REALTOR® Magazine-Daily News-Lenders Reach Out to Troubled Borrowers

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Daily Real Estate News | April 5, 2007 | Lenders Reach Out to Troubled Borrowers
Mortgage lenders, faced with rising portfolios of problem loans, are seeking ways to work with customers to help them pay their loans and keep their homes.

For instance, EMC Mortgage Corp., which has 2.74 percent of its $78 billion portfolio in default, has launched a 50-person team it calls “the Mod Squad.” Its job is to answer calls from customers and work with them to modify their lending agreements so they can catch up.

“You can't just run this like a call center; it needs to be run like a counseling center," says John Vella, president and CEO of EMC.

The Mod Squad isn’t a charitable enterprise. EMC says it loses, on average, 40 percent of the value of a loan in foreclosure and also has to pay taxes and other expenses on the property. Keeping borrowers paying is much more profitable.

The Mod Squad is planning a six-city tour in the hopes of doling out helpful information to struggling home owners. The number is toll-free: 877/362-6631.

Source: Associated Press, Ellen Simon (04/04/2007)