May 11, 1999

NACA, Associates create loan program

By Dave Barbulesco

Associates First Capital Corp., the nation's largest home equity lender, and the Neighborhood Assistance Corp. of America, the nation's leading housing advocacy group, announced Monday the joint development of a loan program that will provide borrowers an opportunity to earn an automatic reduction in their interest rates on home equity loans.

The Mortgage Reduction Program will allow moderate- to low-income home equity customers of Associates to earn a lower interest rate once they make 12 consecutive on-time monthly payments. Borrowers can earn rate reductions for up to three consecutive years.

The program will go into effect July 1 and will apply to new borrowers and existing customers who meet the program's guidelines.

In addition, Associates has also agreed to make available up to $100 million for NACA's lending program -- an effort that provides working people the opportunity to purchase or refinance with no down payment, no fees, no closing costs and the lowest interest rates in the country.

Spokesman David Sandor indicated that Associates has been holding discussions with NACA, which has been openly critical of the consumer-finance company in the past, for several years. Recently, 16 consumers in Massachusetts and California, organized by NACA, filed lawsuits against Associates, but Sandor maintained the legal action was not the motivation for the announcement.

"These programs were the culmination of those ongoing discussions and not a reaction to the class action suit," Sandor said. "(NACA Chief Executive Officer) Bruce Marks seemed satisfied with our efforts and has subsequently withdrawn those suits."

In a news release Marks stated, "This innovative, unique and unprecedented program will set a new standard for mortgage lending, for people with less than perfect credit."

Dallas-based Associates was founded in South Bend in 1918 and maintains a local presence, employing about 300 people at two sites, including the recently opened mail-handling facility.

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