ACORN Loses Bank of America Backing

Michael Shea is executive director of Acorn Housing, which is based in Chicago and has about 250 employees nationwide. He 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.

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.

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

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.

You can find the Fox News article here. You can find the Wall Street Journal article here.