naked capitalism

I’m a bit mystified, given the abject failure of various government-devised “save the mortgage borrower programs,” that the Neighborhood Assistance Corporation of America’s mortgage mod marathon’s aren’t getting more coverage, and that limited media attention may be contributing to falling turnouts at its events. It’s telling that a Google News search confirms that the best recent story on this US program comes in the UK’s Guardian:

… For five days, the Neighbourhood Assistance Corporation of America (Naca), a not-for-profit organisation, is working round the clock to help homeowners hang on to their houses. More than 12,000 people have signed up in advance and more than 20,000 are expected to turn up, travelling from as far afield as California, Georgia and Maryland….

Inside, hundreds of loan advisers sit behind trestle tables. They are colour-coded: Bank of America workers wear red, Citigroup are in blue and Wells Fargo are in black. Even the moribund government-supported refinancing giants Fannie Mae and Freddie Mac are here, but their budgets don’t run to natty coloured clothing.

Borrowers go through orientation and financial counselling sessions. Then, for the luckier applicants who can show a steady income, the loan advisers have the power to reduce interest rates or even write off a proportion of loans.

Yves here. What the Guardian does not state clearly enough is that NACA, working with borrowers, does the part that has been a stumbling block for servicers: it works through a borrower’s finances to determine viability on an individual basis. From NACA’s website:

NACA has developed the industry standard in utilizing technology for mortgage counseling, processing and underwriting. While other lenders employ software to underwrite loans using risk-based pricing that considers only the applicant’s credit score, debt ratios and loan-to-value, NACA utilizes customized, state-of-the-art technology which enables NACA to engage in character-based lending. NACA has developed a proprietary software system called NACA-Lynx™ that stores, manages, and manipulates the information and documentation necessary for NACA’s underwriting. This software allows for consideration of a Member’s overall circumstances and incorporates their own explanations of credit history in order to make a character judgment on their ability to make the mortgage payments. NACA-Lynx is a totally paperless mortgage counseling, processing and underwriting system. No other system exists that compares to the sophistication and comprehensive nature of the NACA-Lynx.

The NACA-Lynx is a web-based system. Thus, all of NACA’s offices are able to access the system via the NACA data center seven days a week, 24 hours a day with real-time updating. The data center is equipped with servers in a storage area network and utilizes off-site back-up and redundancies for all equipment. Each NACA staff person has a computer with a high speed processor, a multi-function scanner/printer/copier, and a large screen, high-resolution LCD monitor for easy viewing by both the staff person and the Member as the work is done in the NACA-Lynx.

A NACA staff person would scan the Member’s documents into the NACA-Lynx and return the original documents to the Member without NACA needing them or copies for its files. In addition, the Member can fax or e-mail their documents directly into NACA’s data storage using an individualized, dynamically generated NACA Cover Sheet bearing their unique ID number. Members fax their documents toll-free to NACA’s fax server at 1-877-FAX-NACA (1-877-329-6222). The Member’s ID is read by the fax server using optical character recognition software and then automatically routed into the Member’s pending file. A NACA staff person assigned to the file is notified of the incoming document via e-mail and transfers the document from pending status into the Member’s permanent file by reviewing the document and completing some basic data entry.

Florida, where an event is taking place ought to be ripe grounds for this sort of program, with the Mortgage Bankers Association reporting that one in nine homes in the state is at risk of foreclosure this summer. Yet participation at this event fell short of expectations despite being held in one of the mortgage crisis epicenters and being open to borrowers from all over the country. As the Palm Beach Post reports:

About 8,200 households had sought help from the Neighborhood Assistance Corp. of America through Monday afternoon, fewer than the non-profit group had expected.

NACA, which works with homeowners to get lower monthly mortgage payments through loan modifications, began 24-hour-a-day counseling sessions Friday morning at the Palm Beach County Convention Center.

The Boston-based company will be at the convention center until 8 p.m. today when it will end its second five-day visit to West Palm Beach.

About 24,000 people attended the first event in February, with 16,097 loans receiving a modification.

Yves here. As noted at the top of the post, this program seems to be very much underpublicized. I did find some reports in Florida papers, but virtually none outside the state. I’m wondering whether readers have any informed guesses as to whether the shortfall for the latest event was merely a one-off, a function of lack of press, or an indicator of borrower issues (inability to organize needed paperwork? proof that only a few are willing to expend effort to save a deeply underwater mortgage? general defeatism given all the deserved bad press about government mortgage mod programs?)