Banks forgive NASCAR ‘white elephant’ loan while still foreclosing on homeowners

The city of Charlotte's tentative deal with Bank of America and Wells Fargo to erase $17.6 million in NASCAR Hall of Fame debt has left some homeowners angry after they said they struggled to restructure their loans and fight foreclosure.

The city was supposed to pay the $19.1 million loan with proceeds from NASCAR hall commemorative brick sales and corporate sponsorships, but revenue fell far short of expectations.

The hall opened in May 2010, and the city never made a single payment on that debt.

The proposal calls for the city to pay the banks $5 million from Charlotte Regional Visitors Authority funds. In exchange, the banks will erase $3.5 million in accumulated interest and $14.1 million in principal.

Jill Fletcher of West Palm Beach, Fla., said she has been trying to keep Bank of America from foreclosing on an investment home she and her husband bought in the Ballantyne area in 2006.

She said she would be happy with a deal similar to what was given to the NASCAR Hall of Fame.

"If they would just take off the interest, that would help," Fletcher said. "They are still trying to foreclose on us, and we are still trying to fight them."

Charlotte City Council member John Autry, who represents east Charlotte, said some neighborhoods have been hurt by foreclosures, stemming from the housing crisis and the recession that hit in 2008.

He said Tuesday that he wishes the two banks would be as "humane" toward homeowners as they were to the NASCAR hall. The City Council will vote on the deal Monday.

The two banks defended the loan agreement Tuesday and said they have worked to keep people in their homes.

Wells Fargo said it worked with the city to "reach a solution that supports the long-term viability of this city-owned landmark."

Bank of America said it wants the hall to succeed and has "made unprecedented investments to provide relief to mortgage customers in need of assistance … helped more than 2 million customers avoid foreclosure."

Big banks, including Bank of America and Wells Fargo, have faced sharp criticism for their handling of borrowers struggling to make their payments during the financial crisis and the resulting surge in foreclosures.

Homeowners complained lenders were unwilling to help them or only provided loan modifications after putting them through a frustrating application process. Investigators later found banks were mishandling foreclosure documents in a process that became known as "robo-signing."

To help combat these abusive practices, federal agencies and state attorneys general in 2012 reached a $25 billion settlement with five major lenders, including Bank of America and Wells Fargo. The pact included $17 billion in loan modifications and new standards for treating borrowers. Thestate.com

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