Strapped Borrowers Urged to Act

Washington Post (09/21/07) P. D3; Irwin, NeilMany borrowers facing financial problems are ducking calls from mortgage lenders that can help them refinance their home loans or renegotiate, government officials on Thursday told the House Financial Services Committee, which was looking for ideas on how to address the mortgage crisis. Homeowners who are at risk of falling behind on their mortgage are not returning the calls because they fear the lender wants to claim the property, Treasury Secretary Henry Paulson Jr. said in testimony before the House panel. "Lenders are proactively contacting homeowners facing an interest rate reset that they likely can not afford," according to Paulson. "Yet those calls often go unreturned because many homeowners mistakenly think that their lender wants to repossess their home in foreclosure." HUD Secretary Alphonso Jackson and Federal Reserve Chairman Ben Bernanke agreed with Paulson's sentiment that borrowers need to reach out to mortgage lenders before missing payments to give themselves more financial options for keeping their homes and protecting their credit ratings.