Homeowners in need of mortgage relief have a new team working on their behalf. The Neighborhood Assistance Corporation of America (NACA) offers foreclosure prevention counseling and loan modification negotiations to homeowners, free of charge.

Foreclosure prevention efforts have gotten meaner and tougher, and it looks like the tactic might be working. A non-profit group is hounding lenders for contractual agreements to modify mortgages. The plan has already created relief for thousands of distressed homeowners.

Unconventional tactics for unconventional results

You can call them the Neighborhood Assistance Corporation of America (NACA), but some financial industry CEOs might call them aggressive and even obnoxious. The NACA is on a mission to modify loans for distressed homeowners around the country. Thus far, that mission has centered on two tactics:

Strong-arming lenders into accepting contractual agreements to work with the NACA, whose representatives have shown up at CEOs' doors, camped on lawns, and published photos of uncooperative executives online. According to NACA.com, the organization feels justified in making the battle a personal one because "lenders have a personal and often devastating impact on the lives of the people who they refuse to provide affordable credit to or take advantage of through predatory loans and scams."

Reaching out to distressed homeowners via public events. The NACA is touring the country to find homeowners who need help. Events have been held in Washington, D.C. and Connecticut. In addition, an event in South Carolina attracted 25,000 homeowners; some of them received mortgage relief that same day.

Saving the dream

The NACA calls its foreclosure prevention road show the "Save the Dream" event. All homeowners are invited to attend, whether they are behind in their payments or not, and there's no charge for mortgage relief counseling.

Homeowners can expect NACA counselors to ask for paycheck stubs and tax returns. This information, along with data pertaining to the homeowner's other debt service requirements, is used to calculate an affordable, sustainable payment amount. The counselors then contact the lenders and attempt to reduce the interest rate to as low as 2 or 3 percent.

The drastic rate reduction eases the homeowner's burden by lowering the payment significantly. A 9 percent, 30-year mortgage of $100,000 carries a monthly payment of about $805. But if you lower that mortgage's interest rate to 2 percent, the payment drops to about $370.

In some cases, the NACA counselors have been able to negotiate interest rate and/or payment reductions immediately; in other cases, homeowners have to wait for a response from their lender. NACA's foreclosure prevention counselors have a relatively high success rate because the organization has already obtained binding contracts with many mortgage lenders.

The NACA is planning to take the Save the Dream event to California and Florida, two states that have been hit particularly hard by the housing crisis. Homeowners who need a mortgage relief bulldog on their side should visit NACA.com, or call 888-302-6222 for more information.

Published on April 16, 2009