By Lynn Adler
NEW YORK (Reuters) - The U.S. housing market hasn't been this bleak in generations, yet HOPE NOW chief Faith Schwartz is still plenty optimistic.
Optimism is a precious commodity, with the foreclosure prevention group estimating there are some 3 million homeowners 60 days late on mortgage payments and a few million others facing hardships like job loss or illness.
"The numbers are big," admits Schwartz, who heads the industry-led homeowner aid program, which reported a record 270,000 loan workouts in April alone.
"It's always: how can you be better in the face of a rising problem," she said.
The government swooped in this spring with a rescue program that buttresses industry efforts to heal housing. Almost half of the 33 servicers in HOPE NOW have signed on so far.
"As complicated as it is, when you have all these big companies putting all these resources into making it work, and the government resources helping them get it done, they'll figure it out," she said. "I'm an optimist. Sure, we'll get through it."
The highest unemployment in more than 26 years, as well as underemployment, are tipping many borrowers with prime credit into default. This has escalated the problem that began in the market for riskier loans to less qualified homeowners.
And it could make foreclosure prevention seem like catching a slippery fish without gloves.
In the longest recession and worst housing market since the Great Depression, borrowers that do get right-sided often re-default. Foreclosure activity is running at an all-time high and is seen escalating now that most temporary freezes have ended.
The hope is that the federal government's Home Affordable Modification Program, or HAMP, that kicked off this spring will mean more sustainable loan workouts, Schwartz said.
It is a complex program requiring intensive documentation to protect taxpayer dollars spent keeping troubled borrowers in their homes, making a modification a longer process. The pipeline of troubled loans has swelled as the kinks get worked through and lenders decipher who meets the criteria.
"That's why I'm not saying it's over yet because I see the delinquencies and I see what has to be done to keep people out of foreclosure," Schwartz added.
"I give it three to six months of getting through this pipeline of people who are looking for help and modifications and refinances through that (government) program, and I'm hoping we start seeing some stability more toward year end."
HOPE NOW is battling troubled loans on growing fronts.
It is working with the government to thwart foreclosure fix scams; linking possible job opportunities to its website, www.hopenow.com; beefing up its pool of housing counselors. Continued...
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