A couple weeks back, ACORN CEO, Bertha Lewis, held a conference call with the Conference of Mayors. The call discussed strategies for preventing the growing tide of foreclosures in America's cities. On the call was St. Louis Mayor Francis Slay. In fact, the city of St. Louis had already begun an alliance with ACORN in the area of foreclosure prevention.
How is the City combating foreclosures?
In mid-2008, the City of St. Louis convened the Homeownership Preservation Alliance for the City with the Catholic Commission on Housing, ACORN, Beyond Housing, and Better Family Life. We funded the partnership with $500,000. While the Alliance provides counseling for families in danger of foreclosure, the city’s funds also provide direct financial assistance up to $1,500 per family.
We are using the Neighborhood Stabilization Program funding we received from HUD to acquire key properties in neighborhoods most affected by foreclosures and subprime mortgages.
So, what is the Neighborhood Stabilization Program? According to the HUD website, it's part of President Obama's stimulus bill.
The HUD Neighborhood Stabilization Program is intended to provide emergency assistance to state and local governments to acquire and redevelop foreclosed properties that might otherwise become sources of abandonment and blight within their communities. The Neighborhood Stabilization Program (NSP) provides grants to purchase foreclosed or abandoned homes and to rehabilitate, resell, or redevelop these homes in order to stabilize neighborhoods and stem the decline of house values of neighboring homes. The program is authorized under Title III of the Housing and Economic Recovery Act of 2008 (HERA) (pdf).
So, with this program, HUD earmarks money for foreclosure prevention. Then, that money filters to the cities. Then, each individual city uses that money for various foreclosure prevention programs. In this case, St. Louis was earmarked with $500,000. Then, the city used that money to provide grants to various charities and other homeowner services groups including ACORN. ACORN received $100,000 from the city.
With this money, ACORN would then negotiate loan modifications for distressed borrowers with their banks. Here's the problem. According to city spokesperson, Heather Dunsford, ACORN has worked with 59 borrowers, and of those 35 were referred to other agencies. For this, ACORN agreed to charge the city $750 per borrower. 24 borrowers, at $750 per borrower, is only $18,000. So, where is the rest of the money?
That's what Gwen Cogshell, former St. Louis board member of ACORN, wanted to know and so she organized a press conference in St. Louis this past Wednesday. It's a press conference that you will likely hear nothing about. No local media covered the press conference. Fox News sent out a news crew but that was for a documentary due later about ACORN. That's too bad because several troubling things were revealed at the press conference. For instance, ACORN no longer has an active office in St. Louis. Who exactly was going to counsel the borrowers if there's no one locally to do the duties? Second, the city gave ACORN the money up front. In other words, before ACORN had done one thing, they were given the full grant. So, who exactly was watching the money?
What's more troubling is the series of questions raised. What's happened to the rest of the money? Did it go to housing activities or to activities to other parts of ACORN? Why was money even given to a group with no active office in St. Louis? None of these questions will have answers until ACORN opens up its books. This is the common thread surrounding ACORN. There is plenty of anecdotal evidence of criminality, however no one can connect the dots until they see the books. Then, conveniently, those that attempt to connect the dots, are forbidden from seeing the books. We saw this in the case of ACORN 8. We see it again here. A group investigated in no less than fourteen states is given a grant of $100,000. Now, $82,000 is missing from that grant. The only way to know where it went is to see the books. The books are conveniently beyond the sight of all those demanding to see them. How does this group continue to operate as such? The fiasco surrounding their alliance with the city of St. Louis is a great example.