The route to negotiating an adjustable-rate-mortgage reset is an obstacle course, according to nonprofit counseling groups trying to help homeowners. And half the people navigating it don't stop to ask for directions.
"The statistic is that 50% of the families experiencing foreclosure never ask for help," said Lori Gay, president and chief executive of Los Angeles Neighborhood Housing Services -- a part of NeighborWorks, a national network of nonprofits that deals with homeownership issues. "A lot of those people could keep their homes if they asked someone for help."
Ask early, ask often and keep asking -- because everyone who can help is swamped with people who also need a hand, while the programs and rules for assistance continue to change.
Asking for help doesn't guarantee smooth sailing, counselors cautioned. Some borrowers aren't going to be able to keep their homes. But many will, especially if the lenders come through with the programs they've promised for up-to-date borrowers.
Last month, the Bush administration won voluntary agreement from lenders on a five-year freeze on interest rate hikes for borrowers who are current with payments, live in the mortgage property, face loan increases between now and July 2010 and meet other criteria. The deal was widely recognized as a good start, but many caution that it helps just a narrow segment of borrowers and isn't enforceable.
Kevin Stein, associate director of the California Reinvestment Coalition, said an October survey of 33 nonprofit groups that counsel borrowers showed that they were having a tough time getting the responses and results from lenders they need for their clients.
"There's a lot of chaos," Stein said. "There's a lot of lost faxes, unreturned phone calls, service representatives changing in the middle." He said lenders' responses seem to be: We'll have someone get back to you.
A jungle out there?
Is any institution doing a fair job of working with customers? "From where we stand, it doesn't look like it," Stein said. "It's a morass: People face incredible hold times when they call, the lenders don't have enough people servicing loans and there's no public information that drives accountability -- who's in trouble, who's in default, what the lenders are actually doing, not just saying they'll do -- to keep homes out of default."
Lenders disagree with Stein's assessment.
