Borrowers in trouble still don't know where to turn

In a troubling sign that borrowers late on mortgages simply prefer to stick their heads in the sand rather than educate themselves on their options (i.e., it's not as if there haven't been numerous stories in print and electronic media on this issue), recent polls show that over half of those in arrears don't know that counseling is available or that lenders can provide options to keep their homes. But perhaps the problem is waiting for the borrowers to take the initiative, when personal embarrassment may prevent them from making that important call. From today's USA Today:

With a record number of new foreclosures hitting neighborhoods across the country, a surprising 58% of delinquent homeowners don't know their lenders may offer ways to help them keep their homes, and 56% don't know that free counseling exists to help them, a survey being released Thursday found...

But the biggest obstacle to stopping a foreclosure, Freddie Mac (FRE) says, is the frequent failure of lenders or loan servicers to make contact with the homeowner in the first place.

"Servicers are unable to contact borrowers in more than half of the foreclosures we see," says Ingrid Beckles, vice president of servicing for Freddie Mac, which has about 10 million loans in its portfolio...

"When we go into a house that's been foreclosed to clean it out, we find stacks and stacks of letters from the servicer that have never been opened," says Robin Stout Migala, senior manager of Freddie Mac's loss mitigation team. "Many just think the servicers just want to take the house back, which, of course, is not true."

WHY BORROWERS KEPT MUM

One in four delinquent borrowers never contacted their lender or loan servicer to ask about their options, down from 32% in 2005. Some reasons why they didn't make contact: Mistakenly believed nothing servicer could do 33% Not enough money to make payment 16% Denied trouble making payments 12% Source: Freddie Mac/Rober telephone survey results based on responses from 2,411 homeowners, including 1,004 delinquent borrowers more than one month late. Survey conducted Oct. 23- Nov. 14; margin of error: �3.0 percentage points.