Major Seller-Funded Down Payment Company Sinks to New Low

February 9, 2009 – 6:14 pm

Just when I thought the "non-profit" seller-funded down payment assistance providers couldn't sink any lower, the employees of Nehemiah Corporation of America raise the bar on deception.  

Its one thing for Nehemiah to sue HUD to prevent elimination of seller-funded down payment assistance (SFDPA) along with spending hundreds of thousands on lobbying for pro-SFDPA legislation.  Its another thing to resort to deceptive practices,such as astroturfing, in order to influence public opinion.

In response to my commentary on H.R. 600, several comments were made in support of seller-funded down payment assistance (SFDPA) programs and Nehemiah.  Why these comments are special is because they originated from I.P. addresses belonging to Nehemiah Corporation of America. Yes, you heard that right.  They all came from Nehemiah Corp of America. 

Just so you can fully appreciate Nehemiah employees tactics, I'd like to share a portion of some of their comments with you:  (Click here for original story and comments)

By Psue on Jan 30, 2009  (Click here to view entire comment)

I used a downpayment program to buy my home and I am not a minority. I still live there too if that surprises anyone. I heard that FHA loans in combination with downpayment assistance have a 94% success rate. … Sounds like this thread is on a witch hunt to me.

This appears to be a personal testimony although it includes the usual soundbites typically fed to the media.

 By Alexis May on Jan 30, 2009  (Click here to view entire comment)

… I would like to mention that I was a recipient of dpa and I have never been late on my payments. Also, like many Americans, I received subsidized student loans which helped me complete my B.S. in 2000. If it wasn’t for educational programs and homeownership programs I don’t know where I would be.

Hmmm…. another personal testimony and no mention of any affiliation with Nehemiah.  

By Psue on Feb 3, 2009  (Click here to view entire comment)

… I don’t believe a 1 in 5 ratio is enough reason to eliminate the program entirely. For all the testimonials provided in support of the program, who can say outright that they lost their home as a direct result of DPA? … Finally, inflated appraisals are addressed in HR 600, since it calls for DPA reform. Have you read the bill? I do respect your opinion, but the people who read this thread deserve to know the truth of what is being presented to them, not hearsay. I represent the 94%, who will represent the 1 from the 1 in 5 to ban the program for millions of underserved homebuyers?

Yet another chance to disclose employment with Nehemiah even after stating that the people who read the thread deserve to know the truth.  

By Psue on Feb 3, 2009 (Click here to view entire comment)

Now that I think about it, a 1 in 5 default rate could be looked at as 4 out of 5 successful homeowners created from DPA vs 5 out of 5 forced out of the market completely. 5 out of 5 real estate transactions created and more families paying property taxes to their county for infrastructure. The plus outweighs the minus however you look at it.

I like how she dismisses the excessive delinquency/default rate here.  Apparently, 1 in 5 borrowers in trouble isn't cause for concern.

By RE Champ on Feb 3, 2009 (Click here to view entire comment)

Do the Math: I have been in several meetings with real estate industry folks when this site has been brought up in conversation. The word on you is that you try to attract attention to yourself by taking extreme positions filled with half-truths and and faulty statistics. According to this group of which a couple had been targets (or known targets personally) of this site from time to time, you don’t contact the companies you attack and when you get the other side of the story from someone you blow it off as not credible due to “an agenda” or “self-interest”.…

I am now a retired realtor living just outside Sacramento. I have followed the Nehemiah success story closely over the years and have to tell you that you are dead wrong about these guys. I have referred other non-profits to Nehemiah and heard back that were great to deal with and bent over backwards to help them. A cousin of mind was able to get a sizable low-interest loan from their community lending group to expand her Foster Care center, when no banks would touch it. She checked their references and found mental health facilities, battered womens shelters and family housing operations that did the same and were full of praise for Nehemiah and its people. BTW, the $20 million Nehemiah was granted by the state was very public and uncontested. … I spoke to a friend who knows more than I and she said Nehemiah has to do this as a for-profit activity because the IRS considers development as non-charitable. That means the profits get taxed and what ever is left over goes right back to the non-profit to create more good work. … On the other hand, from what I have heard about you, someone should check you out and expose your shaky background. … I used DPA several times in my career to help clients and every deal we did was good for all parties.

This one is my favorite.  The poster makes it sound like he is a retired broker who just happens to have been following the Nehemiah story and has heard good things about them.  Nothing in this post would make one think that it originated from Nehemiah.  Yet, the poster has the nerve to question my ethics and accuse me of half-truths.  Classic.  

By R Dorsey on Feb 4, 2009  (Click here to view entire comment)

My Sister and My Pastor both used the Nehemiah Program to buy there first homes neither one defaulted (had a late payment). My Sister sold her home with the same program. … Has any one actually read the GAO report? Did you know that HUD has yet to release the complete set of variables used to come up with the claims rates? Bottom line in the banking world 96.5% LTV is better then 100% oh by the way did any one read the Congressional Budgets Office evaluation of 6694 that said it would off set losses do to the PMI income? Bitterness does have a way of ignoring the truth.

Another "testimonial".  The comment that "bitterness does have a way of ignoring the truth" is  beautiful with irony.  

By Paul Stanley on Feb 4, 2009  (Click here to view entire comment)

Wow, it is amazing how many people are so blind when it comes to the truth about SFDPA. Perhaps it is time to wake up, take the blinders off, and truly understand WHAT and HOW SFDPA works. It is not a shell game, smoke and mirrors, or a money laundering scheme as some have stated. SFDPA is an honest viable program designed to help those deserving of sustainable homeownership who may not have the capability of coming up with an initial down payment of say 3-5%. There are many good posts above supporting SFDPA but one stands out: To RE CHAMP…..WELL DONE!

Again with the truth.  Are these guys pathological or what? Shame on you Paul Stanley.

By Psue on Feb 5, 2009  (Click here to view entire comment)

Just for the record, everything I said is the absolute truth. If I didn’t believe in downpayment assistance, I would never pretend to, and I would have never used the Nehemiah program to buy my home. I hope DPA does come back to help more homebuyers despite your own deception. No “real estate” blogger would ever go so far in an attempt to defame a non-profit when there are so many other bigger issues going on in the world today. You obviously have ulterior motives yourself.

This one is fun, she conceals that she is a Nehemiah employee and then accuses me of deception and ulterior motives.  I couldn't come up with material this good on my own.  

Even more amazing is that this isn't an isolated incident.  These posters were led to my blog by a reader who posted my blog in response to a story in the Sacramento Bee by Jim Wasserman.  I also left comments on the blog and provided links to my site and story.  Click here to read the Sac Bee story and complete comments.  Here are some of my favorites: (Remember these are members and employees of Nehemiah and not civilian supporters)

jeepgrrlz wrote on 01/29/2009 08:47:14 AM:  (Psue)

"… There is more information about these programs and their benefit to homebuyers at www.dpagroundswell.org. From there, I emailed my elected official to support HR 600 and reform downpayment assistance."

workingmom08 wrote on 01/29/2009 08:55:12 AM: (Nehemiah Insider)

"I went to www.dpagroundswell.org and sent an email to my elected officials, letting them know that I support this bill. You can take action too, and become a part of the solution to the failing housing market. DPA stimulates the economy & creates jobs…isn't that what America needs right now?"

jeepgrrlz wrote on 01/29/2009 02:15:42 PM: (Psue)

"… I used Nehemiah because my family couldn't afford to lend or give me a downpayment, and I did not have liquid funds to cash out. I'm still in my home and I plan to stay there. It is not right to tell me I don't deserve my homeownership because I used an assistance program in liu of my parents or a government grant. DPA is the good guy, don't use them as a scapegoat to the subprime meltdown. Any program that operates without tax dollars to expand successful homeownership should be embraced not scrutinized."

jeepgrrlz wrote on 01/30/2009 08:19:39 AM: (Psue)

"… Yes, to confirm your curiosity, I am definitely an interested party. As I said before, I am a homeowner, proud to have used the Nehemiah program. I am also a licensed real estate agent who can no longer use this valuable tool to help my sellers and buyers. I read the propoganda links you shared with me to hear your argument out. It's too bad that your duck principle won't allow you to read the real facts on the information I gave you in reply."

workingmom08 wrote on 01/30/2009 08:42:08 AM: (Nehemiah Insider)

… I'm also a homowner who didn't have "skin in the game" & needed the Nehemiah program to help my husband & I purchase our home. We have owned that home for 9 years! … Everyone involved in our purchase were very encouraging about DPA, AND it's my understanding that this program doesn't cost taxpayers any money at all-that's why it is called a PRIVATELY FUNDED DPA! It doesn't use government funds, so I can't understand why people keep talking about taxpayer's money! I am GRATEFUL to the Nehemiah program, & I appreciate that someone saw me as worthy to own a home even though I didn't have a downpayment….

AlexisMayknows wrote on 01/30/2009 02:27:23 PM: (Alexis May)

"I am truly grateful for private companies like Nehemiah for helping me purchase my first home nine years ago. I've followed the history of this company and found that they are trying to help those in need. The dpa programs are used in conjunction with FHA loans. FHA loans are fixed. The 100 % sub prime loans were not. This is why so many people defaulted on their mortgages because the payments increased. It's easy to see that down payment assistance programs is not the issue, but one solution to our current housing market. I hope programs like Nehemiah are around when my children are looking to buy their first home."

As you can see, at no point did any of the commentors on the Whistleblower or Sacramento Bee stories disclose their affiliation with Nehemiah Corp of America.  In doing a wee bit of research, I was able to ascertain that Psue and jeepgrrlz are user names belonging to a Nehemiah employee, Peggy Sue Carpenter.   She also posts pro-SFDPA comments under the name Peggy Sue.  Click here to view an interview with Nehemiah employee Peggy Sue with a local news station. 

I have nothing against any person asserting their right to post opinions.  I regularly post my opinions on a variety of issues including SFDPA.  My issue is with her failure to disclose her interest as a paid employee of Nehemiah Corp of America.  Its deceptive to comment on the subject in an attempt to influence public opinion without first disclosing a financial interest.  This practice of disguising the efforts of an organization who is advancing their own agenda as independent public reaction is referred to as astroturfing.  The term is a play on "grassroots" campaigns that are as fake as astroturf. 

Here are also some links to stories she has commented on using various identities:

California Real Estate Market Insight

Congressman Seeks Renewed Housing Aid

Nehemiah/AmeriDream Down Payment Assistance Programs (DPA's) – Are they that bad?…..

Do you think the loss of Down Payment Assistance.would effect you?

Real Estate Report: Why buying a home would be great timing

Down-Payment-Assistance-Programs-might-be-Alive-kicking

Down-payment-assistance-programs-to-be-eliminated-as-part-of-new-housing-law

OH NO! Nehemiah is going, GOING, GO……………………………………….

H.R. 600 Introduced to Restore DPA

Workingmom08 is another commentor who chooses to conceal her ties to Nehemiah.  I found a plethora of stories and blogs that she has commented on.  Here are some of them:

Price dips have bright side

H.R. 600 Introduced to Restore DPA

Down Payment Assistance

CBO Report: DPA Bill Creates Homeownership at No Cost to Taxpayers or U.S. Government

Jan 1, 2009 the NEW minimum downpayment for an FHA loan will be 3.5 Percent

Nehemiah Program Update

The future of downpayment assistance grants

Sorting Out Fannie and Freddie and What it Means to You

Ameridream and Nehemiah Downpayment Assistance Programs In Jeapordy

Down Payment Assitance time running out?

Is Down Payment Assistance Coming Back?

Prospective buyers, take note of Oct. 1

OpenCongress.org comment on H.R. 600

With this kind of respect for the truth (or lack thereof) its no wonder that people are so confused about the subject of seller-funded down payment assistance.  In visiting Nehemiah's "grassroots" website, www.dpagroundswell.org, I was shocked at the misinformation posted on the site.  In particular, the Nehemiah site claims:

Recent news articles show that the elimination of downpayment assistance (DPA) on October 1st, 2008 has had a broad ripple effect on the entire economy.

Nehemiah then links several news stories about the high unemployment rate, layoffs and historical foreclosure levels as support.  Really.  The site actually blames high unemployment, layoffs, and foreclosure on the discontinuance of DPA.  Click here to see for yourself.

Nehemiah's website is also confusing because it states that down payment assistance has to be preserved. Yet down payment assistance has not been prohibited and is still allowable for programs which meet HUD's requiremets.  Only seller-funded down payment assistance has been elimated.  Its deceptive to suggest that bona fide down payment assistance is at risk.  Check out Nehemiah's Groundswell site and see for yourself.  

While I can chuckle at the tactics used at Nehemiah and/or the employees, it makes me wonder what is going on in society that accepts and even rewards such behavior.  Consider my final comments to Peggy Sue Carpenter as a wake-up for the industry and America:

"Let me get this straight, you accuse me of deception when you, Peggy Sue Carpenter, visit numerous blog and news sites and post pro-seller funded DPA comments and testimonials without disclosing that you are a paid employee of Nehemiah? Obviously, you are unclear as to the definition of deception.

Your internet posting tactics are as inherently dishonest as the seller-funded down payment laundering that you support. The fact that you have not reached a point in your moral development to know this is disturbing at best.

Furthermore, your reasoning that I must have ulterior motives because “No real estate blogger would ever go so far in an attempt to defame a non-profit when there are so many bigger issues going on in the world today” is beyond faulty. My motives are simple and direct: I don’t look the other ways on scams and schemes regardless of whether the companies that perpetrate them are “non-profit”. This is the Mortgage Whistleblower Blog and not the “Co-sign to Industry BS Blog"."

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