Counseling available to those facing foreclosure

With the soaring number of U.S. homes in some stage of the foreclosure process, many individuals and families are wondering just what the process of foreclosure entails.

At the same time, few homeowners would welcome the prospect of discussing their situation with their banker or lender.

"Especially if they're in foreclosure, talking with a lender can be intimidating," says Julie Gugin, executive director with the Minnesota Home Ownership Center, a St. Paul-based nonprofit organization that provides education and counseling on homeownership to Minnesotans with low and moderate incomes.

Fortunately, a number of organizations around the country provide free counseling and education to individuals who are having trouble making their mortgage payments.

Often, it's easier for individuals to contact a counseling agency than it is to contact the bank that holds their mortgage. For one thing, it is becoming increasingly difficult to determine just which financial institution holds a particular mortgage loan, says William Bailey, professor of family economics at the University of Arkansas. "Most mortgages are bundled and sold to secondary investment groups," he says.

Once homeowners identify the right financial institution, there is no guarantee that it will have a local representative, Bailey says.

In addition, homeowners often worry that the lender won't be interested in helping them, says John Snyder, homeownership specialist with NeighborWorks America in Washington, D.C., a nonprofit network of about 230 agencies across the country that provides training and financial support to promote homeownership. Borrowers facing foreclosure typically are frightened, and most counselors have a softer approach than bankers. As neutral outsiders, the counselors also can calm fears and help homeowners clearly and logically assess their situation and options.

When it comes time to contact the financial institution, counselors at these agencies often have the phone numbers and names borrowers need to expedite communication with their lender. "Counselors can get direct lines to the servicers," Snyder says, adding that the counselors are continually expanding the network of financial institutions with which they work.

Many organizations around the country provide information on foreclosure, as well as counseling for homeowners who may be facing foreclosure. Here are descriptions of several such agencies:

HomeLoanLearningCenter.com: Operated by the Mortgage Bankers Association, the Web site can be viewed in either English or Spanish and includes a Foreclosure Prevention Resource Center.

Housing Help Now: HousingHelpNow.org is an offshoot of the National Foundation for Credit Counseling. The Web site provides housing information and consumers can take the Mortgage Reality Check, where test-takers gain an understanding of how well their mortgage fits their budget and income.

LULAC Home Buyer Center Programs: LULAC, or the League of United Latin American Citizens, formed the LULAC National Housing Commission several years ago, says Lynn Jaime, director of home counseling with the Dallas-based organization. It operates Home Buyer Center Programs in Chicago, Dallas, Phoenix and San Antonio, with several additional centers planning stages. Counselors at the centers host seminars on a number of topics, including foreclosure prevention. They'll review assistance options, provide tips on communicating with lenders, and review foreclosure laws, among other things. While the majority of the commission's clients are Hispanic, counselors work with people of all ethnicities.

Legal Aid: The many offices around the country provide legal representation for individuals and families who can't afford to hire their own attorneys.

NeighborWorks America: NeighborWorks America is a network of 238 organizations across the United States that provides counseling and education to help homeowners work their way to financial solvency.

Don't wait until it's too late

Although these organizations provide a tremendous amount of information, they are a first step. There's no getting around the fact that a call or visit to a lender typically is needed, Jacobs says. That's particularly the case if the individual would like to restructure the payment schedule.

Better advice for consumers is to know what you can afford before taking on a mortgage loan, says Snyder. Most agencies are striving to offer education to prospective home buyers before they get a mortgage.

"We strongly believe that education helps borrowers," Snyder adds.