Dozens of people, wearing yellow "STOP LOAN SHARKS" T-shirts and carrying suitcases and boxed lunches, streamed out of the Westin Bonaventure Hotel in downtown Los Angeles Wednesday afternoon.
Bruce Marks was standing outside, motioning for them to board the buses at the curb. With a cell phone seemingly glued to his ear, he spent 20 minutes pacing back and forth, occasionally helping people load their luggage.
Finally Marks stepped inside each of the six buses, apparently giving their drivers the go-ahead to pull out. The nearly 350 community activists from Neighborhood Assistance Corp. of America were headed to Phoenix, the second stop on a four-city tour to help distressed borrowers avoid foreclosure.
Marks, NACA's CEO, would be staying behind for a few hours. He had just set up a meeting with executives at the bond powerhouse PIMCO — with, we think, our inadvertent assistance.
Several hours earlier we'd received a press release announcing that NACA was planning to "converge" on PIMCO's Newport Beach headquarters that afternoon. The activist group wanted to pressure PIMCO, a huge investor in the mortgage-backed securities market, to support loan modifications for distressed homeowners. Given the importance of this issue to the financial industry, the stature of the organizations involved, and the fact that we were only 15 minutes away from Newport Beach, we decided to cover the demonstration.
Per standard journalistic procedure, we contacted PIMCO for comment. Scott Simon, a managing director in charge of its MBS investments, told us he had no idea that NACA was planning a protest.
"We've actually been supportive of responsible mods," he said. "The biggest problems have been with the banks" that service the loans and also hold the second liens, which they are reluctant to extinguish. (It was an argument we had heard many times before).
Then we phoned Marks. It turned out he had called off the demonstration. His people were running late, and there would not be enough time to stop in Newport Beach on the way to Phoenix. But he invited us to meet with him at the Bonaventure.
While on the phone we mentioned our conversation with Simon, whom Marks said he had been trying to contact. He asked for Simon's number. All we had on us was a public-relations contact.
Nevertheless, by the time we arrived downtown, Marks had reached Simon and scheduled a meeting with him and Mohamed El-Erian, Pimco's CEO and co-chief investment officer, for late in the day. "They're pissed at the servicers," Marks told us outside the hotel.
After the buses left we went inside. Over a plate of fried calamari, Marks declared a victory of sorts. Nearly 50,000 people had come to the Los Angeles Convention Center that weekend to get what he called "same-day solutions" – that is, a live person who could actually get a loan modification completed.
NACA's past agreements with the top servicers appeared to be paying off. Each of the servicers had been forced to supply 75 staff members to NACA to process all the requests during the five-day event.
"I've overwhelmed them," Marks said. "I'm forcing them to do something they didn't want to do."
When we called Marks on Thursday to ask how the PIMCO meeting went, he sounded pleased with the results but had come to some new conclusions.
"What's become apparent to me is the servicers really don't want to do the loan mods at all," he said. "You would think they'd be drooling to get 50,000 people coming in, but I see now their strategy is to string along all the borrowers until they make enough money on the bank side to take the losses."
His voice became quiet.
"The inevitable result will be foreclosure," he said.