A bankruptcy judge advised mortgage servicers to make sure the foreclosure attorneys they retain are available and responsive to borrowers as well as proactive about workouts.

"I see situations most often where the borrower appears in court and the attorney for the lender is not there. The borrower says he has been calling the lender and getting no response. They bring in returned checks," Judge Ronald Pearson of the U.S. Bankruptcy Court for the Southern District of West Virginia, said at the Mortgage Bankers Association's servicing conference in San Diego last week.

"If you hire a lawyer to commence legal action, he better have the time to call the borrower who is there," the bankruptcy judge advised.

He also said older homeowners nationwide are making appearances in court, sharing stories of how their homes were almost paid for when someone telephoned them and pushed the borrowers to refinance.

Typically, the refi loans turned out to offer a teaser interest rate and payments that doubled after three years.

"If a borrower can prove that and show how they can't make the payment, you are in trouble," Judge Pearson told the servicing executives at the conference.

"I have yet to see the servicer bring a loan originator to court to counter the elderly debtor's testimony."

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