It’s still pre-season for football, but on Tuesday in New England, the Patriots' stadium will be open. It’s not for football and it’s not for fans -- it’s for borrowers in danger of losing their homes and for the mortgage lenders and banks who hold or service their loans.
About twenty banks and mortgage companies will be there, and if the event is anything like a loan restructuring event held recently in Washington, D.C., many thousands of borrowers will show up as well.
The effort is designed to help borrowers learn what their options may be and to at least get them face-to-face with their lenders. Will it save all the folks in Massachusetts who are bordering on foreclosure?
Not by a long shot.
Foreclosure deeds in Massachusetts more than doubled in the first half of 2008, according to the Warren Group, which tracks the numbers in the northeast. That’s up 117.6 percent from the year before. More than 1,000 homes in the state went into foreclosure just in June.
Jane Wells' CNBC.com blog:
- Countrywide Anniversary: A Look At "Year From Hell"
The question is: Do these big-name, super-sized foreclosure rescue events really work? It depends on what your threshold of success might be.
In July I went to the D.C. event that was being run by the Neighborhood Assistance Corporation of America (NACA), which is actually based in Boston. 20,000 people showed up looking for help, and hoards of NACA reps, seated behind hundreds of computers, scanners and fax machines, were taking in documents, verifying information and contacting lenders right then and there.
I checked in with NACA today to see what the results are so far. Of the 20,000 that showed up, NACA could only see and submit 10,000; and only 2,000 got fully restructured loans. I asked NACA rep Darren Duarte why. Here is his response:
We couldn’t see 20,000 in five days. We had to turn some away each day. We were seeing people up until 11pm some nights and close to 1am one of those days. We asked people who we didn’t get a chance to see to use our call center to begin the process, and/or sign up on our website to make an appointment at their local NACA office.
As for why it’s taking so long, the lender/servicers are overwhelmed. When you send lenders thousands of proposals, they get backed up, and it takes them longer to respond. Also, many of the lender/servicers who promised to be in their offices working on cases from the event Sunday, July 20th, did not show up. They were there Saturday, but most didn’t come Sunday. That was disheartening, but that’s another reason for the delay. Plus some of the lender/servicers require more documentation from the homeowners and that’s taking a little time.
In other words, it’s just not that easy. The volume, the complexity and the paperwork involved are overcoming even the best intentions. Also, some folks are just too far gone financially to get their loans restructured.
I was at that NACA event for two days and was astounded by the number of NACA workers and volunteers who had come in from across the country to take part. NACA even has historic agreements with Countrywide and other large lenders to restructure these loans quickly, if NACA does all the legwork. Still, it wasn’t enough.
Other lenders caught in the mess:
- Bank of America
Questions? Comments? RealtyCheck@cnbc.com