Facing the Mortgage Crisis

Recently the St. Louis Beacon reported on the results of the “Save the Dream Tour,” held by NACA (Neighborhood Assistance Corporation of America).  The four-day event, aimed at helping financially troubled homeowners, was in St. Louis July 31^st to August 3^rd at the Chaifetz Arena.  The Beacon spoke with Sherre Waggoner of Maplewood, who attended the event in hopes of saving her home from foreclosure.

Waggoner, 46, is a divorced, single mother and college student who lost her job in April. She said she had fallen behind on her bills and was having trouble staying current on her mortgage, though she had just found new employment. After a friend saw the NACA event mentioned on a local television newscast, Waggoner decided to give it a try.

Waggoner was one of the 40,000 people who NACA organizers say attended the four-day event in St. Louis, July 31-Aug. 3, at the Chaifetz Arena. NACA, a national nonprofit advocacy group based in Boston, rented the arena and brought in several hundred housing counselors. The organization’s promotional material promised “same-day solutions” for homeowners by restructuring mortgages that would be approved onsite by representatives of some of the nation’s largest lenders.

Waggoner said she spent five hours at the arena on Aug. 1 with thousands of other worried homeowners, but she left feeling both relieved and confident that her home would now be safe.

She met face-to-face with a NACA housing counselor who reviewed the financial documents she brought. She then met with a representative from her lender, Wells Fargo, who agreed to a restructuring of her loan. She said the terms were all spelled out: Her mortgage interest rate would be reduced to 4.375 percent from 6.375 percent — which would take about $220 off her $891 monthly payment.

In addition, Waggoner said, the Wells Fargo representative agreed to a six-month forbearance during which she would not have to make her monthly payments. Those payments would then be tacked onto the principal of the loan.

“I was initially pleased, very happy,” Waggoner said.

Though she was not given a written, signed agreement, Waggoner said she thought she had something nearly as good: a direct contact with her lender. The Wells Fargo representative even wrote her name and phone number — and the promised new interest rate — on the cover of the workbook Waggoner had been given by NACA.

“That gave me a lot of confidence — maybe more than I should have had,” Waggoner says now. “And when the monthly mortgage bill didn’t come the next month, that also gave me confidence.”

Since then, Waggoner said, she has received a letter from Wells Fargo that specifies different terms than what she agreed to on Aug. 1. The letter refers to a six-month moratorium on payments that will end in January, when a balloon payment of all missed payments will be due.

Waggoner said she tried to phone the Wells Fargo representative at the number scrawled on her workbook, but she has never been put through to her. Instead, she has been told by Wells Fargo that she will be contacted in a few months — at which time she can apply for a loan modification. She said the bank now says it has no record of the agreed-upon interest rate reduction.

Waggoner said she has also tried contacting NACA, but the identification number that she was given to track her file on the organization’s website does not work. She said she has left voice mails and sent emails to NACA, but she has not received a response from the organization. While she is thankful that she doesn’t have to make payments for six months, she said she is very worried about the possibility of having to make a large balloon payment in January.

And, she is concerned once more about the possibility of losing the house she purchased in 2002 with a $20,000 down-payment. Waggoner said she has considerable equity in the home — she owes less than half of its current assessed value — but she said lenders aren’t willing to discuss refinancing with her because of her poor credit score.

“I’m very angry and very scared,” Waggoner said Monday. “I’m angry at both the bank and the organization — Wells Fargo and NACA. Is the idea of ‘scam’ in my mind? Yes. And that’s a quick turnaround for me. But it was a very difficult 40-minute call I had with the bank — to see what I thought was a gift, of sorts, a break, just kind of disintegrate.”

The Beacon also interviewed Chris Krehmeyer, President and CEO of Beyond Housing and an active member of KETC’s Facing the Mortgage Crisis Advisory Committee.  According to Chris, his organization’s concern was that NACA may have overpromised when promoting their event.

“Our concern going in was their big, bold promises,” Krehmeyer said. “My sense is that I’m sure there are people who were helped, but you can’t promise the world to everybody and then not have a system in place that actually delivers what you’re promising.”

Krehmeyer said a handful of people contacted his agency after the NACA event.

“They came to us and said, ‘We tried to follow up with these folks, and no one is getting back to us. Nobody’s calling me back. What do I do?’ ” he said. “And we had a couple of people who had come to us — and we had some things in place — and they got convinced by the NACA people that they should go with them. And they undid our transactions.”

Krehmeyer said homeowners should follow through with NACA, just as they would any counseling agency they are working with, to make sure the process is on track.

He would advise homeowners who are worried about losing their homes to contact a local housing counseling agency.

“Every day you wait is a day lost in the negotiation in the loss-mitigation workout scenario with that lender or servicer,” he said. “There’s just no time to wait.”

To read the full article by Mary Delach Leonard, click here.  You can also read Part 2 of the article, published yesterday, by clicking here.

If you’re facing foreclosure or are having trouble making your house payments, it’s best to seek help from a local organization—that way, it’s easier to follow up with them.  There are many organizations in St. Louis that are committed to helping homeowners stay in their homes—they offer free, trusted help to people who are facing tough financial situations.  To find help, call United Way’s 2-1-1 Referral Service at 1-800-427-4626. 

Also, consider attending an event hosted by HOPE NOW November 4^th.  “Save Your Home” aims to help troubled homeowners stay in their homes.  Local HUD-approved housing counselors, as well as lenders, will be on-site to work with homeowners.  More information will be coming as the event approaches. 

Trusted local resources are available—don’t be afraid to seek help, and to seek it early.  Together, we’re facing the mortgage crisis.