Like the more infamous ACORN, the Neighborhood Assistance Corp. of America is another leftist group waging war on free enterprise while filling its own coffers by using shakedown tactics. NACA variously accuses banks of engaging in predatory subprime lending or ignoring the needs of low-income communities. And the group likes to get nasty. A profile of the group in today’s Wall Street Journal notes that the group
… salts its Web site with photos of executives it accuses of standing in the way of helping homeowners – emblazoning “Predator” across their photos, picturing their homes and sometimes including home phone numbers. In February, NACA, as it’s called, protested at the home of a mortgage investor by scattering furniture on his lawn, to give him a taste of what it feels like to be evicted.
In the 1990s, [the group’s founder and CEO] Mr. [Bruce] Marks leaked details of a banker’s divorce to the press and organized a protest at the school of another banker’s child. He says he would use such tactics again. “We have to terrorize these bankers,” Mr. Marks says.
Taxpayers should note that they are helping fund this group. The Journal reports:
The organization has been allocated $34.5 million from a new federal program to counsel distressed mortgage borrowers, to be paid to groups such as NACA little by little as they provide counseling. NACA’s slice is nearly 10% of the program’s funds …
The idea of taxpayers funding Leftist street theater and harassment is nothing if not infuriating. But perhaps an even bigger reason for concern is this group’s contribution to the lowering of lending standards that led to the implosion of the mortgage industry. David Hogberg describes the group’s methods as a “peculiar and successful formula: Help responsible borrowers get bank loans and then attack the banks until they also agree to make loans to irresponsible borrowers.”
NACA extracts concessions from banks and uses the proceeds to fund its own mortgage program. But, according to Hogberg, author of recent report on NACA for Organization Trends, the group rigorously screens applicants to its own mortgage program. Hogberg writes:
In a 2001 San Antonio Express-News article, NACA regional director Pam Brooks acknowledged that only about one in four persons completed NACA’s mortgage program after signing up for it. A National Mortgage News article from 1998 noted that while NACA had bank commitments of $1.3 billion over a four-year period the banks had made only $250 million for mortgages to NACA qualified borrowers.
Apparently, NACA does train previously high-risk borrowers who are ready to become financially responsible. After all, what type of person would be willing to wait up to a year for a loan approval, accumulate several months of savings, repay delinquent loans, and participate in NACA’s program of political activism? By weeding out irresponsible borrowers, NACA can claim that its “track record of helping people who have credit problems become homeowners or refinance out of a predatory loan debunks the myth that high rates and fees are necessary to compensate for their ‘credit risk.’”
The irony is that NACA should be commended for its systematic and exacting efforts to help low-income people become homeowners. But Bruce Marks’s responsibility toward the poor is more than matched by his irresponsible attacks on banks. He stalks and demonizes and harasses bank officials into making mortgage loans to the sorts of negligent low-income people he would throw out of his own program.
It’s time for banks and other corporations to stop selling the rope that gets them hung by agitation groups like NACA. The free enterprise system is at stake.
