Lenders Can Help Avoid Foreclosure

With Arizona ranked eighth in the nation in the number of foreclosures, some advice for people who fall behind on their mortgage payments.

Number one, call your lender.

Banks don't want you out on the street, says Chase Bank's Tom Kelly.

``What we want to do as mortgage servicers is to work with customers to try to keep them in their houses. We don't really want to own houses. We would like people to pay us back, so we will try a number of ways to see if we can keep people in their houses."

Kelly said there are several ways lenders can help.

``If it's a sub-prime mortgage that has an adjustable rate on it, and the borrower has been current before the rate goes up, we can work with them to see if maybe we don't increase the rate or we don't increase it as much as the contract would call for," he said.

``If someone has a short-term issue like they were out of work for several months and now they're back to work, we might be able to work out a repayment plan where they would pay extra for a certain number of months to get back on track."

On the other side of the coin, what about people moving into the Valley and debating whether to buy or rent.

Darren Blomquist of RealtyTrac says your decision should depend upon how long you plan to stay.

``People who are thinking more long-term, or investors, will be able to pick up some pretty good bargains with foreclosures," he said, adding that cities like Phoenix are lucky because explosive growth and a healthy local economy can help them recover more quickly from the housing slump.

Just the thought of foreclosure has a psychological effect on some home buyers, Blomquist said.

``It will lead, unfortunately, to people being somewhat fearful of getting into the market because of the possibility that they might lose their homes," he said.