Firm Introduces Foreclosure 'Emancipation'

Stable Footing here has begun offering a patented, voluntary homeowner protection plan as a marketing product to mortgage lenders with the aim of respectively better protecting the value of lenders' loans and borrowers' credit in the event of what otherwise might be a foreclosure situation.

With the Stable Footing product, should a 60-or-more-day delinquency occur, the borrower who has the protection plan has the option of exercising "emancipation rights," said Stable Footing founder and chairman Bill Desane.

When the borrower does this, Stable Footing pays back the principal on the borrower's loan, severs ties with the lender, takes possession of the property and begins working with the borrower on a way to purchase it back, said Will Haddad, vice president of operations for Stable Footing.

At this point, the borrower has the option of staying in his or her home and can choose to pursue "a guided recondition plan back to financial stability," he said.

"It avoids the displacement in a typical foreclosure situation," Mr. Haddad said.

If the borrower so chooses, Stable Footing will draw up an alternate rental payment plan for him or her. This is designed to ultimately make it possible for him or her to reach the point where he or she can repurchase the home, ideally through a loan with the original lender if the borrower so chooses.

"It preserves the [borrower-lender] relationship," said Mr. Haddad. "It's less adversarial than the traditional foreclosure process." (c) 2008 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/