1,000 Residents to get Mortgage Assistance

Two major banks announce assistance for underwater Prince William County homeowners at a VOICE event.

Bank of America and JP Morgan Chase executives announced Sunday night that almost 1,000 Prince William County, Manassas and Manassas Park homeowners will qualify for help through the $26 billion National Mortgage Settlement.

The announcement came during a packed rally organized by the interfaith group Virginians Organized for Interfaith Community Engagement (VOICE) at First Baptist Church in Manassas.

Five banks, including Bank of America and JP Morgan Chase, and the attorneys general of 49 states agreed on the $26 billion settlement in February related to charges of negligent foreclosure practices.

Today, residents heard what that settlement means for their own homes and the community.

As part of the national settlement, Andrew D. Plepler, Bank of America consumer policy and global corporate social responsibility executive, said at the event that 435 Prince William County homeowners will be eligible for principal reductions in their mortgages worth $90,000 each. Another 234 homeowners will be eligible to refinance to lower payments on average of $300 less per month.

Rebecca S. Mairone, JP Morgan Chase managing director and home lending executive, said that JP Morgan Chase will pay for 165 Prince William County residents to get the same amount of principal reduction and another 100 homeowners will get to refinance their mortgages for an average of $300 less per month.

GE Capital, which was the last of the three lenders to come to the bargaining table with VOICE, is not part of the national settlement. However, GE Capital had the worst performance of the three lenders in Prince William County under WMC Mortgage. GE Capital did not make any financial commitment to VOICE, but did promise to bring the right decision makers to the table to negotiate, McMillan said. "Our negotiations are further along with Bank of America and JP Morgan Chase," he said.

Rev. Nancy McDonald-Ladd, minister at Bull Run Unitarian Universalists in Manassas, said VOICE is not asking for a handout. She wants the banks to streamline the loan modification process with reasonable changes to help families remain in their homes. VOICE found that lenders took up to two years to respond to loan modification applications. VOICE found that in some instances, the applications would get approved in one department, but another department would still move forward on the foreclosure process.

"There is an enormous amount of work left to do," she said Sunday night after the event. "But the National Mortgage Settlement is just a fraction of the families impacted by the foreclosure crisis."

The other great victory, McDonald-Ladd said, is that both Bank of America and JP Morgan Chase committed to conclude negotiations with VOICE on the $300-million to $500-million reinvestment package by October 2012.

"So, we have got a deadline for real rebuilding of home ownership, refinancing of underwater mortgages and creating of affordable housing in Prince William," she said. "All three banks are taking the numbers seriously."

Almost 50 percent of Prince William County families are underwater on their mortgage, which is 26th in the country, said VOICE spokesman Frank McMillan. Prince William County also has the highest number of foreclosures in Virginia, with more than 16,000 since the financial crisis started. VOICE is an interfaith coalition of more than 40 churches in Northern Virginia. From 2004 to 2009, more than 10 percent of Prince William County households went into foreclosure; Manassas and Manassas Park were closer to 15 percent.

Kathy Clark, retired teacher from West Gate Elementary School, saw how predatory lending practices devastated the West Gate and Irongate communities. VOICE found that 39 of 41 GE-backed mortgages (through WMC Mortgage) failed in Irongate, mostly a working-class neighborhood with a large Hispanic and black population. She started to see vacant houses, signs on the doors, families leaving their belongings strewn on the curbs, broken windows and graffiti.

"It was hard to watch, and then you hear what those loans really looked like. They were told they can have the American dream. They were told, 'Oh, you can afford this,' and they said, 'Trust me.'"

According to The Washington Post, Wasiu Adedeji told the crowd that he had a mortgage with WMC that qualified him for a $425,000 loan when he only made $35,000 a year. He ended up taking a loan that had an 8-percent interest rate but could be as high as 14 percent. His monthly mortgage was too much to handle and he took classes to become a real estate agent so he could short sell his own home. Adedeji said although he was suspicious of the mortgage, he felt the lender took advantage of him. WMC has since been shutdown and did not service the mortgages it sold, the Washington Post reported.

Rev. Clyde Ellis of in Woodbridge, said he has been a part of the negotiations with the lenders from the beginning.

"So, I felt very good that we were able to come back and report progress today and commitment that gives hope to people that we are moving toward something that will benefit the whole community," he said after the event.

He said VOICE should have more positive news in October, but the group will put a focus on GE Capital, too.

"I think we are going to be in pretty good shape," he said. "We are going to meet this month."

For more information on housing counseling assistance or the settlement, contact VOICE.

VOICE $300-$500 Million Reinvestment Proposal:

  • $150--$250 Million loan modification/principal write down for Prince William County families that are underwater, facing foreclosure, and/or have predatory loan terms, helping at least 3,000-5,000 county homeowners.
  • $75--$125 Million in new mortgage loans at below market rates with flexible underwriting standards, down payment assistance and housing counseling for low wealth, minority and immigrant borrowers victimized by predatory loans.  This could help 1,500-2,500 families become homeowners again in Prince William.
  • $75--$125 Million in below market rate loans and investments to build/preserve 1,000-2,000 affordable rental units for working families and the homeless.
Nick Whitten June 04, 2012 at 03:10 PM
Why did these people purchase homes they couldn't afford? Where is the personal responsibility in all this? If you get into a loan with variable rates, or a payment that pushes past your debt to income ratio THIS CRISIS IS YOUR FAULT! Move into a smaller place you can afford.
sneaky neekie June 04, 2012 at 03:24 PM
Is there any help for BAC mortgagees who are CURRENT on their loans, but have no equity, because they are upside down?
Sharon Danner June 05, 2012 at 03:09 AM
Minorities and first time home buyers were targeted for fraudulent loans. Their real estate brokers assured them that they qualified and could afford loans that they did not understand. Often there was a language issue. If you have ever bought a home you must know that the legaleze and the mounds of paper create a difficult climate for even the most proficient English speaker. Yes, there is fault on both sides but the fraud was perpetrated by the lending institutions. Also many foreclosures came not because the homes were too expensive but because the owner's income changed.
Anthony June 05, 2012 at 04:12 PM
No, it was all Americans that where targeted by lenders who did stated income stated asset loans (which made up 60% of all loans at the end of 2007) which allowed individuals to borrow against current residents and buy new home that they wouldn't have qualified for under normal underwriting guidelines... now we verify everything... just hope it not to little or to last...
Nick Whitten June 07, 2012 at 12:07 PM
Sharon again, personal responsibility...you lay it all out there and then put a giant "but" on the end, negating all the facts you so perfectly stated. There is no but, and no surprise its minorities that make up the majority of those getting this "bale out". No matter how you slice it it boils down to, "oh wait, because I had no idea what I was getting into now I can't afford my home, oh well someone else can pay." This is why our country is nearly flat lined...no more bale outs.


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