2008-04-22 00:00:00 -
via:
Apr. 22--Homeowners worried about losing their homes had an 80 percent chance of avoiding foreclosure if they worked with a counselor, according to state officials.
Working with local agencies around the state, the state's housing division oversees a hot line for homeowners worried about foreclosure at 1-877-601-4673 or 1-877-601-4673. Ryan McMaken, of the state division of housing, said 80 percent of people who used the hot line and spoke with a counselor avoided foreclosures. Some were able to get their home loans renegotiated, sometimes getting an adjustable interest rate changed t a fixed rate. Many still had to leave the home, he said, but were able to do so without being foreclosed. Some lenders allowed the home to be sold for less what what the mortgage was worth.
Lenders are working more with struggling homeowners, according to Pueblo's Sharon Gaskell of the nonprofit Consumer Credit Counseling Service, who counsels homeowners. Lenders don't want to own the houses, she said, so they have incentive to help a homeowner remain in the home or at least get it sold without going to foreclosure. Still, negotiating with a lender isn't easy for a homeowner, she said. Most banks and mortgage companies still won't work with a homeowner, or even return their calls. Only when a counselor is involved will most lenders participate. Lenders know the counselor has looked at the homeowner's situation and had read the papers having to do with the loan.
Counselors are more able to speak the same mortgage lingo as lenders, Gaskell said, and it seems to help. "When counselor calls a lender, the feedback is a lot faster than when a consumer calls," she said. Gaskell said her office is still receiving more and more calls for help. And homeowners need to call as soon as they believe they are in trouble financially, she said. "People need to see us early, not wait till the last minute," she said. "We're still getting people calling us when it's a week before the auction." Avoiding foreclosure Most callers to the state's foreclosure hot line avoided foreclosure.
Here's what happened to them: --25 percent: still in foreclosure counseling. 14 percent: sold home before foreclosure. 11 percent: bankruptcy. 10 percent lost home in foreclosure. 9 percent: able to pay off missed payments. 8 percent: started a repayment plan with lender. 8 percent: able to get mortgage changed in some way. 2 percent: mortgage refinanced. 2 percent: gave lender the home's deed. 1 percent: got second mortgage. 10 percent: couldn't be contacted or other. (Source: Colorado Division of Housing)