I have promised my readers that I would follow this new deal that the Neighborhood Assistance Corporation of America (“NACA”) has with Countrywide.
What apparently looked like a sweet deal is actually a really sour deal for most homeowners. Yes, it WILL help SOME struggling borrowers but not NEARLY enough.Check out these requirements:
- Existing loan with Countrywide
- You cannot own other property, and the property to be refinanced must be owner-occupied. (who gives a damn if they own another property? The main thing is it’s their primary and that’s all they should care about!)
- You must have a predatory interest rate or unaffordable loan terms. The interest rate for the current mortgage(s) must be 10% or greater or considered to be predatory, or the home must be in need of substantial repairs. NACA considers loans predatory that have a teaser rate, but become high rate once they reset. (Wholy moly! What the hell is this? So someone dying form a toxic 9.5% rate is up the Countryfried creek without a grease paddle? That’s a joke!)
- The property to be refinanced must be within a NACA region where the NACA Program is available. (Again, a joke!)
- The property to be refinanced and all requested money for improvements cannot exceed NACA’s maximum purchase price limits set for that region. (This may mean Californian’s are screwed?)
- You cannot have multiple refinances where you are continually taking money out to pay for your living expenses. This does not include refinances to obtain lower rates or to pay for one-time expenses such as home repairs, medical expenses, or education. ( Well that cuts out another 75% of people)
- You must have had your current mortgage for at least 24 months. (reasonable)
- All properties to be refinanced must have thorough home inspections—a complete house inspection and termite inspection. If applicable, a septic inspection will also be required. (Who’s paying for that?)
I respect NACA and Bruce Marks. But I personally feel that this isn’t really that going to put much of a dent in the Countrywide REO machine and the foreclosure crisis. What about all of those Countrywide predatory loans that are under 10%? A loan doesn not have to have an interest rate of 10% or higher to be predatory Bruce.
I think Michael Blomquist of – www.discountrealty.com says it best:
Only two short months after Bruce Marks, CEO of NACA publicly announced that he would begin to prey on Countrywide, Marks and Countrywide struck a deal. While watching the press conference (available here), my first reaction was Et tu, Bruce? How could Bruce sell out so easily? This man is a pitbull and his work as a consumer advocate is only rivaled by Nader’s Raiders. Instead of the normal combative dialogue witnessed in ultimate fighting and Mark’s customary conferences the two sides appeared to be auditioning for a Broadway musical. Only minutes into the conference both groups were singing and dancing to each others’ praises. As the conference continued I became torn between thoughts of Countrywide throwing the “pitbull” a bone and a familiar battle cry, “keep your friends close and your enemies even closer”.
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http://news.medill.northwestern.edu/chicago/news.aspx?id=66689
Link above gives a nice summary report… And I just love this quote…
“We’re starting to see foreclosures on people who have credit scores of 750 and a family income of $150,000,” he says. “It’s not the person, it’s the loan.”
In short… “It’s the loan, stupid.”
- Paul
I wonder when this bill will be passed.I want to give up my house already.I have abad loan and in a house I can’t afford.We need the new bankrupcy law to change the loan amount and rate so we can continue paying for the house.
Is it the loan you cannot afford or the home? Big difference. But I wouldn’t
. It may take a while.
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I believe the following act would solve 90% of today’s credit problems.
Home Ownership Act of 2007
Retroactive to 06/01/2007 and all current and future first mortgages on owner occupied dwellings in the United States and its Territories shall bear interest at a maximum rate of (4 ½) four and one half percent. Current first mortgages above this rate will immediately be reset to this rate and the borrower will be credited with any payment in excess of this rate since 06/01/2007.
Simultaneously and retroactive to 06/01/2007 all interest earned on the above described mortgages will non taxable at either state or federal level for income taxes.
Mike Murphy
I am glad that I found sites like this so hopefully I can render some help & advice to some of you. 1. Be careful of advocacy groups such as NACA & ACCORN. I have a strong background in loan servicing up to 15 years with the nations top leading loan servicing portfolio holder & just reecently I had answered an advertisement by NACA where as they were hiring for experienced Loss Mitigation Specialists. I tried to make the transition to an advocacy group & was heavily recruited by a friend. Trust me people right NACA or any advocacy group that does not have a history of servicing practices in the are of default servicing is only doing more harm than good. NACA’ s cashed it’s check in on that side of the business by due the originiations side of the game has been saturated. They have lost volume on their originations portfolio so now they are trying to penetrate the world of default servicing. Bruce Marks scrutinizes the banks for having charging prime customers in the past for PMI(Private Mortgage Insurance). He says that PMI should not be charged to the customer while they are paying their monthly payments. PMI allocation of a borrowers payment goes into a default bucket for your loan servicer/ lender in the event the loan goes into default leading into foreclosure thus the loan is guaranteed thru an insurer of the servicer/ investor choice. This PMI will cover fees incurred while in FC & cover some of the deficiency in the event the loan goes to FC sale & that is only if is suffered some deficiency. So Marks on the origination side when it was high volume was chaging a membership fee for up to about the 1st 6 years of the loan which is almost the equivalency to that of when a Prime Borrower could drop their PMI on their home with their lender(other intagibles factor into that).
Now the question arose if the banks give him billions to take a potential subprime borrower to a Prime borrower buy going through the program where was the leverage in the underwriting guidelines that guarantee his loans in the Prime market? The membership fee. In the servicing world this fee varies from $16-100 depending on the house size, market etc. however his fee is always one standard rate $40-$50. Can you say contradiction. This does not include the four events a year which are usually marches the members have to attend. Is it all coming together now. No matter the rhetoric he preaches if the numbers show up at these marches he has given you the vision he wants to see him as.
Now being that his non-profit business is not making a profit you have to pull back the curtain now a bit. He is no longer making money from his originations portfolio now that originations are down now he is trying to enter the world of servicing which is a totally different animal & take it from me. These guys have no idea of what they are doing. Now whatever deal that have set up with Countrywide & the servicing agreement supposedly they have signed with them they need to just work with those borrowers & really I did not see too much help with those borrowers/ members & come to think of it NACA considers 80/20 loans predatory as well & before leaving I saw several loans coming through the HOMESAVE program that members said were loans originated out of NACA offices that were 80/20 loans. Hmmmmm. But NACA tries to fry chicken with their mouth’s. They make promises & I wish they would stop cause I saw a lot of houses go to FC sale due to broken promises of 3 & 4% fixed interest rates. Postponement of FC Sales & they have no resources to do these things. One of my last counselings to a woman was a to a woman who had a Citi-Mortgage Loan. Now the ladies problems started way in Jan.- late March. Needless to say the lady fell behind & approached her servicer. Now at the same time she was advised to contact NACA. During the conversation I looked thru her file with a team member & she asked me was that the loan mortgage statement(item needed in order to meet the “NACA” criteria) I told her “no”. That is a loan modification agreement. I asked the woman did she no that she had an approved loan modification agreement with Citi agreeing to fix her IR at 7.125% repacking about $11000 worth of payments & other additional fees on the principal balance. She said she did not no what the paper work was. I advised her that during the course of the delinquency you had to have talked to your servicer/ lender & they advised her to forward her information after doing an assessment over the phone. Her response was yes she did. I then asked as to where is the signature page & she responded by stating she did not know. I asked why she did not send the loan modification back signed & she advised that she was instucted by the NACA representative in their offices not to send it back & that they could get her a better deal & that the budget that she gave NACA was a actual better budget. When I looked at it two things stood out though. The lady was giving $400 per month for Tithing & spending money $583.I quesitioned those two things & asked if she could cut back a little because NACA was trying to attain a 3% interest rate & decrease her payment almost $1000. I advised her that this was a bit steep & original agreement when she got the loan was fixed @ 7.125% & orinally the way mods were set up they were for hardships in which she truthfully had. Needless to say NACA’s proposal submission was originally in August 08′ however it has yet to be received by the lender & her home goes to sell on January 6. Now she is receieving these emails from NACA:
We are awaiting a response from your lender. We have called them and sent them either a fax or email. IF THERE IS NO SALE DATE SCHEDULED PLEASE HIT ‘REPLY ALL’ AND TYPE ‘NO SALE DATE’ THEN FOLLOW UP WITH THE LOCAL OFFICE IF YOU HAVE NOT DONE SO ALREADY. If there is a sale date we will do everything in our power to get the auction postponed, but you need to have a Plan B “IN PLACE” in case the lender does not cooperate. PLEASE ACT ON YOUR PLAN B IF YOU DO NOT HAVE A POSITIVE RESPONSE IN A TIMELY MANNER. You cannot make NACA your only plan for saving your home. Call your lender and let them know that you want to save your house. It is very important that you save as money as you can to put towards working out a plan with the lender. Also if you have not done so already please look up your local office on our website to a schedule a counseling session immediately so your file can be submitted for review and a determination made about the best way for us to assist you. PLEASE WATCH YOUR EMAIL FOR UPDATES USUALLY STARTING ONE WEEK BEFORE THE SALE DATE. LET ME ENCOURAGE YOU AGAIN TO SAVE AS MUCH MONEY AS YOU CAN. PLEASE BE AWARE YOU ARE ULTIMATELY RESPONSIBLE KEEPING TRACK OF SALE DATE AND FOR SAVING YOUR HOME, SO PLEASE THOROUGHLY EXPLORE ALL OF YOUR LEGAL OPTIONS. Speak to your lender and ask them what options you have for saving your home. Seek legal advice, free or otherwise. Ask a few bankruptcy lawyers about every legal option for saving your home. Call ALL your elected officials including Town Selectmen, City Counselors, State Representatives, State Senators, Mayor and Governor, as well as the your state’s Banking Commission and Attorney Generals Office. Ask them for suggestions about what you should do and who you can call. If the problem is limited income, you may want to get a roommate to add the income needed. KNOW HOW MUCH TIME YOU NEED TO CARRY OUT YOUR ‘PLAN B’ AND ACT ON YOUR ‘PLAN B’ IF YOU DO NOT HAVE A POSITIVE RESPONSE IN A TIMELY MANNER.
Countrywide recently gave us a loan mod which actually increased our monthly pymt by $28 but brought us current, we were 2months behind due due my husband being laid off for approx 3months. He has returned to work, however, our ARM will adjust in April 2009 and the letter said our pymt MAY increase significantly. I called CW and requested another loan mod and sent in the required paperwork. I am concerned that since we are now “caught up to date” will we be denied the pending loan mod request? I am not very saavy at all this and I am open to any suggestions.
Huh…why would they do that & raise their risk of re-occurrence of redefault when your loan & others start trending into hi deliquencies in the manner of months. But NACA promised you a fixed rate didn’t they? Keep in mind that Countrywide is an extension of BofA now however it sounds like BofA has not included these loans in their primary loan population & is still having them serviced as a 2nd tier servicer. This means they have limited loan retention products & are still operating under some strengent retention workrules. This was a proving ground for NACA & lets be cognizant that this is a business. If BofA sees that this subsidiary(Countrywide) is not performing in an increasingly positive manner the possibility of migrating these loans & many others like yours into their primary portfolios is & will be inevitable. They will not allow Marks nor anyone place them in a precarious situation Did you get the loan via NACA. Like I have previously mentioned NACA is not experienced on the servicing they are more familiar with the originations side…