We may be in the information age, but nobody in the U.S. mortgage industry seems to have a firm grip on the ownership of much the country’s outstanding home loan debt, much less how to go about renegotiating the terms of mortgages that are about to go bust.

On Thursday, Federal Reserve Chairman Ben Bernanke said that the U.S. foreclosure rate remains “too high,” creating “substantial social costs” as the subprime mortgage mess, made worse by the financial crisis it triggered, continues to wreak havoc on the economy. The Fed chief said "more needs to be done" and called for a more streamlined approach to loan modifications in a bid to stem any further “unnecessary” bank repossessions…

You don’t need to be behind on your mortgage payments to ask for a better deal from your bank.

Surprised? It’s easy to see why. The government’s announcement on Tuesday that Fannie Mae and Freddie Mac would modify terms for borrowers who are at least 90 days late with their payments makes it seem as if only the delinquent are eligible for a personal bailout.

But 90 percent or so of homeowners are still current with their payments, and for them, it has often seemed as if the banks were playing a game of chicken. Sorry, but until you blow off the payments for a few months running and wreck your credit in the process, the lender won’t even consider renegotiating the terms.

On Monday, however, Citigroup announced a pre-emptive campaign to talk to people before they fall behind on their payments. It plans to reach out to borrowers in distressed areas, including Arizona, California, Florida, Indiana, Michigan, Nevada and Ohio, and offer new terms to those who anticipate trouble making their payments.

And it turns out that other banks may also be willing to negotiate with borrowers who are current with their payments, even if they aren’t promoting it as aggressively as Citi.

JPMorgan Chase, HSBC and Bank of America, which took over Countrywide and its soured mortgage portfolio, have modified terms for such borrowers. And some of these adjustments are patterned after plans that the Federal Deposit Insurance Corporation put into place after it took over IndyMac.

There are several prerequisites to consider if you’re a borrower who is paying on time and wants some kind of a break. The home in question must be your primary residence. And the banks generally need to have your mortgage on their books and not have sold it off to Fannie Mae or Freddie Mac or someone else.

Then, the big question will be how financially strained you are. Perhaps your loan is about to adjust to a higher rate that is barely affordable — or already has. Or maybe you live in a two-income household where one income has disappeared or fallen drastically because of reduced sales commissions. Or, possibly, you lied about how much money you were making when you applied for a mortgage back in 2006 when nobody bothered checking.

Whatever the reason, the bank wants to know your current debt to (pretax) income ratio. If your monthly household income is $10,000, the bank may consider you overburdened if you’re paying more than $4,000 or so toward your housing costs, or 40 percent of your income. So don’t bother trying to get a better deal if your percentage is down near 25 percent.

If you think you may qualify, then you need to figure out whom to talk to. You should expect that every major mortgage lender or servicer is utterly overwhelmed right now. Calling the 800 number on your bank statement may lead to long hold times or representatives confused about changing internal guidelines…

SACRAMENTO—Gov. Arnold Schwarzenegger is proposing mortgage relief in hopes of stabilizing California's economy.

The Republican administration on Wednesday announced a plan to encourage lenders to modify existing home loans as a way of keeping people out of foreclosure.

The governor also proposed a 90-day moratorium for homeowners facing default on their loans. Lenders, however, would still be able to exempt themselves under certain circumstances.

An ongoing measure to prevent foreclosures in California showed continued success through the third quarter, according to the results of a government survey released Tuesday. California Department of Corporations commissioner Preston DuFauchard began the survey in 2007 when the Governor’s Subprime Mortgage Agreement was announced in November of last year.

“The newly issued figures for loan modification efforts to prevent home mortgage foreclosures in California show that the Governor’s Agreement has helped result in a near doubling of loan modifications in the third quarter since the beginning of 2008,” DuFauchard said in a press statement regarding the survey.

The results showed the numbers of loan workouts both initiated and closed have increased, he said. DuFauchard also reported loan modifications — “the type of workout most beneficial to consumers,” according to the commissioner — totaled 14,060 in September alone, the highest monthly count ever reported by the survey. Modifications as a portion of total closed workouts also passed 50 percent for the first time in September.

Even as political pressure builds in Washington for a sweeping program to help struggling homeowners, some banks are realizing that it may be good business to keep borrowers in their homes.

On Friday, JPMorgan Chase became the latest big bank to pledge to cut monthly payments, by lowering interest rates and temporarily reducing loan balances for as many as 400,000 homeowners. Early in October, Bank of America, which acquired the large lender Countrywide, announced a similar effort aimed at 400,000 borrowers as part of a settlement with state officials.

Though the measures encompass only a fraction of the nation’s troubled homeowners, analysts say they could become more instrumental in stemming the rising tide of foreclosures than the government’s plan to partly guarantee home loans.

“The banks are doing the cost-benefit analysis,” said Gerard S. Cassidy, a banking analyst with RBC Capital Markets. “The banks don’t want these customers going into foreclosure because it is a costly and punitive way of trying to collect your money.”

WASHINGTON (AP) — Each day from July through September, more than 2,700 Americans lost their homes in foreclosure.

That number, up from 1,200 a day a year ago, is a sign that the mortgage industry and government programs have done little to help troubled homeowners.

The mortgage market's troubles have proved to be far more serious and intractable than most in government or the private sector had predicted a year ago.

NEW YORK (CNNMoney.com) -- The federal government, which has been criticized for not doing enough for Main Street while coming to the immediate aid of banks, is working on a new plan to help troubled homeowners.

The plan was discussed Thursday at a Senate Banking Committee hearing that probed the federal response to the credit crisis.

Lawmakers repeatedly urged Treasury to act with dispatch and draw up clear guidelines to ensure that banks that receive taxpayer funding begin lending again and do all they can to prevent foreclosures.

A loan modification is a change in the loan contract agreed to by the lender and the borrower. The modifications getting attention now are those designed to reduce the payment burden on borrowers faced with impending interest rate increases that will make monthly payments unaffordable to them. Many are subprime borrowers.

Homeowners faced with this prospect, whether they are delinquent or not, should request a modification.

The Treasury Department's rescue plan for the U.S. financial industry doesn't directly address the root cause of the crisis: falling home prices.

The government's plan, which includes taking stakes in major financial institutions and temporarily guaranteeing certain new bank debt, could cushion the economy and thus the housing market from further blows. But many economists say additional measures are needed to stimulate demand for homes and to reduce mortgage delinquencies and foreclosures.

The number of homeowners stung by the dramatic decline in the US housing market jumped last month as foreclosure filings grew by more than 50 ...

DAN A. BAILEY JR. was desperate when he sat down on May 19 to send an e-mail message to his mortgage lender, the Countrywide Financial Corporation, pleading, yet again, for help.

Behind on his payments and fearful of losing his home of 16 years — a 900-square-foot bungalow in Wilmington, N.C. — Mr. Bailey had spent the previous six months unsuccessfully lobbying Countrywide, at the time the nation’s largest home lender and loan servicer.

Mr. Bailey, 41, promised in his e-mail message that he would pay every nickel he owed if Countrywide would modify his mortgage in a way that allowed him to keep his home.

“This is unbelievable,” Mr. Mozilo said in his message… “Disgusting.”