As America becomes a more urban society, cities like Boston are facing the crunch of a massive influx of new residents. Caught in the middle are Americans struggling to purchase homes. Even for those able to find homes, many are still limited by other factors, like student loan debt and credit scores, which make receiving traditional mortgages extremely difficult.
The Neighborhood Assistance Corporation of America (NACA) is trying to solve this problem. Unlike a traditional bank, NACA will approve and underwrite a loan at the same rate for anyone who applies, regardless of income level or credit history. Bruce Marks, the CEO of NACA, said that one of the organization's primary goals is to improve equity in the housing market. By offering the same flat rate to everyone, they can help groups impacted by the institutional bias of larger institutions.
“We don’t know whether someone’s getting a higher interest rate because they’re a minority, or because they’re lower income, or because of where they want to live,” Marks said during an interview with Boston Public Radio on Monday. “At NACA, everyone gets the same deal.”
Though Marks was vocal in his opposition to the predatory behavior of major banking institutions, especially during the subprime mortgage crisis, he has found an unlikely ally: Bank of America. According to Marks, a majority of NACA's endowment — $10 billion — was provided by the bank.
While the premise of NACA sounds risky, Marks said that the group has a foreclosure rate of .00012 percent, due in part to its emphasis on making sure that homeowners are not put in dire situations. In addition to providing loans, NACA also offers customers free counseling and financial relief. Marks said that in some cases, after approval from a peer lending committee made up of fellow NACA members, loan recipients can be eligible for up to three months of financial assistance.
NACA is not without its critics. According to Marks, some take grievance with the organization's advocacy against predatory lenders and calls for reform of the federal mortgage agencies Fannie Mae and Freddie Mac. To those critics, Marks says they should come to NACA events to see the organization in action.
“We have been criticized [by people] who say we don’t play well in the sandbox. Absolutely. Because children play in the sandbox.”
