A few things have happened in the last few days that may ultimately ease what many are calling an onrushing foreclosure train wreck.

While some attempts are more meaningful and far-reaching than others, at least a couple of institutions which can do something to avert any coming catastrophe appear to be moving in that direction and it is heartening to see that the system may be capable of responding to trouble.

The Conference of State Bank Supervisors (CSBS) and the American Association of Residential Mortgage Regulators (AARMR) just issued a joint consumer alert on mortgage payment increases. The alert urged homeowners with adjustable rate mortgages and especially those with the non-traditional types such as interest only or payment option mortgages to plan immediately for any resets of their rates in the coming year.



The advisory states that borrowers should seek information on the characteristics of their mortgages and begin to budget to meet any future rate shocks. Consumers are also urged to contact their mortgage servicers immediately if they anticipate problems or are already having difficulty with their payments.

The two organizations also issued a letter to mortgage servicers and providers urging them to reach out to their borrowers to provide appropriate loan information and to work with them to prevent the loss of their homes.

CSBS Senior Vice President for Regulatory Affairs Michael Stevens said, "Servicers should provide information on when the recast will occur and how much the monthly payment will adjust. Should the loan go into default, servicers should consider workout arrangements to prevent foreclosures."

Freddie Mac is also touting its foreclosure avoidance activities. The corporation, along with Fannie Mae, the Mortgage Bankers Association, and 20 other mortgage industry leaders has established NeighborWorks America which is sponsoring a public service advertising campaign on television urging troubled homeowners to face their problems and seek help. Two of the ads can be viewed on the Freddie Mac website (www.freddiemac.com).

A Freddie-sponsored survey conducted by Roper Public Affairs and Media found that 74 percent of home mortgage borrowers were very interested in seeking the assistance of housing counselors in avoiding foreclosure yet only 64 percent had been aware of the existence of such counselors. Only 61 percent of borrowers who were already late on mortgage payments were even aware that there was help available to them.

Freddie Mac is working with its servicers to establish and enforce guidelines for avoiding foreclosure and offering incentives to servicers who are proactive in this regard. Freddie, however, also wants its servicers to conclude the legal proceedings in a timely manner if the loan can not be salvaged. The corporation has a complicated schedule of rewards (some quite substantial) and penalties for servicers who follow or fail to follow the various standards.

Perhaps the most far-reaching housing effort was announced on Thursday by Rep. Barney Frank (D-MA) although it is designed to make housing more affordable going forward rather than reducing the problems with existing mortgages.

Frank, who is chairman of the House Financial Services Committee, has introduced a bill which would put $1 billion into a fund to build affordable housing. The money, which would be partially funded by profits from Freddie Mac and Fannie Mae, would go directly to local communities, states, and other recipients to build or rehabilitate 1.5 million housing units in the next 10 years.

In announcing the new legislation Frank laid part of the blame for the current subprime mortgage problems on the lack of affordable housing, saying that lack pushed many people into purchasing homes they could not afford.

Hearings on the proposed legislation will begin on July 12.

In related news, Caliber Global Investment Ltd., a fund listed on the London Stock Exchange announced on Thursday that it is closing down due to the turmoil in the subprime market. The fund which is managed by Cambridge Place Investment Management hopes to sell all of its assets over the next year and return as much money as possible to its investors.

Caliber controlled almost $1 billion in assets. More than half of the assets were residential mortgage-backed securities, the majority of which were from the U.S.