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| ACORN protesters seen outside Washington Mutual national headquarters. |
About 30 ACORN protesters gathered in the Washington Mutual national headquarters downtown May 8 to promote awareness of the bank’s foreclosures and use of subprime loans.
ACORN is requesting that WaMu suspend current foreclosures for six months, convert subprime loans to affordable, fixed-rate loans, and buy out or refinance securitized loans. The company should accept responsibility as an industry leader, says Washington ACORN president John Jones. The protest was a national ACORN event with demonstrations in 21 cities across the U.S.
Reza Aghamirzadeh, senior vice president of external affairs, says WaMu has worked with ACORN on the foreclosures hotline and has contributed to the HOPE NOW Alliance, an organization that assists borrowers and prevents foreclosures.
Protesters and WaMu representatives circled around Jones and Aghamirzadeh in the lobby of the WaMu headquarters as they debated the logistics of the protest. Jones introduced Julio Santos to the conversation, who began telling his story about what he called WaMu’s inept loan negotiations.
For Santos, it began about a year ago when he contacted WaMu to refinance loans from another broker.
“He told me not to worry about my next payment,” said Santos. After two months of missing payments, the loan with WaMu still hadn’t closed. Santos said he had trouble getting ahold of his WaMu broker.
“They were giving us the runaround,” said Santos. “They wouldn’t give us a yes or no.”
As his bills began stacking up, Santos had no other choice but to sign the loan with a high, 10.9 percent interest rate. Santos says his income is not inadequate, but he just couldn’t afford to spend 70 percent of it a month on loans.
“People want to own homes so bad, they don’t know what they’re signing,” said Jones.
Aghamirzadeh suggested that the dialogue with ACORN move to an upstairs office to discuss foreclosures and WaMu practices.
Jones said WaMu is trying to bribe and lie to the ACORN protesters. “Talking to 25 people will not solve the problem,” he said.
Santos discussed his options with WaMu representatives, but he had already started paperwork with ACORN counselors.
The protest was moved outside, and several other ACORN individuals met with WaMu staff to negotiate foreclosure terms.
Jones himself says he spent about two and a half years negotiating those terms with WaMu — unsuccessfully, he said. “Coming to the table with a low-ball figure is not coming to the table at all,” he said.
The biggest problem with foreclosures, says Aghamirzadeh, is that customers do not contact the bank once payments desist. He says the sooner the bank can address the problem, the better. WaMu’s toolbox for preventing foreclosures includes lowering interest rates or extending the length of a loan.
WaMu lost $1.14 billion in loans during the first quarter of 2008. Last July, WaMu discontinued offering subprime loans, which have fixed, “teaser” interest rates that increase after several years and are the cause of many foreclosures. Three months later, the Seattle office laid off 1,000 people whose jobs related to subprime loans.
The City Council has attempted to regulate sub-prime loans, said Councilman Richard McIver, chair of the housing committee, but the state overrode the restrictions. He said $210,000 of the council’s budget has been reserved for loans or grants to people with homes about to be foreclosed or with delinquent mortgage payments. The loans will provide $5,000 to people earning below 80 percent of the median income.
“We’re trying to get people to do the right thing,” said Jones.
“Hopefully, it’ll all turn out good,” said Santos, who still has bills to pay and bad equity to boot. |
