$1 billion subprime bailout of sorts
Foreclosures are on the rise as more and more homeowners find themselves unable to refinance, stuck with mortgages they can't afford. But now a nonprofit is teaming up with two major banks to offer thousands a second chance.
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SCOTT JAGOW: As I’m sure you’re aware, a growing number of Americans are losing their homes. Or they’re close to it. But a couple of big banks and a nonprofit group are stepping in with some help. Geoff Brumfiel reports from Washington.
GEOFF BRUMFIEL: When Marsha Blue bought her home in 2001, she was told that she could refinance her high-interest mortgage a few years later.
But the lender never came through. And soon, she was in trouble.
MARSHA BLUE: I was paying $1,300 a month, single parent . . .
A friend told her about the Neighborhood Assistance Corporation of America. For years, the nonprofit NACA has arranged financing for low-income borrowers.
BLUE: It saved my home.
Yesterday, the group announced a much wider effort to refinance subprime mortgages.
Citigroup and Bank of America have agreed to pony up a billion dollars for that purpose. NACA will broker the deals and counsel homeowners to ensure they stay on track.
CEO Bruce Marks:
BRUCE MARKS: And NACA is here to say that there is hope if you are about to lose your home.
The nonprofit group’s leaders are planning protests against the large financial companies they say are behind the crisis soon.
In Washington, I’m Geoff Brumfiel for Marketplace.