This week, while Congress was busy providing assistance to Fannie May and Freddie Mac, a non-profit organization called The Neighborhood Assistance Corporation of America was provided free consulting to homeowners who could no longer afford their mortgage. The five day event, called “Save the Dream of Home Ownership”, ended on Wednesday after providing assistance to countless people who are at risk of losing their largest equity holding. NACA has also been providing financial counseling to the countless Americans who are lost in the complexities of the US banking system.
MATTHEW PALEVSKY, PRODUCER: Foreclosure signs that litter American lawns have been the only images of the US housing crisis until this week, when thousands of homeowners lined 16th Street three blocks from the White House, waiting for help to lower their mortgage rates. NACA, or the Neighborhood Assistance Corporation of America, is holding a five-day event called “Save the Dream of Home Ownership” to provide free counseling to anyone looking to restructure their burdensome mortgage. Tens of thousands have lined up since Sunday when NACA opened its doors, many of whom say they signed a loan they didn’t understand and that they can no longer afford.
PALEVSKY: Do you feel like you knew or were fully informed when you signed the loan?
ANGIE BAILEY, WAITING FOR NACA COUNSELOR: No. No, I wasn’t, because I was promised in one year I could [refinance], but that was a lie, because now, of course, you know, I had incurred some monies in trying to fix the house up, brand new system, putting a half-bathroom in my home. So that was the debt. So now my declaration was high, my income is low, can’t afford it, and they refused to do anything to help me.
PALEVSKY: Can the government do anything to help you?
BAILEY: The whole program will not help me, because the guidelines for the whole program are too stringent. Okay? Therefore, what my understanding is they have people who are paying on time and, you know, don’t have any blemishes and stuff like that, but that’s not the people out here. You know, we’re late on our mortgage. We need help, ’cause we didn’t ask for this. We didn’t ask for this. You know, I asked—when I bought this house, I wanted to live in this house forever. This was my house I was going to die in, okay? But I can’t do that now, ’cause I can’t afford it. So I’m kind of here now to see if I can seek some resolve.
PALEVSKY: Many of the people standing in this line have been waiting for hours. And once they get inside, they’ll join an orientation meeting that begins an educational process that NACA requires everyone to complete before they can receive one-on-one assistance. After orientation, attendees will enter this ballroom. We’ll go meet with someone like Lesah Rezario, one of NACA’s over 500 mortgage advisors.
LESAH REZARIO, NACA MORTGAGE COUNSELOR: These are individuals who have predatory loans. A predatory loan is a loan that will eventually become not your home anymore, because it is to benefit the banks, so it is predatory. When you went in for your two-year fixed loan, you went in at a six percent, five percent interest rate with this income. So this income that you showed the bank proved that you can make this loan payment at six percent—never did it say you could make this loan payment at nine, at ten, or at twelve percent. Therefore the only individuals that were going to benefit from these loans were the investors. The loans were set up for failure. The government should have stepped in way before.
PALEVSKY: Lesah speaks from experience. Before coming to NACA, she was a self-described predatory lender and had worked for a number of banks, including Fremont Investment & Loans and IndyMac before they both went under. Lesah didn’t think there was any problem with the mortgages she was giving out until she fell victim to one herself.
REZARIO: Never did I think that it would lead to this at all. I don’t think many people did. I don’t think the people—you know, sure there was a lot of malicious people in this industry. It was a very money-hungry industry. Did we expect the party to stop eventually? Yeah, and it did, and it did hard, and I lost my house.
PALEVSKY: Tell us what happened.
REZARIO: Well, I was on a 2/28. My payment went from $1,800 to $2,400 to $3,600 to $4,800 to $6,200. I could not refinance because I had a declining income. Why would I have a declining income? I was a lender in the mortgage industry.
PALEVSKY: Lesah believes that the main problem is a financial system that the vast majority of Americans don’t understand.
REZARIO: The lack of knowledge that these people are entering into the largest purchase of their lives, and they’re being told, “Sign here, sign here, sign here, sign here.” That’s where NACA comes in. NACA is all about the knowledge. And you have a five-hour class before you even get reviewed.
PALEVSKY: During an orientation session, it became clear that few people here understand what they’ve gotten themselves into or how to get out.
NACA SPEAKER: How many know what restructuring means? How many know what refinance means? That’s fine. How many of you don’t know what you’re doing, which is probably how you ended up signing that damn mortgage in the first place?
PALEVSKY: After NACA counselors create a comprehensive spreadsheet of a homeowner’s finances, they send a restructuring proposal along with the homeowner’s scanned financial documents to the lenders. Jacqueline Evans is an example of what happens if everything goes smoothly.
JACQUELINE EVANS, NACA SUCCESS: She stopped me in the hallway and told me she’d been waiting. And I had to go to the restroom, and I still have to go, and that was an hour ago. And we just finished working with Chris Wheeler at Select Portfolio Servicing, and he was able to work with us on—.
PALEVSKY: He agreed?
EVANS: Yeah, he did.
PALEVSKY: He knocked down her mortgage?
EVANS: Yeah, 30 percent.
PALEVSKY: It’s going to be more affordable for you?
HOMEOWNER: Yes, it will be. Yes.
(OFF CAMERA): So NACA comes through again.
HOMEOWNER: Coming through again.
PALEVSKY: And why did he agree? What makes the difference when you’re negotiating something like this?
EVANS: She did a lot of the legwork by getting him on the phone. And we had two phones working at a time—I was talking to him on one phone with our connection, and she’s talking to him. But I think, you know, knowing that we were here during this event and knowing that, you know, the eyes were watching made him more, you know, willing to work with us.
Please note that TRNN transcripts are typed from a recording of the program; The Real News Network cannot guarantee their complete accuracy