Trust Matters

Buying a house/getting a mortgage is a complex transaction which requires a reasonable degree of trust. People always say things like "read what you're signing!!!" and whatnot, but ultimately these transactions are only going to happen smoothly if the people involved have a reasonable expectation of honesty from their real estate agent and their mortgage broker/banker. Take that away, and this is what you get:

Although some lenders initially resisted paying for assistance, the industry has begun backing community groups that help them find these borrowers. The math is simple: The typical foreclosure costs more than $50,000. It is usually cheaper and less time-consuming to lower the borrower's interest rate, put them on a repayment plan or sell the home at a loss. To stem the foreclosures, the mortgage industry says, lenders need to reach people they call "no-contact borrowers," those who have eluded or rebuffed them.

There are lots of them. From September 2005 to August 2007, 53 percent of the loans backed by Freddie Mac that went into foreclosure involved borrowers who could not be reached.

Many of these homeowners do not expect, or trust, offers of help from their lenders, say community groups that have become active in this work. Some borrowers tried reaching out before an interest rate increase pushed the monthly payments out of their reach, only to be told to call back after they fell behind.

"They feel that the lender has put them into this bind, so they are not returning phone calls," said Marcia J. Griffin, president of HomeFree-USA, a local group that works with home buyers and homeowners.