'Hope Now' Offers Little of Either

But some critics say the program simply hasn't ramped up fast enough to handle the growing number of homeowners in trouble.

"Every time I see a new projection on the number of homeowners that are going to be impacted in the next 12 months, that number gets larger," said Susan Keating, CEO of the National Foundation for Credit Counseling, which has over 100 member agencies across the country. "We're now six months into the Hope Now hotline, and we just haven't seen enough progress commensurate with the need out there."

In a letter last month, Keating offered the Alliance the services of more than 750 certified credit and housing counselors but said her offer was rejected on the grounds that it "did not fit (the) business model" of the Homeownerhip Preservation Fund, which operates the hotline.

Some of the frustration expressed by readers may result from the nature of hotline counseling. To deal with the high volume, the Hope Now hotline uses a streamlined system of taking calls. The process involves taking information about the caller's loan and financial status, helping them work out a budget and then referring them to their lenders.

This so-called "Level I" service also includes getting the caller's authorization to provide financial information to the lender and creating an "action plan" that lists options and next steps. Morgan said that additional counseling is available for callers who need it.

But officials at the NFCC say there are several important additional steps that give homeowners the best chance of saving their home. This so-called "Level 2" service includes verification of the household budget information supplied by the client; a draft "hardship letter" explaining to the lender the reasons for the loan delinquency and a plan to correct it; supporting documentation to strengthen the request for loan modification; and follow-up sessions based on the lender's response.

Morgan at the HPF says such additional counseling is available to callers, and notes that many of the agencies providing counseling through the hotline are NFCC members. But Keating said in her letter that "HPF is insisting that agencies may only provide the limited Level 1 services ... regardless of the needs of the troubled homeowner."

Some callers who were able to get through to their lender said they felt abandoned after being handed off by the hotline counselor.

"After two months of making several phone calls and e-mails to my counselor from Hope begging for her help, nothing was ever resolved," said Deanna Burns, of Webb City, Mo. "My mortgage company is GMAC and they were rude and unwilling to work out anything with us. By this point, I am one week away from being three months behind on my mortgage, and the credit card payments are now into collections. It is too difficult to catch up. It is now March and my husband and I will be deciding on one of two choices this week: 1) bankruptcy or 2) foreclosure."

Morgan said the alliance understands the need for more follow-up but simply is unable to monitor such a large volume of cases all the way through to final resolution.

"That's not part of our staffing model," she said. "We are there to provide that counseling on the phone to those folks. We don't follow up with the servicers. We're unfortunately not staffed to do that."