Mortgage Lenders See More Borrowers Give Up

USA Today (03/10/08) P. 1A; Knox, Noelle
Mortgage lenders report that many borrowers whose mortgage balances exceed the value of their homes are making no attempts to iron out new payment plans and simply are walking away, especially in Florida, California, Nevada and other states plagued by substantial home-price declines. Freddie Mac reports that more than 50 percent of foreclosures involve borrowers who failed to respond to letters and calls from their lenders, and the Mortgage Bankers Association notes that 18 percent of foreclosures in the fall of 2007 involved absentee owners. Experts say borrowers are often afraid to contact their lenders, assume they will not be able to help or lack the money necessary to keep their homes, but some lenders are hiring workers to answer the phones and assist borrowers in restructuring loans and using other innovative strategies to make borrowers see the importance of contacting them. Although many homeowners are looking to take advantage of foreclosure relief programs promoted by the federal government, Popular Mortgage Servicing Senior Vice President Dennis Lauria says assistance should not be given to all borrowers. According to Lauria, "One-third of people who are delinquent should be in foreclosure. . . . They shouldn't have (gotten the loan) to begin with."