NACA Asks for Restructuring of B&C Loans
The Neighborhood Assistance Corporation of America is calling on subprime borrowers to stand up to their lenders and demand that their loans be restructured or modified so that the payments remain affordable.
NACA chief executive Bruce Marks stressed during a press conference last week that resets on adjustable-rate mortgages are increasing and up to three million families could lose their homes.
"The goods news is that this is a slow-motion crash," Mr. Marks said, and foreclosures are preventable. "But we need a commitment from politicians and lenders" to stop the foreclosures and "restructure and modify these loans."
With $10 billion in financial commitments from Bank of America and Citigroup, NACA provides low-cost, fixed-rate mortgage financing for first-time homebuyers and it has dedicated $1 billion to rescue troubled borrowers from foreclosure.
At the press conference, NACA had a group of Countrywide Financial Corp. borrowers tell their stories about being placed in subprime ARMs with 10% and 11% interest rates and their problems in dealing with escalating monthly payments.
Most complained that that when they got behind in their payments, Countrywide servicing representatives provided no help and just socked then with $5,000 and $10,000 fees and penalties when they tried to make payments. Several of the borrowers have lost their homes in foreclosure.
Mr. Marks said Countrywide's lending practices have "set up hundreds of thousand of homeowners to fail," while it is forcing tens of thousands of homeowners into foreclosure by refusing to work with its borrowers or NACA.
Countrywide responded by saying it is an industry leader in providing workout solutions and this year it has helped to keep more than 35,000 borrowers out of foreclosure.
The Calabasas, Calif.-based lender also said that it is working with 28 homeowners that NACA counselors have referred to the company. But the NACA chief executive said Countrywide executives have refused to meet with his group. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com http://www.sourcemedia.com/