With the looming number of foreclosures hitting the state along with the rest of the nation, Texas state leaders are working on ways to reduce foreclosures.

Texas Attorney General, Greg Abbott, proposed a series of foreclosure prevention measures to three of the largest mortgage lending and loan servicing companies doing business in the state: Countrywide Mortgage, Houston-based Litton Loan Servicing and Dallas-based EMC Mortgage.

"Mortgage lenders, loan servicers and public officials must work cooperatively on behalf of Texas homeowners who are affected by the looming housing crisis," Abbott said in a statement. "Because of the housing industry's tremendous economic impact, resolving this issue is important to the Texas economy's continued growth and expansion."

Abbott outlined five measures that lenders and loan servicers should implement to restore borrowers' financial stability and reduce foreclosures in Texas.

• Provide long-term solutions for borrowers with adjustable-rate mortgage loans. Mortgage companies should consider easing homeowners' mortgage-related burdens by converting adjustable-rate loans into fixed-rate products.

• Mitigate first, collect second. Lending companies should engage homeowners before sending a case to collections by reviewing each case in a non-confrontational setting and exploring solutions. With this approach, the chances of a debtor repaying his or her obligations increases.

• Create an in-house resolution committee to address consumer complaints.

• Improve communication with consumers. While many companies have adjusted their protocols and are engaging consumers who face imminent foreclosure, they should also contact consumers well before ARMs reset to higher interest rates so that fixed-rate options can be explored.

• Waive applicable penalties and fees for loans at risk of foreclosure while the companies work with troubled consumers to preserve their loans.

Source: http://www.amarillo.com/stories/102207/ new_8745435.shtml