Saturday, February 5, 2011

Phoenix-area homeowners get loan help from non-profit

When Neighborhood Assistance Corporation of America organized its first four-day loan-modification event for Arizona homeowners in October 2009, group founder Bruce Marks believed it also would be the last one.

But 16 months later, the majority of stressed borrowers are no closer to achieving their dream of continued homeownership. The nation's major banks have not instituted any across-the-board measures to keep struggling mortgage borrowers in their homes, and the new U.S. president who promised them hope and change has done nothing to force the issue.

Meanwhile, Marks' Boston-based non-profit group, commonly known as NACA, has visited and revisited 26 major metropolitan areas, including Phoenix, where the group is hosting a second event at the Phoenix Convention Center through Sunday.

Attendance was relatively sparse on opening day Thursday. That's typical, Marks said. It will build each day as information spreads by word of mouth.

On the final day of NACA's previous stop, an 11-day event in Los Angeles, 7,000 people showed up, he said.

"We had no idea this would still be happening in 2011," Marks said.

NACA has put tens of thousands of borrowers back on the path to stable homeownership by helping them negotiate low fixed interest rates on their mortgages via a cadre of loan servicers who set up shop at the group's events.

Lenders have not always honored those negotiated agreements, Marks said. Sometimes, they still don't. But he said the success rate has climbed steadily, as the major banks have become more heavily vested in the NACA process.

Still, Marks' stated goal in 2009 of putting himself out of business continues to elude him.

He had hoped mortgage lenders would adopt the process NACA uses and make it their own. They have not.

"The good news is that these events are more successful," Marks said. "The bad news is that we still have to do them."

Founded by Marks in 1988, NACA's original purpose was to provide affordable mortgage loans.

NACA does not use credit checks to determine borrower eligibility. Instead it requires borrowers to prove their creditworthiness by setting aside the estimated monthly mortgage payment, minus their current rent, in a savings account for three to six months before receiving loan approval.

The group's default rate hasn't exceeded 1 percent, NACA says.

Meanwhile, the mission has expanded into other areas such as teaching responsible homeownership, lobbying against predatory lending and providing intervention services for borrowers at risk of foreclosure.

The Boston news media have described Marks as a "pit bull" who stands up for regular people and somehow manages to get results.

Some question his tactics, such as camping out on the lawns of bank CEOs with picket signs and bullhorns to shame them into helping borrowers.

But Marks said those tactics have helped NACA secure binding agreements with most major banks. There are two loan-modification programs: a 30-year, fixed-rate loan with interest as low as 2 percent for borrowers with a steady income, and a delinquency forgiveness and forbearance program for those who are out of work.

Conference attendee and Scottsdale homeowner Glenn Piccolo on Thursday reached an agreement with Bank of America that will reduce his monthly payments by about one-third.

The deal does not reduce Piccolo's loan balance, which is now about twice what he paid for the home, but he was elated that the lender met him halfway.

"I did agree to buy the house at that price," Piccolo said. "They lowered my payment, so I'll pay them what I owe on the house."

by J. Craig Anderson The Arizona Republic Feb. 4, 2011 12:00 AM

Phoenix-area homeowners get loan help from non-profit

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