Struggling to connect with their delinquent customers, a group of six major mortgage lenders are teaming with nonprofit groups to serve as go-betweens.
As part of the program, borrowers who fall behind on their payments will receive notice from a financial counseling service, "instead of the big bad bank," said an executive with one of the lenders.
The plan is expected to be announced Tuesday by representatives of the Bush administration and the Hope Now coalition of lenders. Company officials could not speak publicly about the plan in advance of Tuesday's news conference in Washington.
Foreclosure typically begins at the 90-day delinquency mark when borrowers receive a notice of default alerting them that they could lose their homes if they don't pay up.
The new outreach letters instead will offer delinquent borrowers a grace period in which to try to negotiate new loan terms with their lender.
"That's always our message -- be in contact with us," said a spokesman for another of the companies.
Mortgage lenders have been pummeled with complaints that they have been slow to help borrowers, but they say many homeowners are scared or unwilling to talk to them.
The letters will be sent to holders of all kinds of loans: prime mortgages to borrowers whose credit was good, second mortgages, subprime loans to high-risk borrowers and alt-A loans (a category between prime and subprime).
The companies involved in what was described as a pilot program are the bill-collecting arms of Countrywide Financial Corp., Washington Mutual Inc., Wells Fargo & Co., Bank of America Corp., J.P. Morgan Chase & Co., and Citigroup Inc.
Under a previous plan that was heavily promoted by the Bush administration, lenders agreed to "fast-track" a freeze on the teaser payments of some subprime borrowers with adjustable rate loans, to keep them from going into foreclosure when the payments rose.
Lenders also have been trying to quickly refinance certain borrowers who are eligible for fixed-rate government backed loans.
Those initiatives have been aimed at borrowers who have not yet missed payments, but lenders say they also have been working to avert foreclosure for borrowers who already are delinquent.
Bank of America has tried leaving prepaid cell phones at the homes of some hard-to-contact struggling borrowers, a spokesman said. And Countrywide said Monday that it has agreed to have Acorn, a national association of community groups, work with it to counsel borrowers who already have missed payments.