They came from throughout the region hoping to get better terms on their mortgages in what was billed as a free, five-day, around-the-clock mortgage modification bonanza, with hundreds of counselors and scores of bank representatives in attendance.
Put on by the Boston-based nonprofit Neighborhood Assistance Corp. of America, the event was a stark reminder that a weak economy, high jobless rate and precipitous drop in home prices still threaten to put massive numbers of people out of their homes. The group expects about 30,000 people to attend the event that will end at 8 p.m. Monday.
“As soon as the market collapsed, all I wanted was to convert to a fixed-rate mortgage because my big concern was nobody would want to touch my mortgage once I was underwater — and that’s what happened,” said Brad Posin, 44, an Orange County attorney who stood near the end of the long line Thursday morning wearing a T-shirt, plaid shorts, running shoes and carrying years worth of correspondence with his bank.
“I am not looking for a handout from them, I am looking for what I thought the Obama administration’s plan was supposed to do,” Posin said. “I don’t want to walk away from my debts.”
Banks have been repossessing homes at a brisk clip this year, pushing properties through foreclosure that had been delayed last year by several moratoriums. And many borrowers who got temporary relief from the Obama administration’s $75-billion program to help troubled borrowers haven’t been able to get permanent changes to their mortgages, leading many experts to categorize the program a failure.
In recent weeks, the practices of banks taking back homes through foreclosure have also increasingly become a concern. Wall Street titan JPMorgan Chase said Wednesday it was delaying foreclosure proceedings on thousands of homes after it discovered that some employees signed affidavits about loan documents on the basis of file reviews done by other people instead of personally reviewing those files.
The JPMorgan Chase foreclosure delay follows a similar move by Ally Financial Inc. last week, when its GMAC Mortgage unit suspended evictions and foreclosures in 23 states while it conducted a review of its processes.
Neighborhood Assistance Chief Executive Bruce Marks said the goal of his organization and the event, was to fill a void left by policymakers in Washington.
“This perception, the happy talk in Washington that the foreclosure crisis is over, or that it’s not that bad is just that: happy talk,” he said. “On the ground, it is just as bad as ever and the worst thing is that the government is not doing anything to address it. They are actually making it more difficult.”
Marks said that Neighborhood Assistance has done more than 130,000 modifications over the last year and that only about 10% to 12% of the people who get a modified loan through the group default on those modified loans.
Inside the cavernous event center, Hakeem Shaheed, a tall and bulky NACA outreach coordinator from Newark, N.J., led a group of hundreds of homeowners through the first orientation of the day. Sporting a shaved head, baggy blue jeans and a white polo shirt, he cracked jokes as he walked the group through a sobering power-point presentation on the different options the lenders amassed nearby might be willing to offer.
He also cracked the occasional down-economy joke.
“Remember you used to whisper your social security number?” he said. “Now you blab it out in the middle of the mall because you know you can’t get ice in Alaska with that number.”
Moments later, Marks entered the orientation and faced the crowd. The balding, gray-bearded CEO was dressed all in black, with a megaphone strapped to his back, and addressed the crowd with fervor.
“Everything we have said about Chase has borne out to be true,” he said, his voice rising. “So we are going to get it done. We never take no for an answer. So your job is not to take no for an answer!”
Marks is one of the most visible and loudest critics of the banking industry, and his organization has been accused of using guerrilla tactics against some lenders on behalf of troubled borrowers. Last year his organization descended in hundreds on the Greenwich, Conn., home of one mortgage investor wearing T-shirts with pictures of sharks and the words “Stop Loan Sharks.” They scattered furniture across the man’s lawn in the simulation of an eviction after a foreclosure.
Neighborhood Assistance Corp. has received its own measure of criticism, including complaints of poor customer service, delays in providing assistance and too often offering short-term patches rather than long-term help for borrowers.
“It is up to the lender to do it,” Marks said. “We are the advocates, we understand that people are frustrated and that there are a lot of people that we’ve helped and a lot of people we need to still help, but we don’t get 5,000 people waiting before the doors open if it were not through positive word of mouth.”
The group has also been successful in brokering arrangements, or contracts, as Marks describes them, with the nation’s biggest mortgage lenders. Representatives from Bank of America, Wells Fargo, CitiBank and GMAC were all in attendance on Thursday, as well as Fannie Mae and Freddie Mac.
Beyond the orientation sessions of the event, in the biggest part of the convention center hall, hundreds of counselors lined up at long tables behind desktop computers with borrowers inputting information such as income and debt levels into a proprietary software system. Raw documents were scanned and then transmitted to lenders who were organized on the other side of the center.
Waiting in line for an appointment with GMAC was Jaqulyn Davenport of Inglewood. She said she had been trying to get a new loan since 2007 but hadn’t been able to because of its complicated nature and because the value of her home had fallen so far below the value of loan. Davenport, 40, said she had refinanced during the boom years into a so-called negative amortization loan, which has payments that adds to the principal balance of a loan.
“We have been running into issues because of the type of loan we have,” she said, adding that she arrived at the convention center at 4 a.m. that morning. “The person who put us in the loan — I don’t think that he really understood the type of loan he was putting us in.”
Copyright © 2010, Los Angeles Times
Picture: Paul and Rachel Hoffman of Yucaipa stand in line with their 3-month-old son, Lincoln, at the Los Angeles Convention Center on Thursday hoping to get a mortgage modification. (Irfan Khan / Los Angeles Times / September 29, 2010)
Related articles by Zemanta
- Thousands Show up in LA for Free Mortgage Help (abcnews.go.com)
- JPMorgan Chase to Delay Some Foreclosures to Review Documents (dailyfinance.com)