The Neighborhood Assistance Corporation of America (NACA) brings its traveling mortgage modification road show back to Los Angeles this week. Called the “Save the Dream Tour,” NACA once again opened it’s doors to southern California homeowners today at the L.A Sports Arena. The event is scheduled to run through January 30.
NACA, a non-profit organization, works with homeowners to help negotiate with their banks to modify troubled mortgages, reduce monthly payments and avoid foreclosures. The last time the Save the Dream Tour visited Los Angeles last October, it ran for five days and saw tens of thousands of homeowners line up for a chance to renegotiate their loans. And though the wait was long and the paperwork tedious, several homeowners left the event thrilled with their results.
However, people attending the NACA event should bring plenty of caution along with their paperwork. Though NACA’s services are free to the public, it earns $500 from the lender for each modification it facilitates, making it a volume business. Which means people attending a NACA event can end up feeling like cattle being herded through the process.
The October event, which was held at the Los Angeles Convention Center, was a blessing for some but a painful lesson in bureaucracy for others.
Once called, the homeowner speaks by telephone to a NACA advisor who is often located in another city. After reviewing the homeowner’s documentation and doing some calculations, the NACA rep decides whether the homeowner is ready to meet with someone from his lender, or whether he’ll have to go home to gather more data to submit. NACA cautions homeowners who attend its events that most loan problems are not solved on the spot.
Though the wait was long and the paperwork tedious, many homeowners left the October event thrilled with the results, some reducing their mortgage principle by tens of thousands of dollars and shaving hundreds off their monthly payments. Yet for others who had camped out in the Convention Center overnight to wait their turn, the event turned out to be a bitter disappointment. Though many had spent days in the Convention Center, catnapping in metal chairs overnight so as not to miss their turn, when the doors finally closed at the end of day five, hundreds left having never gotten the opportunity to speak to anyone from their lender institution.
Beyond that, there can be surprises and frustrations with the bureaucratic NACA process.
Some clients who submit modification packets can end up waiting six months or longer for their modification to be processed, and some have lost their houses to foreclosure in the interim.
And NACA failed to inform some clients that once their paperwork is submitted, NACA will automatically authorize the lender create an escrow account to pay the homeowner’s property taxes. This happens whether the homeowner receives a loan modification or not. So even if you discover that you do not meet the eligibility requirements for a loan modification or can’t provide the necessary documentation, you may still be hit with additional mortgage escrow fees that can push your monthly payments hundreds or even thousands of dollars higher.
For the homeowner struggling to stave off foreclosure, such a scenario can cost them their house. But NACA initiates these escrow accounts with impunity.
And once in the complex NACA program, getting information or finding help can be difficult. NACA is notorious for not answering phone calls or otherwise frustrating clients who are left in limbo while their modification application inches along.
A quick Google search of the keywords “naca scam” will turn up thousands of horror stories about NACA clients who found the NACA process to be a frustrating nightmare. Some have been frustrated by the lengthy process, while others have been granted a modifications only to later learn that it was only temporary or that it created unforeseen problems with their loan or pending foreclosure.
Should you decide to attend the event, make sure to bring the following documents for the last several months:
- Mortgage statements
- Bank statements
- Pay stubs
- Tax returns
- A Profit and Loss statement (if you are self-employed)
- A copy of your deed
- Any other documentation pertaining to your assets and loan
And be aware that individuals not associated with NACA may be seeking to promote their own home modification services near the site. Los Angeles Neighborhood Housing Services advises homeowners to be wary of vendors who ask you to pay for loan modification help. Many are scams, and only your lender can legally grant you a loan modification.