Thousands seeking help with mortgages jam Palm Beach County

MolonLabe2009 · Aug 28, 2010

The Recession is Over, America's Back and it's a Recovery Summer.

Oh. Wait. Never mind.

The Palm Beach County Convention Center filled again Friday with tales of mortgage woe.

Before dawn, with a plump white moon overhead, a line of desperate home owners trailed around the outside of the building. They slept in beach chairs or on blankets on the ground, refugees from a bad economy, bad loans, or bad decisions.

They stayed even as the rain poured down on them.

Because for most of the people in the queue, the Neighborhood Assistance Corp. of America is the end of the line. The last chance to save their homes.

The nonprofit will be here through Tuesday helping people get lower monthly payments through loan modifications.

At least 1,000 people arrived before the doors opened.

"If the banks won't come to you, you go to them," said Detroit resident Brian Kelley, 44, as he blinked rainwater from his eyes.

Kelley, a Ford Motor Co. employee whose salary has been cut nearly in half, flew into Fort Lauderdale on Thursday, got a ride to the Tri-Rail station, and took the train into West Palm Beach.

He had a cooler with sandwiches and water, anticipating a long day.

"Desperate times take desperate measures," Kelley said.

He's not the only desperate one.

More than 50,000 people are expected to attend the five-day, around-the-clock event, said Bruce Marks, the CEO of the Boston-based NACA. Considering many people come in pairs, that could mean as many as 25,000 home loans will be worked on by the army of NACA counselors, who wear yellow T-shirts bearing the NACA slogan: "Loan Sharks Beware."

During the group's visit to West Palm Beach in February, NACA reviewed 24,000 loans, modifying, at least temporarily, 16,097.

NACA brings hundreds of bank representatives to its "Save the Dream Tour" events. Borrowers first meet with a NACA counselor to settle on an affordable mortgage payment, typically something that is 31 percent or less than their gross salary.

They are threaded through waiting stations, filling in rows of seats like a line for a roller coaster.

Finally, the borrower speaks face-to-face with the bank representative.

The typical successful result is a new fixed interest rate as low as 2 percent. Some people also receive principal reductions on their loans.

Marks said he doesn't use the federal Making Home Affordable program, which allows lenders to extend a loan to 40 years and award a modification with a five-year expiration date.

Instead, he said he negotiates deals with banks that work with him because "it makes good business sense."

"We get the job done, and we get it done in one shot," said Marks, whose group has received $41.5 million in federal aid from the National Foreclosure Mitigation Counseling Program.

NACA also gets a $500 payment for every permanent modification that results in three successful mortgage payments, Marks said.

Marks has harsh words for banks, such as Chase, that refuse his advances.

In a cavernous convention center ballroom, hundreds of people sat Friday waiting to see a counselor. Marks had the microphone.

"We are suing Chase," Marks said to uproarious applause from the crowd. "We want to make Chase the example of don't mess with NACA and don't mess with homeowners."

Chase, which has two permanent customer service centers in Palm Beach County, is conducting a similar loan modification event in Orlando this week.

By 10:30 Friday morning, new arrivals to the NACA event were being directed to park at CityPlace, because the 1,100-spot convention center lot was full.

"I would encourage everyone to be patient because NACA is really doing a great job," said West Palm Beach resident Jean Kercius, 38, who was pulled to a podium in the center of the convention center floor to announce his successful loan modification.

Kercius, who recently lost his job as a nursing assistant, got a fixed 2 percent interest rate and a principal reduction that cut his monthly payment from $1,333 to $716.

"I am overwhelmed and overjoyed," he said.

But not everyone finds financial salvation with NACA.

Dennis Jacobs, 65, came from San Diego for the event and to visit his parents in Boca Raton.

A dentist, Jacobs sold his practice a few years ago, and is having trouble paying his mortgage. He's not late on his payments, however, which makes him a lower priority. He didn't get a loan modification, but didn't leave angry either.

"I think it's very helpful for people to see how all folks are affected by the real estate crash and downturn in the economy," he said.

Seven hours after he arrived, Detroit resident Brian Kelley also left empty-handed.

He blamed a breakdown in communication between the owner of his loan and his servicer for the failure.

"I'm not disappointed," Kelley said. "It was very educational. I got a lot out of it.

"The fight goes on."
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Desperate homeowners line up for mortgage modification marathon
http://www.palmbeachpost.com/money/...or-mortgage-modification-marathon-882338.html

waltky · Nov 8, 2010

Go to a big bank for a mortgage...

Fed: Small banks crack down on mortgage lending
November 8, 2010 -- Even with interest rates at historic lows, you might still have a hard time getting a mortgage: Small banks have tightened standards when it comes to lending to homebuyers, according to a survey issued Monday.

After easing their standards in July, commercial banks reversed that trend in October, the Federal Reserve reported Monday after surveying loan officers at 77 banks. Smaller banks -- those with annual sales of less than $50 million -- mostly tightened their standards for traditional mortgages in the last three months, and large banks -- those with assets of more $20 billion -- widely left their standards unchanged, the Fed said.

Signaling that banks are continuing to crack down on the riskiest mortgages, less than half of the banks participating in the survey made sub-prime loans in the last three months. Banks' willingness to lend money has become a focal point in the economic recovery. Economists warn that sluggish consumer and business spending are both holding the recovery back, and some say, tighter credit conditions are part of the problem.

But at the same time, banks maintain that they are lending even as the appetite for new loans has dropped off. In the latest Fed survey, many banks reported weaker demand across a broad range of loans, including mortgages, credit cards and business loans.

That drop in demand is "disturbing," said Paul Ashworth, senior U.S. economist with Capital Economics, especially after the Fed announced at least $600 billion in monetary stimulus last week. The policy, known as quantitative easing, is meant to boost consumer and business spending by making it cheaper to borrow money. "On this evidence, claims that quantitative easing will lead to a new boom in bank lending look well wide of the mark," Ashworth said in a research note. " In practice, lenders remain reluctant to lend and borrowers remain reluctant to borrow."

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waltky · Feb 15, 2011

Banks scared to lend to minorities...

Lending to blacks, Hispanics plummets during housing crisis
Feb 14, 2011 - Since the housing market collapsed, mortgage lending to African Americans and Hispanics has plunged precipitously by more than 60 percent, according to a new study of loan information that banks submit to the federal government.

Together, African Americans and Hispanics were able to borrow 62 percent less to buy or refinance homes in 2009 than in 2004, before the market crashed, the computerized analysis finds. With lenders imposing tighter credit standards, mortgage dollars going to non-Hispanic white borrowers also declined, though by considerably less: 17 percent. Asians fared best, obtaining nearly an equal amount in mort(*)gages. The study, using Federal Reserve data, was conducted by Maurice Jourdain-Earl, founder and managing director of ComplianceTech in Arlington, Va., which advises financial institutions on fair lending practices.

Mortgages made to Hispanics have decreased the most, by 63 percent, to $78 million in 2009 from $214 million in 2004. Lending to African Americans has dropped to $49 million from $122 million, or 60 percent. Whites have been affected much less and Asians barely. New mortgages to white borrowers declined to $1.1 billion from $1.3 billion, or 17 percent. Lending to Asians stayed almost the same.

Whites were about twice as likely as African Americans and Hispanics to be approved for prime mortgages with the lowest interest rates, while members of the two largest minority groups were two to four times more likely to receive subprime loans, which have higher rates. By contrast, the disparities were much narrower for loans insured by the governments Federal Housing Administration, which has attracted a growing number of borrowers during the credit crunch.

The study concluded that a dual mortgage market has emerged, with white and Asian borrowers having better access to lower-cost mortgages than African Americans and Hispanics, who on average pay more to own or refinance a home if they can obtain a mortgage. The higher cost for mortgage credit translates into less money for basic necessities, Jourdain-Earl writes. Reasons for the lending disparities are not directly reflected in the national data, and the Federal Reserve Bank does not collect information on foreclosures by race and ethnicity.

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waltky · Nov 13, 2011

No more Mcmansion mortgages...

Congress weighs home-loan limits
November 9,`11 - The debate over setting new limits on government support for the housing industry is facing a crucial test in Congress this week as lawmakers decide whether to extend federal guarantees for home loans up to $729,750.

The National Association of Realtors has been pushing hard for the extension and managed to gather 60 votes for an amendment that would accomplish it, sponsored by Sen. Johnny Isakson (R-Ga.). The Realtors, perhaps not coincidentally, have been Isaksons biggest benefactor, spending $604,000 last year on his reelection and a total of $1.3 million, including for his first run for office in 2004. The support for Isakson is part of an unusual strategy by the trade association to spend large amounts not directly in donations to candidates but rather on independent campaign advertising. The strategy is one that other large trade associations may start to adopt in the wake of the Supreme Courts Citizens United decision last year, which freed corporate and union spending on campaign advertising.

The Realtors have always had a large political action committee fueled by donations from thousands of members. The donations are capped at $5,000 under federal law, allowing the association to spend $6 million last year helping 11 friendly lawmakers. Those efforts got an extra boost last year with an additional $1.1 million that the association transferred from its general treasury to a super PAC created under the new election rules. Isakson said he pushed to restore the higher limits that expired Sept. 30 because he thinks it is premature to withdraw government support from the recovering housing market. I was in the single-family housing business for 30 years before I came to Congress, Isakson said. I was proud to be a Realtor. Im proud to have their support.

The fate of the amendment will be decided in the coming days as a House-Senate conference committee attempts to resolve differences in spending bills passed by the two chambers. The measure never got traction in the House, where Republicans argue that its time to let the free market take a bigger share of risk on housing. The provision would increase the maximum size of loans guaranteed by the Federal Housing Administration and the government-controlled mortgage giants Fannie Mae and Freddie Mac. The government limits home loans it supports to 125 percent of the median home price in a region, up to $625,000. The higher limit of $729,750 was first passed in 2008 and had been extended several times until this year. Advocates for low-income home buyers say that keeping the loan limit at the higher level will reduce the ability of the government to help the people who need it most.

If you expand these loan limits, whats going to happen to the people at the bottom rung? said John Taylor, president of the National Community Reinvestment Coalition. The FHAs limited resources need to be for those who have no alternative but a government guarantee to become homeowners, he said. Because homes are more expensive in places such as New York and California, the expiration has had a greater impact in those regions. Rep. Ken Calvert (Calif.) is one of the few Republican lawmakers who signed on to a bill supporting higher loan limits. Hes also one of the biggest recipients of advertising spending by the Realtors association, receiving $606,000 in help during his 2010 campaign. The goal of that spending is basically helping our friends and making sure the folks who are good on our issues are getting elected and reelected, said Jamie Gregory, the deputy chief lobbyist for the Realtors association.

Calvert said he has had a consistent record on the issue. Many people in California are precluded from qualifying for a [government] loan simply because of the high housing prices in many areas, including in my congressional district, Calvert said. Under federal law, spending by the Realtors or other interest groups cannot be coordinated with candidates or their campaigns. Another top recipient is Rep. Dennis Cardoza (D-Calif.), who received $526,000 in assistance. In a recent speech announcing his retirement, Cardoza excoriated the Obama administration for its housing policies, saying, The administrations inaction is infuriating. Several other top recipients of the Realtors spending are members of the powerful House tax-writing committee. Realtors have recently been fighting proposals to cap or eliminate the income tax deduction for mortgage interest.

Source
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Thousands seeking help with mortgages jam Palm Beach County

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