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In an effort to help those borrowers hurt by subprime mortgages, National Bank Of Kansas City’s (NBKC) mortgage division has started a Mortgage Recovery program.

As part of the program, NBKC will review a consumer’s current loan, including prepayment penalties, adjustment dates and rate variables, and educate the borrower on the current loan and available options.

With so many stories in the media regarding subprime loans, refinancing, FHA loans, rate freezes and foreclosures, consumers are confused about their options,” said Todd Geiman, Executive Vice President of NBKC’s mortgage division. “We were taken aback by the misinformation given to many of the people we’ve spoke with. Many home owners don’t even realize they fall in the subprime category. We want to help people understand their options.”
Out of this concern grew NBKC’s Mortgage Recovery program. Loan officers will review current loan papers, making sure the consumer understands when their loan will adjust and what it will adjust to. If the consumer’s loan has already adjusted and they are struggling to make the payments, the loan officer educates them on their options as well as provides information on other agencies that may be of help. Those interested in having their loan reviewed can call 800-375-8096 to schedule an appointment.

Refinance is an option for some people, while others may qualify for the rate freeze. The problem we’re seeing is that people don’t know where to turn or what they qualify for,” said Shawn Courter, one of the loan officers who volunteered for the program.

The consultation is a no-pressure, no-sales meeting. It’s strictly about arming the borrower with the facts about their mortgage and making sure they understand any potential risk.

“Home ownership has climbed to 80 percent in the last couple of years. We are finding people in subprime loans that shouldn’t be,” Geiman said. “Many would qualify for an FHA loan, which can include better terms, and more importantly, a fixed rate.”

On Dec. 6, President Bush announced a plan to freeze rates for a select group of subprime borrowers. To qualify, the loans had to be funded between Jan. 1, 2005, and July 31, 2007, and have an interest rate that will reset between Jan. 1, 2008, and July 31, 2010.

The rate freeze will only help a fraction of the more than one million subprime borrowers. Borrowers also need to look at FHA loans and refinancing as possible solutions. Refinancing to a fixed rate should be the first option the consumer considers,” Geiman said.

Recently the Federal Housing Administration received broader flexibility to offer refinancing to homeowners with good credit history.

Although NBKC is a national lender, lending in all 50 states, the program is being rolled out first on a local level. It will be rolled out nationally in the second quarter of 2008. Currently NBKC funds conforming loans, including FHA and VA mortgages. In 2007, 24.69 percent of NBKC’s funded loans fall in the FHA and VA categories. NBKC funds FHA loans in all 50 states.