Homeowners facing default on their mortgage too often take the head-in-the-sand approach and leave their No. 1 asset exposed to foreclosure.

Homeownership requires proactive financial management even when the payments are on time, but even after the mortgage servicer calls delinquent homeowners about late payments, too many of them too often turn to denial and procrastination -- death knells for home ownership.

Contacting the lender at the first sign of trouble is a rule of thumb for delinquent mortgage holders. Unfortunately, in more than half of all foreclosure cases, the borrower never contacts the lender and loses the home without a whimper.

A Freddie Mac/Roper survey found that 75 percent of delinquent borrowers recall being contacted by their mortgage servicer -- the company (the lender or the lender's agent) that collects mortgage payments.

Among those aware enough to recall the contact, 68 percent never called back -- 28 percent because they were in denial claiming there was no reason to talk to their servicers or that the servicer could not help. Likewise, 17 percent said they didn't need any help with their payment, even after a call about delinquency, and 7 percent played the procrastination game and didn't return the call because they didn't have enough money at the time to make the payment.

Others said they didn't return the call because they were just plain embarrassed (6 percent) about it all; they were afraid (5 percent), or they claimed they didn't know who to call (5 percent).

Not following up a call from your servicer reveals an unhealthy level of ignorance among defaulting home owners -- 61 percent said they were unaware of a variety of workout options that could help them overcome short-term financial problems.

In a sad and desperate Catch-22-like situation, 92 percent said they would have talked to their servicer had they known these options were available to them.

"People's interest in the options available to them is quite high, but their awareness of these options is quite low," said Elizabeth Armet, a vice president at Roper.

The survey is real cage rattler for home owners who don't want to lose their homes and for servicers who don't want their lender in the business of selling foreclosed homes.

What's more, the survey comes at a time when experts are forecasting the potential for more foreclosures due to flattening home prices and home owners have tapped out their equity.

"The results of the Freddie Mac/Roper survey are a wake-up call to delinquent borrowers everywhere," said Ingrid Beckles, a Freddie Mac default asset management vice president.

"Its message is clear. When you get a phone call or letter from your servicer, don't ignore it, act on it. Pick up the phone, call your servicer and talk to them about the possibility of forbearance or some other repayment alternative because it just may be your best chance to avoid foreclosure."

Servicers might also do a better job of telling delinquent borrowers about those options rather than just calling to let them know they are delinquent.

The survey was conducted Aug. 5 to 18 by Roper Public Affairs and Media among 2,031 U.S homeowners ages 18 and older. About half the respondents were considered to be in default because they were more than one month late on their mortgage payment.

Given most lenders take months before moving to foreclose, the defaulting borrowers had plenty of time to take action.

More proactive measures borrowers can take include:

• Whenever possible, contact the lender if you believe you may be late. Return calls to the lender or servicer and ask about options to bring your mortgage account current. Talking with the lender also indicates that you are responsible and have a desire to address the delinquency.

• Don't panic. Don't ignore the problem. Don't let your pride guide you. If you can't make payments you need help. Ask for it.

• Know what "late" means. Your payment can be late if it's not paid on the due date, but most lenders offer a grace period of 10 to 15 days before charging a late fee and 30 days before actually reporting the late payment to the credit bureau and contacting you.

• Know the servicer, lender or entity responsible for collecting the mortgage payment so you can call them at the first sign of trouble. Mortgage servicer can change over the course of the loan. Continue to pay the old servicer and you could get dinged as a late payer. The new servicer may get the payment from the old servicer, but by the time it arrives it could be past the due date.

• Once you make contact with your lender or servicer in a return call or a call you initiated, stay in touch with that contact until you are current. Document your contacts in writing so you and the lender have a documented record of your efforts.

• If possible, consider restructuring or refinancing your loan -- but not to borrow more money. If you are saddled with two mortgages, do the math to determine if consolidating them will help. Likewise consolidate non-mortgage debts. Also consider extending a 15 year mortgage to 30 years or a 30 year mortgage to 40 years. Examine how any restructured debt will play out if your situation worsens or improves. In each case, determine if restructuring is your best move.

• Avoid scams. When you are down on your dollars you are most vulnerable to debt-removal come-ons. You likely didn't get in over your head over night. Don't expect a quick solution.

• Get financial counseling. Certified (by state and federal agencies and recognized trade groups) consumer credit counseling services are often free or offered for only a nominal fee. They will teach you your rights and work with you and your creditors, say, to temporarily reduce payments or otherwise work out a payment plan that will keep you housed and your credit relatively intact.

• Know your rights. If you are in the military, you have special relief under the Soldiers and Sailors Civil Relief Act to stop the foreclosure and you may be eligible for a reduction in the interest rate. Similar relief is available to those affected by hurricanes, earthquakes and other natural disasters.

• Procedural errors in the lender's foreclosure effort or lender errors when you acquired the loan could permit you to file a lawsuit to enjoin or stop the procedure.

• If all else fails, bankruptcy is an option that can stop foreclosure, at least temporarily, and give you some leverage to resolve the foreclosure.

• Selling the property is another end-game option. Consider selling the property out right as quickly as possible or deeding it to the lender in exchange for ending the foreclosure and minimizing the negative comments on your credit report.

Published: December 14, 2005

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A journalist for 35-years, Broderick Perkins parlayed an old-school daily newspaper career into a digital news service offering editorial content and consulting services. Perkins' San Jose, CA-based DeadlineNews Group includes the flagship news site, DeadlineNews.Com, offering real estate, personal finance and consumer journalism, and a backshop, the Deadline Newsroom.