Atlanta In the foreclosure meltdown being experienced by borrowers all over the country who were fortunate enough to get subprime loans, but did so often based on spurious stories from brokers are now facing a resetting of their interest rates that will make the loans unaffordable and therefore possible foreclosure, ACORN has worked with the servicers and lenders to try and forestall these problems. Sometimes you just can not seem to get these outfits to understand the borrower’s problems or even their own self-interest, and that leads to a world of hurt. Carrington Mortgage Services based in Los Angeles County is a perfect example of a company that has decided to be wrong, rather than fair.
It all starts with New Century, yesterday’s darling, and now the prime example of excess in the subprime market, and a bankrupted outfit that was based in Orange County. Faithful readers will recall the number of times we met with everyone at that company trying to get them to do right, but to no avail. New Century was hooked up with Carrington. They had made investments in all sides of the operation and at the end of the day they sold their outstanding loans to Carrington to service, which means to collect the payments. ACORN researchers at the ACORN Financial Justice Center at different times wondered if Carrington was no more than an alter ego of New Century, but could never prove it.
New Century’s book of loans was almost half “stated income” which meant that there were a world of abuses there, because essentially they had allowed brokers to originate loans and in way too many cases, just make it up as they went along, assuming that the loans would refinance before going under. There was never a question in our negotiations with New Century that they had lost control of their broker network and were in big trouble. Now all of this garbage is in Carrington’s front yard, and they are trying to pretend that they can muscle up and pretend there is no smell.
After working with them on a bushel full of cases, ACORN members in frustration did some straight up actions on company offices in Bridgeport, Connecticut and Huntington Beach, California. The one in California played on national television news. Did the company learn anything? No, it seems or at least not yet.
Reports yesterday indicate that rather than work out a problem for an ACORN person in Houston they are simply pressing foreclosure. The Chicago workout center being managed by ACORN Housing reports nothing but problems on all Carrington cases now, as they try to send us a message that they want to play hardball.
Looks like for all of our efforts to negotiate and work with these companies both big and small, some of them are just never going to learn without feeling the full force of the fury of the public and the scorn of the marketplace for their wheeling and dealing and hard hearted, tight fisted ways and means.
An ACORN delegation met with the Mortgage Bankers Association this week in Washington to over an olive branch if there were good faith and progress on best practices, because we want to be able to move tens of thousands of families away from the brink of foreclosure. They seemed to be getting in finally, but it seems like the bottom feeders in the industry are going to take some more swift kicks from ACORN in order to understand that reality is coming and it will not be pretty.