I-Team: NACA Investigation

Since the housing bubble burst, nearly half-a-billion federal dollars have been spent trying to help homeowners avoid foreclosure and stay in their homes.

One of the most visible organizations involved in this effort is NACA, which stands for the Neighborhood Assistance Corporation of America and its “Save The Dream” tours.

” Welcome to NACA day three. Welcome everybody,” cries NACA President, Bruce Marks through a bullhorn.

Nationwide, hundreds of thousands of struggling homeowners pack convention halls because they are all facing the same problem: fighting foreclosure.

“We’re going to save your homes,” declares NACA’s leader.

NACA promotes free counseling services which it claims can help families keep their home.

At these events there are testimonials from grateful homeowners.

“They saved my home from foreclosure,” declares a teary-eyed woman.

But despite NACA’s claims, the CBS4 I-Team found angry customers all over the country, complaining that NACA didn’t  help them. Instead they claim, they were stuck in what some called, an endless cycle of paperwork.

“They promised that they would help me complete the application and get me on track for a mortgage modification,” says Stacy Schrager from Hollywood.

Schrager went to a NACA “Save The Dream” event last year after becoming disabled.

The single mom couldn’t keep up with her mortgage payments anymore.

Chief Consumer Investigative Reporter Al Sunshine asked Schrager, “Did NACA help you get a mortgage modification?”

“No,” replied Schrager.

Across the country, California resident John Heinen called NACA’s program “the big hustle.”

“It was just one frustration after another, one promise after another, and one disappointment after another,” Heinan explained from the patio of his Sacramento condo.

After dealing with more than 14 different NACA representatives, having his loan documents sent to the wrong servicer and waiting almost two years for NACA’s help to modify his mortgage, Heinen dumped NACA.

“I went directly to my loan servicer and they fixed it in like four days,” said Heinen.

As a Massachusetts based non-profit, NACA doesn’t charge struggling homeowners any fees for it’s counseling services. So where does NACA get it’s funding?

“Well you know the fact is,” said Bruce Marks, “there’s not one dollar of tax money here.”

But that’s not what federal records show.

Documents from the Department of Housing and Urban Development report that NACA got $2.3 million dollars from HUD between 2008-2009.

NACA also collected $38 million dollars through another congressionally funded program called NeighborworksAmerica, between 2008 through 2010.

NACA’s latest tax records show revenues jumped from $28-million in 2008 to $45 million in 2009, with assests in excess of $63-million dollars.

Stacy Schrager, who is now in the middle of foreclosure proceedings, wonders where all the money went?

“A lot of people are making money off of foreclosures and short sales,” she said.

A recent HUD audit covering the period October 2009 through June 2010 found NACA “generally administered its HUD grants in accordance with HUD requirements.”

But the I-Team discovered that the federal requirements for organizations such as NACA, don’t mandate the groups actually get a loan modification for distressed homeowners. All they are required to do, in order to obtain federal funding, is show proof the person was counseled.

The audit report showed that NACA claimed to have counseled about 44,000 homeowners, with more than 22,000 thousand mortgages modified.

Gary Malis of Hollywood was one of them.

“It was a fantastic experience,” said Malis. “I would have lost the house without a doubt, absolutely without a doubt. NACA is a blessing.”

Congressional critics of government-funded mortgage counseling programs say there’s just too little accountability on how the money is being spent.
“Unfortunately, all these government-run multi-billion dollar programs have been a total disaster,” said U.S. Representative Mario Diaz-Balart.

The South Florida Congressman said, “ask the people in Southwest Dade or Southwest Broward if the federal programs have helped them with their mortgages that are upside down.”

The I-Team has learned that HUD recently suspended its latest grant payments to NACA, although the group is still HUD approved mortgage counseling intermediary. Through its spokesman, Darren Duarte, NACA officials released this statement to CBS4:

“NACA is the largest HUD Certified Counseling organization in the country.  We do 30% of all the housing counseling in the United States.  We have helped more than a hundred thousand homeowners stay in their home at a lower payment.  Most save $500 a month and many are able to save $1000.00 a month.  We are a non-profit that helps homebuyers and homeowners. 

NACA has been very critical in the local and national press of HUD and the current administration for not providing real help for struggling homeowners in America.  As a result of that, HUD has held back funding.”

More from CBS4 Investigates
  • Lawrence Natinsky

    As an attorney doing this kind of work, I applaud the efforts of NACA, but I also know that they can’t represent someone who is on a dual track (pending foreclosure, and seeking a modification at the same time) or when FNMA requires a lender to do a pre-foreclosure mediation. There are so many ways that borrowers will be mislead, or denied, when they are entitled to relief. I find it hard enough myself, as an attorney, to deal with all the misrepresentations and outright lies my clients are told by lenders, so I can’t see how some company with processors with essentially no legal training (the latest version of the HAMP handbook alone has about 170 pages of “guidelines, not to mention the separate rules for FHA, FNMA, or Freddie Mac) can really understand when someone is getting a bad deal, or could be getting a better deal if their application were submitted in a more creative and lawful way. Lawyers, in general, are trained to be creative (within the rules) and they will generally provide more current information, and know how to structure an application when they submit a request for a modification, giving homeowners a better opportunity to qualify, and to obtain the best payment plan available. As one of the people interviewed said, they were shuffled around to many different representatives from NACA, and just like the people I deal with when contacting lenders, some know what they are doing, but many are merely paper pushers, without a clear understanding of what it takes to get the job done properly. It’s another sad day when someone like NACA loses it’s funding, because people need all the help they can get. We are in a crises in Florida (and thoughout the country), and it’s very disappointing to learn that even NACA cannot be trusted to tell the truth.

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