Activist financier fights US mortgage crisis

MIAMI: He calls them "Save the Dream" events, but activist financier Bruce Marks is squarely focused on an American nightmare.

For nearly two years now Marks, a 54-year-old former regulator at the US Federal Reserve Bank of New York, has been holding massive mortgage modification gatherings across the country.

His non-profit Neighborhood Assistance Corporation of America (NACA) hosts the five-day events, offering help for families saddled with mortgages they cannot afford by bringing them together with lenders and facilitators willing to work out easier payment terms.

One such "Save the Dream" event wrapped up on Monday (April 19) at the cavernous Miami Beach Convention Center and NACA spokesman Darren Duarte said new loan agreements were hammered out for over 11,500 of the more 45,000 people who attended.

The Miami event, held in an epicentre of the US property market meltdown, was the biggest the group has sponsored so far.

Rather than touting its success, Marks said the event highlighted the fact that America's mortgage foreclosure crisis is getting worse more than three years after it helped trigger a global recession.

"This is the last resort for people coming here," Marks told Reuters in an interview.

"It's like a war zone," he said, noting that some desperate homeowners had camped outside the convention centre or bedded down in the hallways to ensure they would have a chance of getting some relief with their monthly mortgage payments.

Some like Isabel Falcon, a Brazilian-born Miami homeowner who said NACA slashed her monthly mortgage payment from US$3,500 (RM11,170) to US$869, walked away elated. "They saved my life," she said.

But Marks, clad in black with a shirt emblazoned with the message "Predators Beware", was in no mood for happy talk.

"It's not changing. It's not getting better," said Marks, who blames much of the US housing meltdown on banks that offered loans that were unsustainable.

Marks is a proponent of what he calls "non-violent bank terrorism", which is how he describes his outspoken activism against inflexible banks. He is no fan of Wall Street or bankers who have profited on the backs of homeowners, he said. "Everybody despises them and should despise them."

After staging protests outside banks' offices and shareholders meetings, and even outside the gated communities where some bank CEOs live, Marks has persuaded bank executives to work with NACA to provide fair loans to people of low and moderate income

He said NACA now has legally binding agreements with every major loan servicer in the country, along with mortgage finance giants Fannie Mae and Freddie Mac, and is able to cover 90% of the mortgages in the country.

But given the scope of the mortgage crisis -- with one in eight mortgages already in foreclosure or default last year -- NACA has been unable to make more than a relatively small dent in the nation's huge pile of bad debt.

Marks faults President Barack Obama and the Treasury Department's Home Affordable Modification Program for failing to do more to stem the tide of foreclosures. He said they have done far too little to put pressure on big banks to restructure loans and come up with more favourable lending terms.

Because of that failure, he expects so-called "strategic defaults", -- in which borrowers choose to default on their mortgages whether or not they have the ability to continue making payments -- to become more common in the near future.

That could add to the continuing decline in home prices in markets like south Florida, as it adds to a housing inventory already filled to overflowing with foreclosed homes.

"It's pretty devastating when that happens and people start walking," said Marks.

"'Here, take the keys. I'm out of there'," he added, referring to the attitude of a growing number of "underwater" borrowers who owe much more on their mortgages than their homes are worth and are simply walking away.

"That's what's happening. That's what you see out there. And that could be the way to go," said Marks. "We're getting close to the point where that's the rule." -- Reuters