Response to Workout Options Continues to Grow.

McLean, VA -- Despite a surge in media coverage of mortgage delinquencies and defaults, a new survey commissioned by Freddie Mac suggests that many homeowners remain unaware that their mortgage lender may be able to help them avert foreclosure.

But the survey also found improvement of awareness of loan workout options compared with a similar survey done in 2005.

According to the survey, 57% of late-paying home loan borrowers said they didn't know that lenders may offer alternatives to help them avoid foreclosure. That was an improvement from the 2005 survey, when 61% claimed they were unaware of alternatives.

However, when homeowners were asked about specific workout options, such as "repayment plans," the awareness level increased (to 61% for repayment plans). Sixty-eight percent were aware of modifications to adjustable-rate home loans and 78% were aware of the option to pay off their mortgage in a single lump sum, such as occurs in a short sale.

The survey also found an increase in the number of overdue borrowers who say they remember their servicer reaching out to them (86% in 2007, up from 75% in the 2005 survey).

In addition, 44% of late payers were aware that there are housing counselors they can talk to about their mortgage.

"This new survey shows that efforts to get borrowers to call their lenders and counselors are starting to work, but that too many at-risk borrowers are still unaware their servicers routinely provide alternatives that can help them stay in their homes," said Ingrid Beckles, Freddie Mac's vice president of servicing and asset management.