NACA Taxpayer Funding Exposed - 12 News Phoenix - Why they promote so much due to per person payments.
There is good and bad in this - first the details - Failures not NACA fault other than having too many customers.
The ongoing "You paid for it" series which exposed so many banks and their failure to help homeowners explored the NACA organization and Bruce Marks on Monday 5/23/11 10PM news.
Who pays homeowner assistance agencies? You do - is the intro of the report. Taxpayers paid about $500 million for counseling help since 2007.
"And critics say you are often paying for non performance."
They show case and show clips of the latest NACA "Save the Dream" at Phoenix convention center in February (at least their 3rd in Phoenix).
Couple is happy saying they will save about $700/month in payments after meeting with NACA.
(We know how few "solutions" at NACA events folks are so happy with never actually result in modifications).
12News points out the taxpayer meter starts running and how much NACA (or any agency) gets paid "even if the homeowner winds up losing their home."
$150 paid to NACA by Feds for level 1 intake including action plan and household budget.
$300 paid to NACA by Feds for level 2 - Send packet of documents (Hardship letter/Financial etc) to the lender.
Darren Duarte a NACA spokesman says, "We can get through 2000 people from point A to point B in a day."
So NACA could have earned $900,000 per day in Phoenix.
However, 12News says that NACA exceeded its limit of $3.5 million of Fed funding about a year ago. Since then NACA has been covering its costs from its home buyers program.
(Dave wonders why they still do so much promoting of each event? They must be getting more funding?)
Bruce Marks says, "Government should not pay for housing counseling unless it gets results." Also a homeowner and someone from Kato institute says the same.
Neighborworks America is an agency that tracks out comes but its based on self reporting from the housing agencies.
Their report to Congress last year showed:
18% Keep Homes
29% Loss Homes
53% Pending or Unknown.
AZ Republican Congressman Jeff Flake opposes the funding saying, "Many of our constituents found the counseling services of these programs to be ineffective. If government programs are ineffective or inefficient, they ought to be eliminated or reformed."
NeighborWorks person says agencies are helping many and earn their federal payments even for homes that are taken in foreclosure. "Whether the servicer decides to give a modification is beyond the control of the housing agency" (Dave notes and that of course is the entire problem the banks refuse to fairly administer HAMP because they make more money by foreclosing).
Melissa Blasius who has done this series for about two years concludes that studies show those that use housing agencies are more likely to get a modification that those that don't (no reference given).
BUT the agency should have passion to get modifications a track record of success and willing to do the hard work needed to convince the servicer to do a modification.
While NACA is used as an example the program is for all housing agencies. I assume apples to the HOPE hotline when they refer to an agency who first works up a budget and all the details (at least they use to and did in my case) before doing the joint calls to the servicer.
In my case the HOPE agency was very good and aggressive trying to get a straight answer from my bank with all the being referred around to others and the same problems we have when we work with the servicers direct.
The fact that agencies are paid as part of HAMP is good. The bad is no matter how much the agencies to help its the banks that lie, commit consumer fraud (as many lawsuits and the AG's show) and do everything possible to foreclose rather than modify - since that is how they make money and the taxpayer or the investor takes the large foreclosure loss upon sale of the home.