Servicers Are Relying on Grassroots Approach.

Byline: Amilda Dymi

Glendale, CA-Some of the country's largest banks taking a grassroots approach to foreclosure prevention, counseling and loan modification see it as the best way to secure successful workouts.

Recently Chase's servicing unit opened here the first of nine homeownership assistance centers it has planned to start up in California, leading the creation of a national network of 24 centers expected to be operating by the end of March. These centers assist borrowers who have a home loan serviced by Chase, Washington Mutual or EMC, now a part of JPMorgan Chase.

"We created these local homeownership centers as a place for our borrowers to sit down and discuss their situation face-to-face with trained loan advisors in these challenging times," said David Schneider, head of mortgage servicing at Chase. "They are part of a wide-ranging initiative to help families stay in their homes whenever possible."

Borrowers in distress will be able to have face-to-face counseling sessions with trained homeownership advisors about ways to review possible workout options and avoid foreclosure. To increase operational efficiency homeowners can schedule appointments in advance. Also to help speed up the process, they are required to bring required documentation, such as recent W-2s and tax forms, recent pay stubs, bank statements and monthly expense documentation, as well as other information explaining their current financial challenges.

Chase said its advisory network is an extension of its long-term strategy. Since 2007 the bank said it has helped prevent 330,000 foreclosures on Chase, WaMu and EMC loans, "primarily by reducing interest rates, extending the term of the loans and providing principal deferral."

At year-end 2008, Chase announced initiatives designed to help a total of more than 650,000 families, and expects to modify more than $110 billion of home loans.