With their loan papers and other personal documents in tow, hundreds of distressed homeowners converged at the Sacramento Convention Center on Thursday, a grim reminder of a housing crisis now in its fifth year.
Through Saturday, Bank of America Corp. is holding a customer outreach event for more than 1,200 struggling borrowers who are seeking to protect their homes from foreclosure. According to the bank, about a third of the people who attend these events are able to obtain a loan modification deal that will significantly lower their mortgage payments.
"The major objective of this outreach program is to provide folks on site to talk to customers on a one-on-one basis," said Eddie Martin, senior vice president and national events manager for BofA. "We're here to address their individual needs."
The free event is one of about 50 the bank will hold around the country this year. BofA, the nation's largest lender, sent out solicitations to more than 22,500 of its financially strapped borrowers who live within a 100-mile radius of Sacramento. Many of those borrowers are 60 days behind on their loans, and many have filed for loan modifications that weren't approved because of problems with documentation.
Early on in the downturn, a big chunk of those facing foreclosure or seeking loan modifications were homeowners who got into exotic subprime loans whose mortgage payments later ballooned.
But a large number of those who showed up Thursday had suffered economic hardships such as the loss of a job, a pay cut or mounting medical bills that made it difficult for them to cover their mortgages, underscoring the changing face of Sacramento's foreclosure crisis.
Thursday's event included one-on-one sessions with BofA loan counselors, personal finance workshops by certified credit counselors with the Urban League and Clearpoint Financial Solutions, and meetings with loan underwriters, who could make on-the-spot decisions on loan modification requests.
Consumer advocate Kevin Stein of the California Reinvestment Coalition called it a good faith effort by the bank to help address a crisis that has resulted in the loss of more than 70,000 homes in the Sacramento area since 2006.
But Stein questioned whether the bank is going far enough.
Since July 2010, BofA's mortgage servicing arm has filed more than 8,200 foreclosure notices in the four-county Sacramento region, making it the largest issuer of foreclosure notices in the area, according to figures compiled by San Diego-based DataQuick.
The amount is roughly twice that filed by Quality Loan Service Corp., the next biggest issuer of local foreclosure notices.
"Some people may be getting their loans modified, but the bigger picture is that banks are not doing enough to keep people in their homes," said Stein.
BofA's Martin said the whole point of the program is to get customers involved early on so that they don't wind up in the foreclosure process. He added that since 2008, BofA has helped more than 960,000 homeowners get loan modifications.
Albert Garcia flew from Long Beach to attend Thursday's event, and waited more than eight hours to hear whether his loan modification would be approved.
Garcia, 29, said he attended similar events in Los Angeles and Riverside where he received preliminary approval on his request to lower the monthly payment on his three-bedroom home from $3,900 a month to $2,400. But in both instances, he said, the bank later rejected the loan modification because of missing documents, forcing him to reapply.
"That's why I'm here a third time," said Garcia, whose wife lost her job more than a year ago. "It's absolutely frustrating."
Suisun City resident Tyra Barnum had a more upbeat outcome.
Barnum, 48, who is an account manager for a cellular provider, said she took a sharp pay cut last year, which only recently was restored. She said her mother, who had been living with her and helping with the mortgage, died in December, leaving her to make all the payments.
Barnum said she owed the bank about $15,000 in past-due payments, which the bank agreed to fold into her existing loan. The restructuring added about $100 a month to her $1,800-a-month mortgage payment.
"I'm so excited," she said. "I'm so happy."
Cheryl Gilliland is also optimistic about her prospects for a loan modification.
The Roseville resident said she lost her job operating a florist shop at the Sam's Club outlet in Pleasant Grove last year. Since then, she's mostly worked retail jobs that paid much less.
Gilliland said she is several months behind on the mortgage on her two-bedroom home, on which she pays about $1,000 a month. She said she has applied for loan modifications in the past, but talked to a string of bank employees who ultimately got her nowhere.
She said Thursday's event was reassuring, because she was able to speak with a single person who could guide her through the step-by-step process of applying for a loan modification.
"They made me feel there was hope and there is a light at the end of the tunnel and my problem was going to be resolved," she said. "That's what I needed."