A motley crew of ACORN activists showed up at Wachovia Securities at Jefferson and Market in St. Louis on Tuesday to present Wachovia with the Turkey of the Year award. Near as I could tell, the Wachovia Securities division in St. Louis takes up six city blocks. But the activists, all … what? nine or ten? … of them were undaunted. Like ACORN people in various cities, they wanted to get the word out to the local press that Wachovia, as well as American General, Yale Mortgage and Morgan Stanley, have yet to take any action to halt the mortgage crisis.
When the activists, trailed by two security guards, approached a building to deliver a letter outlining their complaints and requests, they were met by an amiable woman representing the company. She took the letter and the award. But while it’s easy to present a civil PR face to what the corporation sees as a dozen or so powerless busybodies, what Wachovia plainly doesn’t get is that we’re all in this economy together. Barack Obama has called on mortgage companies to declare a ninety day moratorium on loan foreclosures. Wachovia has ignored that request, even as its “new corporate family [Wells Fargo] has received at least $50 billion in bailout cash and tax breaks.”
At least four million homeowners are a month or more behind in mortgage payments, so ACORN is asking Wachovia to follow the lead of other mortgage lenders–Citi, for one–who have declared a moratorium in order to use the time to modify mortgage payments down to terms affordable to the homeowners. Such action could be followed by government guarantees:
FDIC Chairman Sheila Bair has proposed using as little as $25 billion of the $700 billion bailout to guarantee up to half of the loss that may result from re-defaults after a modification. This insurance would help facilitate an estimated 2.2 million home loan modifications, which would have to reduce all housing costs down to 31% of a borrower’s monthly income to qualify.
ACORN also wants bankruptcy protections for principal residences to allow judicial modifications.
Congress must close the loophole that allows the wealthy to protect their vacation homes and yachts while leaving those who only own one home out in the cold. This simple change would help an estimated 600,000 homeowners keep their homes and avoid foreclosure through loan modifications to truly affordable terms.
When the reporter from KMOX asked the ACORN spokesman, Darryl Moore, if he knew anyone whose home had been foreclosed, Moore did describe the situations of two people he knew–but not in detail. The ACORN group that visited Yale Mortgage in Miami, though, came more than prepared to make their point:
In Miami, ACORN member Avery Salkey from Palm Beach, along with 25 other ACORN members from South Florida, presented the “Turkey of the Year” award to Yale Mortgage. They asked CEO Woody Kahn to meet with Salkey. Salkey, a customer of Yale Mortgage, was lied to by the company when signing her mortgage papers and now faces the sale of her home on Dec. 1.
“I wanted to ask him to call his attorneys to stop the sale, but he wouldn’t talk to me,” said Salkey.
When Salkey had first signed for her home loan with Yale Mortgage, she found that the payments listed were far more than they had previously discussed – in fact, they exceeded her monthly income.
“I told them I could not afford those payments. But then they said if I could make the higher payments for six months, they would be lowered after that. I knew I could swing it for six months, so I said OK. But when I brought this up to them after six months of making the payments, they laughed in my face and asked me where I had heard that.”
Salkey has been working with ACORN and ACORN Housing for a year, attempting to negotiate with her lender. But they told her they “don’t do loan modifications.” She has filed for bankruptcy. She has also tried to switch to a different loan servicing company, but Yale Mortgage would not release her payment history showing all of the on-time payments she had made.
On Nov. 14, Salkey got a notice that her house was scheduled to be sold at court Dec. 1. Later, she got a notice that her mortgage has been sold to another servicer – but the change is effective Dec. 1, later in the day than the scheduled court sale.
“I wanted to ask them to just put a stop to the sale so that I can start over with the new servicer, with a clean slate. But they do not respond to me or to others. It seems like this is something they have been getting away with for a long time.”
CEO Kahn, not surprisingly, refused to speak to her. She’s just one of those little people. The ones who don’t matter. The ones whose financial troubles could bring down this economy and the hotshots at Yale Mortgage with them. He doesn’t get that.
But that motley band of ACORN activists in St. Louis understands that sometimes compassion makes the best economic sense. Wachovia ignores them at its peril.