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Bank Of America Cuts Its Acorn Funding

From the Wall Street Journal:

Bank Pulls Back From Acorn Work

SEPTEMBER 28, 2009

By JAMES R. HAGERTY

Already facing the loss of federal government funding, the community-organizing group Acorn also has run afoul of one of its big corporate partners, Bank of America Corp.

In response to questions from The Wall Street Journal, a spokesman for the banking company said it has "suspended current commitments" to Acorn Housing, an affiliated group, and "will not enter into any further agreements with Acorn or any of its affiliates," pending assessments by the bank of the organization’s operations

Acorn Housing for years has worked with Bank of America and some other big banks on foreclosure-prevention efforts…

"We’re not surprised that our lending partners like Bank of America want assurances that this won’t happen again," said Michael Shea, executive director of Acorn Housing, which is based in Chicago and has about 250 employees nationwide.

Mr. Shea said Acorn Housing is arranging ethics training for its staff as part of an effort to ensure that such "abhorrent" behavior doesn’t happen again and that he hopes to be able to resume work with Bank of America once it can be assured that Acorn Housing has dealt properly with the issue.

Mr. Shea said Acorn Housing has worked with Bank of America since the 1990s. As part of that work, he said, the bank provided grants to pay for Acorn Housing to counsel first-time home buyers on how to handle mortgage debt. More recently, most of the work has been in representing borrowers seeking to avoid foreclosure.

Acorn Housing, created by Acorn in the mid-1980s, now has a separate board of directors and budget, though the two organizations share office space in some cities, representatives of the two groups say. The housing arm long has worked with some of the nation’s largest banks, helping them reach out to distressed borrowers and potential customers in inner-city areas. Distressed borrowers often are more willing to work with familiar community groups like Acorn than they are to deal directly with their lenders.

The Bank of America spokesman said Acorn Housing has been among various nonprofit groups that the bank works with in foreclosure-prevention efforts. A spokesman for Citigroup Inc. said it "has a program in its early stages with Acorn to help us reach distressed borrowers we have been unable to contact."

At Wells Fargo & Co., a spokeswoman said the bank doesn’t have any specific arrangement with Acorn but "will work with any group if they are authorized by the borrower." A spokesman for J.P. Morgan Chase & Co. said that company also doesn’t have any regular working relationship with Acorn. One of the directors of Acorn Housing, Guilermo Loaiza, is a loan officer for J.P. Morgan Chase in Phoenix…

Last year, Acorn Housing was allocated federal funds that could total as much as about $25 million for counseling of distressed mortgage borrowers under a program known as National Foreclosure Mitigation Counseling, created by Congress in late 2007. The share allotted to Acorn Housing was about 7.5% of the $333 million total. That made Acorn the fourth-largest recipient, trailing Neighborhood Assistance Corp. of America, the National Foundation for Credit Counseling and the Homeownership Preservation Foundation.

These funds haven’t all been paid to the organizations. Instead, they get an unspecified amount of money up front and then bill NeighborWorks America, a group designated by Congress to manage this program, for counseling work as it is performed, a NeighborWorks spokesman said.

A spokesman for NeighborWorks said his organization doesn’t publicly comment on the performance of the groups that get these funds until the program is completed.

Acorn Housing and Acorn also have been big recipients of funds from HUD, collecting a total of about $45 million in the past nine years, a HUD spokesman said. About $18 million of the funding was for housing-related counseling programs, including advice for renters and first-time home buyers. About $12 million was for development of affordable-housing projects. Some $5 million was for a program designed to make the public aware of lead-paint dangers, and $3.7 million was for programs that fight racial discrimination in housing.

A spokeswoman for Acorn Housing said it has made 18,626 proposals to lenders on behalf of distressed homeowners to help them avoid foreclosure in the past 12 months.

Of course the real question is why have these banks and other corporations been funding this obviously criminal operation for so long in the first place?

(Hint: the Democrats have made them do it.)

This article was posted by Steve on Monday, September 28th, 2009. Comments are currently closed.

5 Responses to “Bank Of America Cuts Its Acorn Funding”

  1. Helena says:

    All this publicity ACORN’s been getting at least has the upside that corporations that have been strong-armed into forking over their dough now have an excuse to cut it off. Let’s hope they all do.

  2. proreason says:

    Another good unintended result of the children’s sting.

    The decades-long blackmail of the country’s banking system appears to be ending.

    Seriously, think about it. Everybody is pissed off because of the $50 Million in tax-payer funding these criminals received.

    But the real damage was a reduction in the country’s net worth of about $20 Trillion. And 10 million+ people are unemployed because of it.

    Every dime you lost in your 401K’s and Stock Market investments can be traced to Acorn Con Artists (and Obamy, who taught them how to do it).

    And the reduction in value of your home may also be due to them (although, the run-up in many locations probably shouldn’t be counted. It was always a mirage.)

    • proreason says:

      This Hotair article has a graph that illustrates just how bad unemployment is.

      http://sweetness-light.com/archive/boa-pulls-cuts-its-acorn-funding#comment-162701

      The ratio of job seekers to jobs is 6 to 1, the worst since that started being tracked in 2000.

      But the unemployment being used is the 9.7% figure, which understates the true unemployment by a factor ‘of two (since the 9.7% doesn’t include people who can no longer draw unemployment compensation, and those who are seriously underemployed).

      So the real ratio of job seekers to jobs is about 12 to 1.

      Acorn, Obamy, and kook Liberals like Barney Franks are 100% responsible for that.

  3. canary says:

    Thank the Lord. There is hope.

  4. Confucius says:

    Two days later (September 30, 2009), Ken Lewis announced his retirement.

    Quiz: Why did Ken Lewis retire?

    (a) He bought Countrywide.
    (b) He bought Merrill Lynch.
    (c) He took TARP money.
    (d) He severed ties with ACORN.


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