RISMEDIA, September 10, 2007–(MCT)–The foreclosure notice that Patricia Bullon received in the mail early last month was so unexpected that she still looks shocked when she talks about it.Bullon has owned her New Jersey home for seven years, refinancing after her divorce, only to find that the monthly payments on her new mortgage have escalated from $2,607 to $3,577.
The foreclosure letter came from a company she had never heard of, Carrington Capital Management, a Greenwich hedge fund that purchased a subprime loan-servicing business in May.
Bullon said she’s called, faxed and written letters to Carrington in hopes of talking to someone about modifying her mortgage and halting the adjustable rates that are scheduled to continue to rise.
“I need to talk to these people. I don’t want to lose my home,” said Bullon, who was part of two busloads of people who descended on the hedge fund’s West Putnam Avenue headquarters yesterday.
The protesters were members of housing activist group ACORN, the Association of Community Organizations for Reform Now. Its mission yesterday was to persuade Carrington to talk with borrowers whose loans the firm now manages.
Carrington representatives did not come outside or respond to a letter hand-delivered to the hedge fund by one of the dozen Greenwich police officers monitoring the protest.
The fund’s manager, Bruce Rose, a former Citigroup banker, did not return phone calls seeking comment yesterday.
In May, Greenwich, Connecticut-based Carrington Capital Management bought New Century Financial Corp.’s loan-servicing business for $188 million. The unit, which manages more than 100,000 mortgages, has been renamed Carrington Mortgage Services.
Until it went bankrupt, New Century was the country’s second largest subprime mortgage lender. Carrington was founded in 2004 with $25 million in seed money from New Century.
The protesters, who hailed from Connecticut, New York and New Jersey, descended on the quiet office park chanting, “Carrington fix our loans, save our homes, stop the foreclosures now.”
They carried large color photographs of families standing outside homes they say are being foreclosed upon by Carrington.
Three of yesterday’s 50 protesters have been sent foreclosure notices by Carrington, said Nicholas Graber-Grace, the head organizer of Connecticut ACORN.
“Unlike most other loan servicers, Carrington is refusing to even consider doing loan modifications that could make people’s payments affordable and help them avoid foreclosure,” said Wally Nash, a protester from the Bronx, N.Y.
The protest, which also took place at Carrington’s offices in California, comes the same week that a group of federal agencies urged federally-regulated financial institutions that service residential mortgages to work with at-risk borrowers to help them keep their homes.
Strategies can include loan modifications, conversion of adjustable rates to fixed rates or deferral of payments.
The guidance from federal agencies is for any entity servicing these mortgages, whether it be a bank or a hedge fund, said Andrew Gray, director of public affairs for the Federal Deposit Insurance Corp.
“Regardless of who owns the securities, the mortgage still has to be serviced,” Gray said.
“That is really where our guidance comes into play.”
It is possible to modify these loans even if they’ve been securitized, or repackaged for sale on the debt market to other lenders or investors, he said.
“This is necessary and crucial. It’s in the interest of both the borrower and the investor,” Gray said.
ACORN is calling on Carrington to place foreclosures on hold for 90 days to enable homeowners to work with non-profit housing counseling agencies, Nash said. The group is also hoping Carrington will restructure loans for people in default based on their income and ability to repay.
Further, Nash said, the group wants Carrington to contact borrowers that have adjustable rates 120 days before the rate resets. If the homeowner can’t afford the new rate, ACORN wants Carrington to lock in the initial interest rate for the remainder of the loan.
Copyright © 2007, The Stamford Advocate, Conn.
Distributed by McClatchy-Tribune Information Services.
