How can NACA legally not disclose their fees in the loan modifications they do?
NACA ads on the web emphasize the 2% interest rate – but never quite get around to the nitty-gritty details of the entire loan modification. This lack of specific details about a borrower’s situation, and the heavy “rah-rah” feel, made some of us wary from the first time we heard of them.
Now various contacts that have interacted personally with NACA have shared their experiences. Most have said NACA didn’t work for them. Some have said they got a loan modification and now need another one. None of those denied a loan modification could tell exactly why they were denied. NACA claims their success rate is 80%, and that those denied know why and that if they don’t, they either didn’t understand, didn’t pay attention, or are simply lying about it. NACA did not state these denials were in writing. Would love to see a denial in writing if they exist. If denials in writing don’t exist, I believe that is another violation.
Being summarily denied a loan modification in one day, indicates the very selective process of the loans. In other words, it seems to that NACA already knows what loans can be modified and how, and the other loans they can’t help are summarily rejected. NACA did not deny they know what a particular servicer will modify and the terms. So the question is, if that’s really the case, then why all the hoopla? Why doesn’t NACA just send out a letter to the correct borrowers, save a lot of travel time for everyone, and those not contacted will know they cannot be helped by NACA. What is the point of the event?
Besides not getting a loan modification, people mainly have complained about is the fact they took time off work, drove a long ways, were made to wait around all day, then dumped. NACA responds that one day is nothing compared to being jerked around by servicers for months. But again, if NACA already knows the modification options and servicers, then why bother with the event, or at least why not state up front that NACA can only modify loans from particular servicers? Why knowingly waste people’s time that won’t qualify?
One contact shared her NACA disclosures with me which are attached at the top of this page. Please review these and note the highlighted portions. Please clearly understand that NACA already has in place agreements with various Servicers, and while NACA is modifying your loan as an independent contractor of the Servicer, NACA can be compensated in ways that might motivate NACA to work against your best interests. Please understand NACA gets paid by the Servicer for their work, so NACA’s fees are included in your modified loan terms. We have not ever seen any disclosure of NACA’s fees, but have now requested their full fee schedule. I believe full disclosure of these fees is or should be required by state law.
The way that NACA gets paid could actually be detrimental to you – in other words, what would be best for you may not be best for them, so they might do what’s best for them instead of what’s best for you. Since NACA seemingly does not disclose NACA compensation to you in your loan modification, you have no way of knowing what NACA charges, nor if the modification is really the best you could have gotten, nor how much your principal was increased to cover these fees. NACA claims they are paid when the loan is modified and the owner completes the trial program, which is standard industry practice and required by state law so no surprise there. It is still an open question of the compensation and types of compensation NACA receives which has not yet been disclosed.