Lenders Help Borrowers Avoid Foreclosure

Mortgage industry's Hope Now alliance helped more than 500,000 financially-stressed home owners in the second quarter of the year.
By:Stephanie Armour: REALTOR®Magazine
While foreclosures have soared, some home owners have found ways to stave off auction and keep their homes.

In the second quarter of 2008, mortgage servicers that are part of the industry-sponsored Hope Now alliance finished more than 522,000 workouts. That doesn't include home owners who have worked out loan modifications on their own with lenders or those who received counseling or financial aid from charitable groups that aren't part of the alliance.

Here are some of the possible options:

· Lenders agree to a repayment plan, tacking delinquent payments onto the end of a
  home loan.
· Lenders allow borrowers to switch from adjustable rate to a lower fixed rate.
  About 14 percent of subprime loans are in default, according to the Center for
  Responsible Lending.
· Lenders allow some borrowers temporarily to pay less than the full amount of their
  monthly payment, a rarer measure usually approved in cases of a financial
  emergency, such as a health crisis.