Mohammed Ibrahim is overwhelmed by people asking for help.

It's not only the sheer volume of people needing help but the emotion, said Ibrahim, a counselor at the Neighborhood Housing Services of Staten Island in New York. Each person comes with a different story. Often they break down and cry.

The group that Ibrahim works for helps financially troubled families in Staten Island, a middle-income borough of New York City, try to avoid foreclosure on their homes.

The number of calls to his office jumped last summer as the mortgage crisis gripping the United States escalated. It rose even more in October, when a national hotline that refers cases to local groups like Ibrahim's became a central part of a government plan to prevent foreclosures.

Between October and December of 2007, Ibrahim took on 63 cases, compared with 77 cases for the previous nine months and just a handful in 2006. After some holiday respite, January is already shaping up to be even busier, he said.

Around the New York region and in other parts of the country, mortgage counselors report a similar onslaught of cases, especially since Treasury Secretary Henry Paulson announced the HOPE NOW alliance of lenders, investors and counselors in October.

We're getting so many calls about the government plan, but no real answers on how we are supposed to help them, said Eileen Anderson, who runs two NeighborWorks counseling centers on suburban Long Island, outside New York City.

The number of calls to Anderson's offices rose more than tenfold in 2007 from the year before, and since October more than half of those calls have been referrals from HOPE NOW, she said.

While the HOPE NOW alliance puts troubled borrowers in touch with counselors, both counselors and borrowers complain it offers no financial help.

There's no money, nobody has emergency funds. Clients who are calling are desperate, Anderson said.


Agnes Kallon and Bai Turay, a Staten Island couple, are among the people that Ibrahim is trying to help. Kallon, a nursing assistant at Richmond University Hospital, and Turay, who receives disability allowance, have a combined income of $39,000 and six children to support.

In 2005 they took out a mortgage for a $412,000 house with a low introductory rate, based on their mortgage broker's assurance that they would easily be able to refinance when the rate went up. But when their mortgage payment reset to $3,000 a month, far beyond what they can afford, that assurance didn't hold up.

If we lose the house, what will happen to the kids? Turay told Reuters at Ibrahim's office. These brokers are profiting from other people's misery.

The buildup of such cases means the process of negotiating deals with lenders to keep the homeowners in their homes is taking ever longer. And the further down the path to foreclosure they go, the less likely it can be avoided.

U.S. home foreclosures and the rate of homes entering the foreclosure process rose to record highs in the third quarter of 2007, according to the Mortgage Bankers Association. The number of mortgages in foreclosure hit a record 1.69 percent, compared with 1.05 for the same period a year ago, while the mortgage delinquency rate rose to its highest since 1986. Figures for the fourth quarter will be released in March.

The Homeownership Preservation Foundation, the nonprofit group that runs the national mortgage counseling hotline as part of the HOPE NOW alliance, has fielded 140,000 calls since it joined the alliance in October, said Tracy Morgan, the foundation's vice president.

Only 37,000 have needed counseling, of which about 29 percent needed additional assistance in their community and were referred to local offices of organizations like NeighborWorks and the Salvation Army, she said.

The foundation receives no funding from the HOPE NOW alliance.

The hotline does good work, said Ibrahim, But it seems they are overwhelmed too.

Callers to the hotline in high-foreclosure areas such as Stockton, California, have complained of insufficient help, while mortgage counselors who take referrals from the hotline say it has suffered some initial problems.

There are still some kinks with the hotline in terms of where calls go and what kind of advice they'll get, said Jenifer Higgins, program officer at United Way in Rochester, New York.

Morgan said the hotline has hired 187 new counselors since the beginning of the year and is becoming more efficient.


The huge increase in people needing help due to the mortgage crisis is a problem that United Way is encountering nationwide, said Madye Henson, vice president of its national Community Impact group based in Alexandria, Virginia.

Since August, the local United Way in Cleveland, Ohio, for example, has received 1,500 calls a month on foreclosures in the area. That compared with around 300 calls a month in 2006.

The fallout from the housing slump comes at a time when Americans are also having to contend with rising costs of food and fuel.

At the Salvation Army's Johnson County Family Lodge in Olathe, Kansas, a 10-room transitional family shelter, at least five families on a 50-strong waiting list have lost their homes through foreclosure.

The size of the waiting list is unprecedented in Johnson County, a suburb of Kansas City that is wealthier than most, Laura Flynn, administrator at the shelter told Reuters by telephone. Johnson County has an average income of $68,013 in 2004 compared with $44,334 for the rest of the United States.

While some people are able to stay with family or find a place to rent after their homes are foreclosed, for others that is not an option, Flynn said. If you get so far behind with your payments that you get foreclosed on, most landlords are not going to rent to you, she said. Many families on the waiting list are living in their cars, she added.

In Long Island, New York, NeighborWork's Anderson said she is getting calls from people who are just not used to having to reach out for help.

She advises people struggling to get by to turn to parish outreaches and food pantries like Long Island Cares, which has reported an influx of middle-income families needing food. But her office recently got a call from a charity begging them to stop referring people.

Occasionally, there is good news. John and Susan Harriman, from Central Islip, Long Island, are among those Anderson was able to help stay in their home.

John Harriman, a custodian at a school, wrapped the house in a big red bow for his wife for Christmas: Still having our house is our Christmas present.

(Reporting by Kristina Cooke; Editing by Eddie Evans)