Homeowners line up for mortgage relief help

June 17, 2011 5:25:37 PM PDT
Homeowners from around the Bay Area have come to downtown San Jose from Marin and Solano counties to the north and Gilroy to the south out of desperation after trying to deal with the lenders. They are homeowners, such as Will Clayton and Marian Padilla, who want to stay in their houses. A nonprofit group called the Neighborhood Assistance Corporation of America (NACA) is set up in a huge tent behind the San Jose Convention Center to help them organize their paperwork and to meet face-to-face with their respective lenders. In just over half of the cases, negotiations in one day will yield a modification of the loan because of a reduction in the interest rate or a reduction in the principal amount owed. Other cases may require a few more days.

NACA travels to major cities across the country with staff counselors to do five to six day events like the one that started Friday morning in San Jose. The San Jose event will run for six days through next Wednesday from 8 a.m.-8 p.m. The services are free. NACA receives its funding from federal programs and from fees it charges lenders to organize these events.

Every single person interviewed by ABC7 Friday had a tale of woe trying to deal with lenders on their own. Paperwork was lost, mortgage officers turned them down multiple times or their documentation was incomplete. Laid-off pilot Jeff McLaughlin from Sacramento said he really welcomed the opportunity to sit across a table with his lender, something that had never happened before.

California ranks third in the nation in the number of foreclosures.

Will Clayton is disabled because of a heart condition. He left the NACA mortgage event Friday with new terms from Bank of America he can handle. The interest rate was lowered from 3.62 percent variable to 2 percent fixed. That dropped his monthly house payment from $3,000 to $2,000.

NACA CEO Bruce Marks says most people will get help but it is important for distressed homeowners to arrive with a complete set of their loan papers, financial records and other pertinent data so counselors can analyze their situation before approaching the lenders for a restructured loan.

"Same day, about 55 percent will walk away with an affordable solution; over 30 days, over 80 percent," Marks said. "We have legally binding agreements with every major lender and the biggest investors covering over 90 percent of the mortgages in the country, that's why we're so successful."

Kevin McLaughlin started volunteering for NACA after he got help. The difference, he says, is being able to sit down with a lender.

"NACA puts you in front of your banker; now instead of being a number or a loan package that they've sent, now you're a person," he said.

No appointments are necessary, although homeowners should plan on sitting through a process that can take several hours.