Cooperation From Lenders Leading To Foreclosure Decreases

October 28th, 2008 | Tags: Foreclosure

The lenders are being more cooperative about modifying mortgages and this has led to a decrease in foreclosure numbers. Servicers are following the same lines making it easier for the borrowers.

Douglas Putnam is one of the many who has benefited from this trend. He was able to refinance his residential house in Woodinville in 2004 to lay hands on some cash and pay off credit card dues. The new mortgage he contracted permits him pay less than what he used to previously. At the critical point when his rate was about to double Countrywide reduced it to 4.2% for the long period of 30 years.

In September 2008 King County recorded 493 foreclosures showing a fall of 42% from August and 13% from the September of the previous year according to RealtyTrac. The Seattle region had a foreclosure rate of one per 1,426 houses making it rank 162 among 230 regions according to the placings of RealtyTrac. Its rank is moving up from 133rd in August and 147 in July.

However local counselors are afraid that the situation will worsen. Erin Rearden of Solid Ground that is certified by HUD for counseling said, “It kind of started picking up this summer.” The non-profit agency accepted 78 new mortgage customers in August and 83 during September. This shows an increase of 53% in respect to an average taken of the last eleven months. In October the average has been 55 calls in a week. It means higher numbers when the month comes to a close. She added, “This is especially worrisome given the 20% reduction in our HUD funding and the $32,000 cut in King County funds.”

HUD certified counseling agencies are happy with the positive helpful attitude being taken by the lenders and servicers. The responses however are not as fast as expected but this is because of the sheer volume of work involved. The number of foreclosures are staggering. Lenders are even working with borrowers who have not as yet missed on a single payment. The housing director of Urban League of Metropolitan Seattle, Linda Taylor said that often there are “more educated servicers on the other end.” The lenders or bankers seem to have taken the trouble of training their staff to meet the pressure. When individual borrowers try to independently contact the lenders they often come up against a blank wall. But the picture is different when they route through HUD agencies.