stage. The crowd occasionally cheered.

Attending the event wasn’t easy for some cash-strapped homeowners.

Nadine Lance of North Charleston left her job early to travel to Columbia and then waited until after midnight to speak with a NACA representative.

She drove home that night, not wanting to spend money on a hotel.

Next year, the interest rate on Lance’s mortgage will readjust, and she said she worries that payments on her three-bedroom home off Ashley Phosphate Road will go beyond what she can afford.

“I know if I don’t get something done about it, I won’t be able to keep my house,” said Lance, who has yet to hear back from NACA about her case.

Henry Millis of James Island was also told at the event that he qualified or an interest rate of 1 percent or 2 percent. A construction worker whose work has slowed, he left the event with instructions to look for a packet in the mail that would finalize the process.

The packet never came. He and his wife, Natasya, called the organization for weeks. But after never receiving a call back or an e-mail response, he said it’s beginning to set in that they might not get what they were promised.

“I’ve been paying the mortgage,” he said. “But it’s been hard to get by.”

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