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Foreclosure Crisis: Calls for Help Rise

The number of homeowners reaching out for foreclosure assistance increased.



) -- Homeowners were reaching out more frequenty for foreclosure assistance last quarter as banks got aggressive about pushing bad debt through the pipeline.

Data released by a nonprofit group on Tuesday show that distressed homeowners placed 146,000 calls to a foreclosure-assistance hotline in September, up 3% from the previous month.

For the third quarter, call volume climbed 7%, with indications of stress in various regions of the country. California, Florida, New York, Texas and Georgia represented a large bulk of the call volume while South Dakota, New York, Mississippi, Georgia and South Carolina posted the highest quarterly increases, in range of 46% to 27%.

The Homeownership Preservation Foundation says its "HOPE" hotline has received more than 1.2 million calls so far this year.

CEO Colleen Hernandez says the group has assisted more than 4 million homeowners so far with "the myriad of issues surrounding foreclosure" - from preventing foreclosure to avoiding foreclosure scams.

"In the past two quarters, we've seen an increase in call volume," Hernandez added.

She noted that the increase may have come from recent publicity. Large servicers have sent letters suggesting that homeowners call the hotline, while the Treasury Department and

Fannie Mae


have put out public-service announcements.

Yet the increase in foreclosure actions in recent months would also seem to have impacted the call volumes.

Foreclosure filings hit new monthly records in August and September, according to RealtyTrac, which tracks foreclosure data. One in 139 U.S. homes received a filing during the third quarter, with the 930,437 filings up 3.9% from the previous period.

However, RealtyTrac expects that trend to be artificially subdued this month and perhaps through the end of 2010. Large mortgage servicers like

Bank of America

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JPMorgan Chase

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Wells Fargo

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PNC Financial Services

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and others have come under added scrutiny for foreclosure practices such as "robo-signing" with some temporary moratoriums put in place by a few firms.

Threats of litigation and regulatory investigations have slowed down the foreclosure surge for the time being, though it's expected to rise once a resolution is found.

-- Written by Lauren Tara LaCapra in New York


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