Daily Real Estate News | February 25, 2008
Mortgage lenders are going door-to-door in some parts of the country to track down borrowers who are behind on their payments and help them work out a solution.
The bottom line is the average foreclosure costs more than $50,000. It is cheaper and easier to lower the borrower’s interest rate and put them on a repayment plan or sell the home at less than is owed.
Hard to track down, no-contact borrowers, as the industry calls them, are in the majority. 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.
Wells Fargo estimated that it had no contact with about 30 percent of delinquent home owners who went into foreclosure in 2006. Last year, it began testing envelopes in bold or unusual colors or resembling wedding invitations as a way to get these customers to open their mail.
Source: The Washington Post, Renae Merle (02/17/08)