Billions in mortgage aid go through questionable nonprofit

by MPA18 Mar 2015
A recent Bloomberg article sheds light on NeighborWorks America, a Congress-appointed nonprofit aimed at delivering mortgage relief to Americans hurt in the financial crisis, and the group isn’t what it appears.

“A close look at the group reveals a house in disorder -- with sweetheart contracts, document fudging and unexplained departures of top officials,” according to Bloomberg.

NeighborWorks America has awarded at least two large jobs to insiders without bidding and executives have signed off on a multimillion-dollar technology deal to a recently formed contractor that included board members in common with the nonprofit. One of the audits stated the contractor overcharged by as much as 20 times, according to the media outlet.

In February during roughly two-hour long congressional hearing,  Republicans repeatedly suggested that the Department of Justice (DOJ) was illegally funneling money to activist groups using sham transactions embedded in legal settlements with two big banks.

As part of the settlement agreements over the 2008 financial crisis, the DOJ required banks to donate millions of dollars to mortgage relief groups that Republicans said have gone unfairly to left-leaning groups.
 

COMMENTS

  • by Viva la Revolucion | 3/18/2015 12:47:23 PM

    Would you really expect otherwise from a govt. slush fund?

  • by | 3/18/2015 1:07:25 PM

    NeighborWorks America is a long-established non-profit. Read the Bloomberg article carefully: some fairly minor errors in process and judgment. Not a scandal. And certainly not a 'questionable' nonprofit -- as per the badly written headline here. Meanwhile, look at the legally mandated foreclosure prevention efforts of Bank of America, Citibank, JPMorgan, Wells Fargo and other TBTF banks -- banks whose mania for securitization caused this TRILLION dollar mess -- and banks who were legally supposed to help homeowners -- yet whose ongoing improprieties and inefficiences are far, far worse than the picayune things in the Bloomberg article about NeighborWorks.

  • by FormerBankExec | 3/18/2015 2:12:15 PM

    Long established does not mean reputable, simply well connected. You need not look much further than Countrywide Home mortgages to see that a large company can fail, as well as become embroiled in scandals. This however is not a story about what the banks have or haven't done, but rather an initial look at the behavior of a non profit that has its hands in the cookie jar, with little oversight. I have seen some of these issues first hand, so I can say the statements in the article, while not as thorough as they should be, are certainly very accurate.

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