Article: Battered homeowners, lenders turn to 'workouts.' (home loan restructuring) (Special Report: Quarterly Real Estate)

Slumping economy causes mortgage defaults to soar

Only two years ago, the phrase "residential workouts" was new terminology for Greg Cochran, director of real estate loan administration for Glendale Federal Bank. The bank processed so few workouts that it could handle them through its regular loan servicing staff.

Today, Glendale Federal has about 150 residential workouts in process at any given time and typically reviews between 70 and 100 troubled home loans each month to see if they qualify for workouts. Cochran now has a staff of four to handle the workouts.

The story is the same for other lenders. Pasadena-based Countrywide Credit Industries Inc., the nation's ...

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