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Group Helping To Save Dreams Of Homeowners

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The Tampa Tribune

Published: July 27, 2008

WASHINGTON - The Neighborhood Assistance Corporation of America did something that should have been done a long time ago.

On July 19, the nonprofit housing advocacy organization hosted a free five-day "Save the Dream of Homeownership" event here in Washington where people could get immediate help restructuring their troubled mortgage loans.

More than 300 NACA counselors, certified by the Department of Housing and Urban Development, were on-site at the Capital Hilton Hotel and provided same-day affordable mortgage restructurings.

Taking An Aggressive Strategy NACA orchestrated agreements with major mortgage loan servicers, including Citigroup and Countrywide (now owned by Bank of America), to make the fast-track restructuring program work.

"Our frustration has been that some of these servicers have not done what we need them to do," said Bruce Marks, NACA's chief executive.

I love this aggressive strategy. For months now, many financial institutions have claimed they are working hard to help homeowners stay in their homes. And yet the number of foreclosure filings keeps rising. Some reports have indicated that not enough people are being helped by the various mortgage workout plans endorsed by the Bush administration.

At this Save the Dream event, NACA took homeowners through a series of four steps that included a forensic-type examination of their budgets.

"We are going back to the basics," Marks said.

Homeowners were asked to bring in pay stubs, bank statements and other financial information. Their credit reports were pulled for free to check for other liabilities.

Once all their information was verified, NACA presented restructuring packages to loan servicers. And in some cases it resulted in a reduced loan amount. All the rates under their program are fixed for 30 years, Marks said.

Process May Prove Difficult

Here are two examples of mortgage restructures that were approved by servicers working with NACA's Home Save program:

•Joseph and Kathleen Renaud of Worcester, Mass., were able to renegotiate their 11.875 percent loan with Countrywide to a fixed 5.25 percent. Monthly savings: $830.

•Melody Weathersby of Jackson, Miss., was able to restructure her 14.625 percent loan with GMAC Homecomings to a 6.75 percent fixed rate. Additionally, she was able to cut her mortgage debt by $20,000. She's saving $300 a month.

In the cases where the loan amount is actually reduced, servicers may agree to write off the amount or attach it to the balance owed. But the money owed would only be repayable if the homeowner sells the home for a profit or does a cash-out refinance.

This process may be hard for some people. As a condition of getting a restructured loan package, participants had to agree to operate under a bare bones budget. That means eliminating unnecessary expenses. Some people were asked to cut back on their cable TV or cell phones if such monthly expenses were deemed too high. Others were asked to downsize to a less expensive car or sell a second family vehicle.

I like what NACA is doing. If there is going to be a meaningful fix to the current housing crisis, there will need to be pressure like this put on financial institutions - and everyone is going to have to make a sacrifice.

Michelle Singletary can be reached at The Washington Post, 1150 15th St. N.W., Washington DC 20071. To learn more about the programs NACA offers, go to www.naca.com.

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