Mortgage Survivors

Yes, she admits, she made some bad financial choices, going from a 30-year, fixed-rate mortgage at an 8 percent interest rate in 2000 to an adjustable-rate mortgage at 8.5 percent two years later so she could use the equity to replace appliances and fix a cracked patio.

When that rate was set to increase, she refinanced again and took out more money to work on her 32-year-old house. In February 2007, she refinanced to a 10.8 percent interest-only mortgage that would soar to as high as 13.8 percent after two years.

She never missed a payment, but she knew it was only a matter of time. "There was a point when I was thinking, 'You know, I'm going to have to walk away from this. I can't keep doing this.' I had seven years in the house. I don't want to do that. But how long do I have to sit here in the dark from night to night?" she said.

The answer was three months. In June 2007, she contacted Countrywide. According to Collins, Countrywide told her she did not qualify for a workout because she was not yet behind on her payments. She kept calling and spoke to many people in different departments. "They would say, 'I'll look into it,' and then I'd get the same response."

That's when she turned to Keith Johnson, director of the District office of NACA, the Neighborhood Assistance Corp. of America.

A friend told Collins about NACA, which has completed thousands of workouts, partly through an agreement it has with Countrywide and CitiMortgage to permanently reduce interest rates and/or loan balances. It is one of many nonprofit organizations working with homeowners.

Johnson asked Collins for W-2 forms, tax returns and bank statements. "We figure out, what can this person afford based on their income?" he said.

He calculated that Collins could handle about $1,300 a month. Last October, armed with all her financial documents, Johnson bypassed Countrywide's customer-service department and went straight to loss mitigation.

Sixty days later, they agreed to a 30-year, fixed-rate mortgage of 4 percent. Her monthly payment would cover both the principal and interest, and she would pay no fees for refinancing.

But her loan grew from $105,000 to $237,000 because she had pulled out so much equity and done so many refinances. "That's fine," she said. "I'm immensely relieved."

A spokesman for Countrywide said he could not provide information about a specific borrower.

In January, Countrywide counselors helped 11,844 borrowers stay in their homes, the company recently reported. The majority of those loans -- 9,921 -- were modified in some way, such as an interest rate reduction. The rest were resolved other ways, such as repayment plans or forbearances, which involve suspending or reducing monthly payments until borrowers regain their financial footing.