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Tuesday, June 30, 2009

Playing Both Sides: How ACORN Profits from the Making Homes Affordable Program

The roots of ACORN becoming the bogeyman in conservative circles could likely be found in that group's involvement in the Community Reinvestment Act. In fact, I wouldn't be surprised if conservatives blamed the CRA, wrongly in my opinion, largely because ACORN is so tied to it.

With the CRA, ACORN would often stage massive demonstrations in front of banks in order to intimidate bank managers into complying and providing more loans for low income folks. These demonstrations were often quite confrontational, in your face, and were rooted in Saul Alinsky tactics. What wasn't reported nearly as much was that ACORN stood to benefit financially from all of these tactics.

The Community Reinvestment Act allowed ACORN a never ending campaign in which ACORN would "enforce it". Enforce it they did and often with heavy handed tactics. They would picket banks, show up at homes of bank managers, and often demand boycotts of those banks they felt weren't complying with CRA. Because enforcing something like CRA is perpetual, CRA became a perpetual campaign. Worse yet, often ACORN would go directly to the federal government, through HUD, for funding. In other words, their heavy handed tactics were being subsidized by the tax payers. Of course, we'll never know how much money these campaigns got because all of it first started at CCI and then who knows where it wound up.

Now, the CRA is toxic and so that never ending money machine has dried up. It appears that ACORN has found another government program from which to profit in much the same way, the Making Homes Affordable Program.

Several newspapers around the country are reporting that ACORN is sponsoring rallies across the country in an attempt to pressure banks to become part of President Obama's Making Homes Affordable Program. (H/T to Michelle Malkin and MsPlaced Democrat)

Protesters in more than a dozen cities across the country are demanding that a group of mortgage companies who benefited from federal bailout money participate in a government program designed to prevent foreclosures.

They say the companies should sign on to the Obama administration initiative called “Making Home Affordable.” The administration estimates it could help up to 9 million financially troubled homeowners stay in their homes…

The protests are scheduled Tuesday in 14 cities, including Philadelphia, Dallas, Boston, Los Angeles and Miami. They’re organized by the Association of Community Organizations for Reform Now, also known as ACORN.

What none of these news reports seem to report is that ACORN, and its affiliates, will stand to gain financially from the aggressive implementation of Making Homes Possible. That program includes aggressive loan modification programs for troubled borrowers.

Several weeks ago, I was on a conference call with the National Conference of Mayors and ACORN about this very program. So, while they publicly engineer a media campaign to pressure banks to submit to Making Homes Possible, privately they are also making the necessary political connections to benefit from it's implementation. As such, ACORN itself stands to gain in a very lucrative way financially from the successful implementation of this program. For instance, I, along with Nancy Armstrong, have reported on significant corruption in ACORN's relationship with the city of St. Louis in the implementation of this program. There, they charge the city $750 for every loan modified. As such, they have a financial interest in seeing as many banks as possible enter into this program.

What do we find on the main page of ACORN affiliate, ACORN Housing Inc.?

for foreclosure prevention assistance: The Acorn Housing Home Equity Loss Prevention program (HELP) assists families that are having problems making their mortgage payments by advocating on their behalf with their lender to negotiate an affordable solution. Our trained counselors are experts in foreclosure prevention and can tailor a plan of action aimed at your particular situation. To get help now, click here and fill out an application online. When completed, you can download an authorization form which you need to sign and send back to us along with any requested documents we need to prepare your case.

In other words, ACORN's housing arm, ACORN Housing Inc. is a major player in the non profit loan modification world. As such, ACORN Housing Inc. would stand to benefit financially from more banks joining the Making Homes Affordable program. In fact, as Nancy Armstrong recently found out ACORN has secured nearly $8 million in government grants all around the country to help implement loan modifications and home counseling for troubled borrowers.

Mind you, none of this is illegal. Yet, you can see that there is a clear conflict of interest when a grass roots organization lobbies major banks to join a program they themselves stand to profit from. If the conflict were disclosed, there wouldn't be any problems. Though, if the conflict were disclosed, ACORN's image as the protector of the poor would likely suffer.

It is this connection that most media unfortunately miss. For instance, this St. Louis fails to mention entirely ACORN's agreement with the city to provide counseling for $750 per file. How much different would the story look if it was disclosed that ACORN stood to benefit financially from the demonstrations they organize?

The story is made further seedy by this reality. The foot soldiers that ACORN uses to make up the mob crowds that demonstrate banks are almost always poor folks, with a total lack of sophistication. They are told to stand in front of the bank and make their presence felt. They don't know that they are being used as part of an orchestrated plot by ACORN to line its own pockets. They, themselves, think that they are merely standing up for the poor and helpless. As one insider told me

they will parade the gullible and marginal to strong arm the greedy.

Again, I would have no problem with any of this if it was all disclosed. If ACORN disclosed their financial interests in their grass roots activities that would be one thing. Instead, what they really do is present themselves as the protectors of the poor, all the while profiting handsomely from their protection.

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