Housing Meltdown, Ground Zero

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The turnout was staggering: close to 45,000 desperate homeowners showed up during NACA's five-day stand at the Cow Palace for the chance to renegotiate their disastrous subprime mortgages or sky-high interest rates or interest-only payments. For them, this event beat any chance at a star-studded concert—and best of all, it was free.

Inside, homeowners received housing-related financial advice and met with NACA's counselors, a stoic crew, always with coffee or energy drinks in hand and clad in red and yellow T-shirts with STOP LOAN SHARKS and SHARKS BEWARE emblazoned on their backs.  Here, homeowners could have their income, taxes, and spending habits analyzed, and possibly walk away with a monthly mortgage payment that actually fit their situations.  With that payment figure in hand, homeowners could then meet with representatives from their mortgage companies in the same arena and try to hammer out new terms on more affordable mortgages.

The process would save many of them thousands of dollars, defuse an explosive mortgage, even avert foreclosure. To boost morale, NACA officials occasionally ushered chosen homeowners to a makeshift lectern where each offered a glowing testimonial over a PA system to the work taking place.  They spoke fervently of new fixed-interest loans and fought back tears, while thanking their counselors, friends, NACA, and—regularly—God.

"It's a beautiful thing," said Venus Roberts, a homeowner from Los Angeles who came away from the event with lower mortgage payments.  I caught up with her in the arena's parking lot as she was heading for the Amtrak station and a train home.  A small, floral-printed suitcase in tow, Roberts had arrived early Friday morning, waited all day long, and finally spent the night in a nearby hotel.  Back in line Saturday morning, she finally saw a counselor.  The wait, she assured me, couldn't have been more worth it.  In the sort of reverential tone normally reserved for the miraculous, she avowed, "NACA is spreading the news that help is here."

Not everyone was so inspired.  Near the tables behind which bank representatives were arrayed I spoke with Maria Hernandez of San Jose, who was fuming about her meeting with representatives from the bank Wachovia.  Hernandez, haggard and emotional, struggled for words.  "It was a… what's the word? A mockery. Yes, a complete mockery."  Wachovia, she insisted, had failed customers like her, letting desperate people wait in line for days only to send them home essentially empty-handed.  (No representatives of mortgage companies were made available for comment at the event.)

So impassioned was Hernandez that a small crowd of the frustrated and curious soon gathered around her.  Even Bruce Marks, NACA's pugnacious CEO, stopped to hear Hernandez. "All this information is related to us, then we get to Wachovia, and for what?" she asked indignantly.  "To just come back another day? Or have your kids in the van spend another night here?"

Most of the people I met at "Save the Dream," though, weren't either as elated as Roberts or as disgruntled as Hernandez; they were still in limbo, waiting in line, their futures hanging in the balance.  That line began in the parking lot and, once inside, filled huge sections of the arena's seats where thousands of bleary-eyed homeowners, some there for up to 36 hours, waited to see a counselor or to meet with Spanish-speaking advisers.  Those earlier in the process sat in yet another section of the cavernous arena before an initial orientation workshop, a sort of Home Economics 101 held in an adjoining annex. 

Some of the homeowners I interviewed that Saturday had already been in line for 10 or 12 hours on the previous day, and had returned before sunrise once again to take up their posts. Some had slept under blankets in their seats; others clutched rolled-up sleeping bags clearly meant for an expected camp-out that night.

As I waded through the main seating area around midday, Ed Kidwell, a burly, boisterous truck driver from Fontana, California, sporting a University of Southern California hat, stopped me.  Noting my camera and pad, he wrapped a big arm around my shoulder as if we were lifelong friends reuniting.  "I'm just waiting for some good news to take home to take the stress off my wife and kids," he explained.  Though dog-tired—he'd arrived in the wee morning hours—Kidwell assured me he'd do just about anything to get his mortgage fixed.  As proof he offered to sing me a mortgage-themed song in the style of soul singer Sam Cooke.  With a few thousand pairs of eyes trained on us, Kidwell promptly cleared his throat and belted out lyrics that featured some mix-and-match combination of the words "relief," "modification," "IndyMac," and "baby."

A man crooning about mortgage relief, retired couples camping in a parking lot for counseling appointments, 4,000 exhausted "fans" cheering announcements of 2% fixed interest rate loans as if they were so many slam dunks—after a day at "Save the Dream," you'd be forgiven for thinking that, when it came to working class and middle class Americans, the housing market and the American economy in general hadn't exactly improved since its implosion in the fall of 2008.  Surveying the organized chaos in the Cow Palace, you might also be forgiven for thinking that all the talk of "recovery" was little more than that—unless you happened to work for Goldman Sachs.  Indeed, the beleaguered faces of the desperate homeowners at "Save the Dream" brought to my mind a famous Dorothea Lange photo of a Depression-era bread line in San Francisco's Mission District, an image captured 75 years earlier just miles from where I stood.

If you happened to be at the Cow Palace that Saturday, the daily news about the very financial players who had fueled the subprime debacle and the global economic collapse returning to their risky, overleveraged ways could seem little short of surreal.  Here, after all, was a reasonable selection of what the media likes to call "Main Street" mired in debt, clinging to homes at the edge of foreclosure, struggling through a jobless "recovery."

A "recovery," that is, in which the true underemployment rate is 17.5%, average employee wages continue to drop, and the housing market is in shambles.  The 937,840 foreclosure filings from July to September of 2009 set yet another industry record.  So many people are returning to school that some community colleges have extended classes until 2 A.M. and are turning away hordes of new students.  No one—not a single person—I interviewed at "Save the Dream" agreed with Treasury Secretary Tim Geithner or Federal Reserve chairman Ben Bernanke that their country was on the economic rebound. 

Mary McCleese, an Oakland resident, who was, at least for the moment, keeping her home thanks to NACA's help, was typical.  "If you look around, you see how many people is out of work, number one, and you see how many people is in foreclosure or lost their homes or in default because they've lost their jobs," she said.  "That tells you right there what the economy is doing."