Many Borrowers Ignore Help ?

Daily Real Estate News March 11, 2008

Many Borrowers Ignore Help Offers

The Hope Now Alliance, a coalition of 28 lenders and loan servicers supported by the Bush administration, has mailed more than 1 million letters since December to borrowers with subprime adjustable-rate mortgages, offering a solution. The response rate has been less than 20 percent.Why have borrowers been so reluctant to step forward?"Their collections departments have beat (delinquent home owners) over the head for months. It's no wonder borrowers won't answer the phone," says Todd Buckner, CEO of National Housing Solutions, a for-profit mediator between borrowers and lenders.Finding a solution also isn’t as easy as some politicians and lenders make it sound. For instance, the FHA has created FHASecure to help subprime borrowers refinance out of risky ARMs. Since the program was announced in fall, the FHA has received about 277,000 applications and approved fewer than half of them.And there are borrowers who aren’t willing to bend. Lender Martin Goodman, president of Residential Capital, says, “There's a sense of entitlement (among home owners) that is just unbelievable."