The Neighborhood Assistance Corporation of America is doing something that should have been done a long time ago.

Beginning Saturday, the nonprofit housing advocacy organization will be host to a free five-day “Save the Dream of Homeownership” event in Washington, where people can get immediate help restructuring their troubled mortgage loans.

Homeowners won’t have to wait weeks for a callback from their loan servicers. They won’t have to fret and fuss – and in some cases cuss – to get a mortgage servicing company to listen to their pleas to save their homes from foreclosure.

“We’ll be able to provide real solutions,” said Bruce Marks, NACA’s chief executive.

On-site counselors

More than 300 NACA counselors, certified by the Department of Housing and Urban Development, will be on site to provide same-day affordable mortgage restructurings that may include reduced interest rates or reduced loan balances.

Marks expects more than 5,000 homeowners to attend, some of whom may drive eight hours or more from Ohio, Massachusetts and other Eastern states. The event is only open to people who own and occupy their homes.

For those with troubled mortgages who can’t get to Washington, help is still available. Homeowners can call (888) 302-6222 during the event to speak to a housing counselor, although those sessions cannot provide an immediate restructuring solution. For more information about the event, visit www.naca.com.

To make the fast-track restructuring program work, NACA has gotten agreements with major mortgage loan servicers, including Citigroup and Countrywide (now owned by Bank of America).

Aggressive strategy

Here’s what makes this event unprecedented.

If loan servicers refuse to work out a restructuring, the organization is going to take the rejected homeowners to Capitol Hill and complain to their elected congressional representatives.

“Our frustration has been that some of these servicers have not done what we need them to do,” Marks said.

For months now, many financial institutions have claimed they are working hard to help homeowners stay in their homes. And yet the number of foreclosure filings keeps rising. Some reports have indicated that not enough people are being helped by the various mortgage workout plans endorsed by the Bush administration.

At this Save the Dream event, homeowners won’t be refinancing their loans, Marks said. They won’t be getting loan modifications that only temporarily fix their mortgage crisis. They won’t be offered any adjustable rate mortgages.

Instead, based on its own underwriting system, NACA will take homeowners through a series of four steps that includes a forensic-type examination of their budgets.

“We are going to be doing what should have been done on day one of when they got that mortgage,” Marks said.

Individual analysis

By documenting people’s net income and expenses, such as food and utilities, housing counselors will come up with an analysis of a participant’s current financial situation and figure out the long-term mortgage amount that homeowner can truly afford.

Homeowners have to bring in pay stubs, bank statements and other financial information. Their credit reports will also be pulled for free to check for other liabilities.

Once all their information is verified, NACA will present restructuring packages, which may include drastically reduced fixed-rate mortgages, to loan servicers. And in some cases it could result in a reduced loan amount. All the rates under their program are fixed for 30 years, Marks said.

Take the example of Melody Weathersby of Jackson, Miss., who was able to restructure her 14.625 percent loan with GMAC Homecomings to a 6.75 percent fixed rate. Additionally, she was able to cut her mortgage debt by $20,000. She’s saving $300 a month.

In the cases where the loan amount is actually reduced, servicers may agree to write off the amount or attach it to the balance owed. But the money owed would only be repayable if the homeowner sells the home for a profit or does a cash-out refinance.

As a condition of getting a restructured loan package, participants have to agree to operate under a bare bones budget.

But a meaningful fix to the current housing crisis requires pressure like this put on financial institutions – and everyone is going to have to make a sacrifice.