Spokane Neighborhood Action Partners, a nonprofit human services agency here, says its housing counseling programsaved the owners of 97 homes in Spokane County from foreclosure last year, and it's working with a growing number of clients this year who are at risk of losing their homes because they're behind on their mortgage payments.

The program provided foreclosure-avoidance counseling for 392 households in 2009, roughly 220 more households than SNAP had anticipated, says Ray Rieckers, SNAP's director of housing opportunities.

Yet, in the first quarter of this year alone, SNAP fielded 331 requests for foreclosure counseling, and foreclosures likely will rise much higher before they start to improve, Rieckers says.

"We were told during foreclosure counseling training two weeks ago that we're 20 percent into the foreclosure crisis," he says.

SNAP's housing counseling program is operating under a $294,400 budget for 2010, up from a budget of $244,400 in 2009.

Its funding sources include the Washington State Housing Finance Commission, federal community development block grants administered by the city of Spokane, foreclosure prevention aid through the federal stimulus act, United Way, lenders, and other grants.

Agencies like SNAP must cobble together funding from several sources, because the state doesn't have a dedicated budget for foreclosure prevention, says Dee Taylor, director of homeownership programs for the Housing Finance Commission.

"We beg for money from wherever we can get it," Taylor says. "This year, the Legislature came through with $500,000."

Of that, the commission awarded $44,000 to SNAP's housing counseling program, she says, adding that SNAP is the only Spokane-area agency to which the commission awarded funds for foreclosure counseling this year.

With the help of grant funds, SNAP added another counselor last year and is seeking more funds to promote a half-time counselor to a full-time counseling position this year, which would bring its total housing counseling staff to five.

In 2009, SNAP's foreclosure-prevention efforts resulted in stable housing for 262 people, including 84 children, says Ron Hardin, a SNAP spokesman. It also retained $14.4 million worth of property on the tax rolls, and saved an additional loss of more than $5 million in foreclosure costs, Hardin says.

"Neighborhoods benefit through a consistent community and preservation of home values," Hardin adds.

The likelihood of success in preventing foreclosures often depends on how far behind the homeowners are on their mortgage payments.

"When they are behind a month or two, that's the time to contact us," he says.

About 80 households—or about a two-week backlog—are on a waiting list for their first housing counseling appointment, Hardin says.

"If they are about to be foreclosed on, and they have to wait 10 days or more to see a counselor, that can be forever."

Rieckers says some borrowers are too far behind on their mortgages to prevent foreclosure.

"If they stick with us, we're able to save about half," Rieckers says.

Foreclosure counseling includes collecting information and analyzing household budgets, which typically takes a counselor eight to 12 hours per household.

Aaron Mallo, a SNAP housing counselor, helps arrange loan modifications, called workouts, to help clients avoid losing their homes. In most cases, a foreclosure workout involves negotiating with a lender to modify a loan so that payments are less than 31 percent of a family's income, Mallo says.

Workout options include reducing the interest rate, extending the length of the loan, attaching missed payments to the end of the loan, or eliminating interest on a portion of the principal.

Mallo says SNAP's housing counseling program has developed contacts with lenders' loan-servicing departments throughout the U.S. and overseas.

"We do have access to some competent front-line people," he says.

Chase, the consumer and commercial banking name of New York-based JPMorgan Chase & Co., works with individual borrowers and nonprofits, such as SNAP, and is beefing up its own counseling program, says Michael Goode, who will manage the new Chase Homeownership Center, in Tukwila, Wash.

"We reach out to nonprofits and work shoulder-to-shoulder with them to help distressed homeowners retain their homes," Goode says. "Nonprofits get the paperwork to us, and we assign an adviser to work all the way through the loan modification."

JPMorgan Chase bought the assets of the failed Seattle-based Washington Mutual Bank in 2008, including 19 bank branches in the Spokane-Coeur d'Alene market.

The Tukwila center will open this month to provide counseling to a growing number of homeowners with delinquent Chase and WaMu mortgage payments, he says. It will be Chase's first such center in Washington and will serve borrowers statewide. "We expect to see a spike of business when it opens," Goode says.

Rieckers says banks don't want to foreclose.

"At the same time, they need to take action. Sometimes a bank may not communicate between its own divisions," he says.

A workout request by itself doesn't necessarily slow down a foreclosure, Rieckers says.

Sometimes, a borrower attempts to work with the loan-servicing arm of the bank, only to find out that another arm of the bank already has started the foreclosure process, he says.

"Part of the challenge is getting the lender's attention," Rieckers says. "Banks are inundated with workout requests. We can make sure a workout package is put together correctly so the borrow has a better chance of getting a workout."

Applicants of any income level can receive foreclosure counseling through SNAP's home counseling program, although most clients have gone through some hardship or loss of income before they seek counseling, Rieckers says.

In addition to foreclosure counseling, the SNAP program offers prepurchase counseling, which helps first-time homebuyers qualify for favorable mortgage rates, and in some cases SNAP provides down-payment assistance and other subsidies.

The Housing Finance Commission's Taylor says prepurchase counseling helps prevent foreclosures down the road.

"Counselors can help clients improve their credit scores so they can get lower interest," she says. "They can also advise clients whether they can afford a prospective home purchase."