www.virginiaforeclosureprevention.com

A new state law gives some Virginia homeowners struggling to make their mortgage payments longer to work out a deal with their lenders.

A Virginia Foreclosure Prevention Task Force is supposed to help deal with the rising number of foreclosures here.

But the foreclosures keep piling on, despite these efforts.

Virginia was ranked by a national real estate research firm as having the 11th-fastest foreclosure rate in June in the country. A year ago, it was No. 25.

Lenders say the last thing they want is another foreclosure on their books, so they are willing in general to work with borrowers. A foreclosure can cost as much as $80,000 for all parties involved, according to the task force.

Lenders say struggling mortgage holders should call them. People who are late making their mortgage payments may be able to work out a repayment program or modify their loans.

But borrowers say working with lenders is not always easy and cutting through the red tape can be tough. The experience can be exasperating, borrowers and foreclosure prevention counselors say.

Dawn Moran of Midlothian said she called her California-based lender, troubled Countrywide Financial Corp., nine times over a three-week period in June.

The lender, embroiled in the collapse of the subprime market, was purchased earlier this month by Bank of America Corp.

Each time Moran called her lender, she spoke with someone different, she said. Each time, she had to explain her situation and was told different loan and past-due amounts, she said.

Ten minutes before the auction deadline, she was able to stop the sale by wiring a money order.

"I did beat the foreclosure," Moran said. She did it without the help of new laws or initiatives.

She kept copious notes. "Be persistent. Take notes every single time. Get the name of the person you speak with. Ask if you can speak with a supervisor."

Since her house was at stake, she never lost her cool, she said. "I hope my experience will help others."

The success of working with a lender seems to be on a case-by-case basis, said Robert Taylor, director of the Virginia Real Estate Center at Virginia Commonwealth University.

"Often, you have to be in default before a lender will even start talking to you. It's a Catch-22. The borrower is trying to keep their head above water."

Some lenders are overwhelmed by the scope of the problem, Taylor said. "They have not had to deal with this. Now, they are forced to."

Alicia O'Brien, president of the Richmond Mortgage Bankers Association, said the cost of taking back a house and reselling it is not a benefit to anyone. "We don't want the borrower to lose their home."

Despite efforts at state and federal levels to keep people in their houses, foreclosures are on a fast track.

One in every 615 Virginia households -- or a total of 5,255 -- received a foreclosure filing in June, up 204 percent from a year ago, according to RealtyTrac, an online researcher of foreclosures nationwide.

By comparison, U.S. foreclosures rose 53 percent from a year ago, with one in every 501 households receiving a foreclosure filing.

More than half of all delinquent borrowers do nothing, waiting for eviction notices to arrive and letting mortgage holders foreclose on their houses, lenders say.

"I am not guaranteeing that we can help but we are here doing everything in our power to see if we can help," said Steve Dunn, vice president of loss mitigation for SunTrust Mortgage Inc. in Richmond.

"If people would just reach out; I have a staff waiting to help," he said.

"I can't give you a percentage of how many people we have helped, but I am confident it's a high number. If the borrower has the willingness and the ability, we should be able to work something out."

Some lenders are willing to work with borrowers, but many are not, said Connie Chamberlin, president and chief executive officer of Housing Opportunities Made Equal, a housing advocacy group in Richmond.

"Many are not set up to deal with the huge demand for loss mitigation services," said Chamberlin, who serves on the Virginia Foreclosure Prevention Task Force.

Sorting out how much a borrower owes on a mortgage can require a foreclosure intervention specialist, Chamberlin said. "It's not a very consumer-friendly environment."

The task force sponsored workshops in June across the state for homeowners having trouble making their mortgage payments.

About 650 struggling mortgage holders attended workshops, meeting with foreclosure-prevention counselors, said David Smith, state deputy secretary of commerce and trade. He spoke on behalf of state Secretary of Commerce and Trade Patrick O. Gottschalk, chairman of the task force.

Foreclosures are likely to get worse, Smith said. "The bright spot now is a willingness on the part of lenders to do all they can." That said, lenders are still trying to get their arms around the problem, Smith said.

"Even if the lender won't call you back, it's important to keep trying. You must be diligent."

Virginia is a nonjudicial state, meaning a foreclosure can move within a few months through the system. But it also means borrowers can't challenge factual errors in court, Chamberlin said.

The new law gives some borrowers who want to avoid a foreclosure an extra 30 days to work out a repayment plan with their lenders.

It's a start, Chamberlin said.

Introduced as emergency legislation by Gov. Timothy M. Kaine and supported by the governor-appointed task force, the law applies to borrowers with high-cost and high-interest loans. It went into effect July 1.

"Providing the 30-day extension will be helpful," Chamberlin said.

Also, as part of the bill, lenders are required to provide accounting of all the amounts due, "one of the hardest things to figure," she said.

Contact Carol Hazard at (804) 775-8023 or chazard@timesdispatch.com.