New York City Sitting in the conference room at the ACORN national headquarters in New Orleans the top lawyers for Lehman Brothers snickered at Treasury Secretary Paulson’s announcement of the Project Lifeline. One simply said, “…it seems to be nothing but PR.” But, if this is public relations, Paulson and his banking buddies don’t seem to have a very good grasp of how to do this either. The six banks that teamed up with the Secretary for this charade were: Citigroup, Countrywide, Bank of America, Wells Fargo, J.P. Morgan Chase, and Washington Mutual.
How does Project Lifeline purport to help homeowners facing foreclosure? If a borrower is 90 days late on mortgage payments and then contacts the servicer or bank holding the loan, then they will be given a thirty (30) day period to try and modify the loan and stop foreclosure. That’s it; the whole deal! This is the lifeline.
In truth what the banks got from the Secretary was a public call to their “no contact” borrowers that they had been unable to reach after 3-months of delinquency by trying to lure them into contact with a 30-day freeze tease. From what we know about these banks, ACORN would be surprised if everyone one of them was not already giving 30 days or whatever it took to do the modifications and get back off the foreclosure track way before this pathetic press stunt.
Once again Treasury also seems to have concocted a “fix” that only deals with a finite number of borrowers even while these foreclosure problems confront millions of homeowners in difficult markets. No numbers were offered for how many loans the six banks think they have in the “no contact” 90 day delinquency pool, but trust me this is simply segmented marketing rather than a systemic solution.
We deal with enough of these institutions to know that most of them understand that it takes aggressive, full court outreach to find the “no contact” borrowers because they have lost belief in their servicer having a solution. ACORN works with several of these institutions on programs through our contact program and foreclosure fairs to deliver results here.
But, hey, we understand. This didn’t cost any of them anything. It was just more cynical public relations in the face of the person tragedies facing the homeowners.
And they wonder why the borrower doesn’t trust getting in touch with them to ask for help? Hello!