Officials in Washington and in the lending industry have touted joint efforts to help distressed homeowners refinance away from foreclosure. But if you plan to refinance or otherwise rework your loan, be prepared for a long and sometimes frustrating wait.

While many mortgage service companies engage in foot dragging, scores of homeowners slide into foreclosure and run out of time to save themselves through negotiations, approved sales, or refinance rescue strategies.

Loans that are sold off by the original lender get serviced by companies that specialize in collecting payments. These companies disburse your monthly funds to interested parties such as taxing authorities, insurance companies, and investors. That's why, soon after you close a mortgage or refinance and get your first coupon book, you'll receive a notice that you should start sending payments to a different company. You then need to toss out the first coupon book, and begin using the new one. The mortgage service company has replaced your primary customer service relationship with your original lender.

Making a bad situation worse

If you miss a payment, the long distance nature of the interactions can become frustrating and sometimes, financially devastating. The State Foreclosure Prevention Working Group, a consortium of state regulators and attorneys general, reported recently that a preponderance of mortgage service providers are failing in their responsibilities toward consumers. At least 70 percent of delinquent borrowers aren't being helped, despite their attempts to get help, and despite promises by lenders to rework loans and negotiate settlements to try to stem the tide of foreclosures.

Blame can clearly be placed on the service companies, which are overworked, understaffed, and poorly equipped to deal with the high volume of defaults. As a result, they delay answers when time is of the essence, or offer incompetent service when expedience and correct information is critical. There are reports of them losing documents, failing to return calls, and neglecting to contact borrowers to discuss ways to resolve payment problems. Even when buyers come forward with viable purchase contracts that can save homeowners from foreclosure, and provide a quick solution that benefits lenders and bolsters the housing market, service companies don't bother to respond.

Ruining the refinance

Sometimes, homes go to the auction block-to the detriment of consumers and lenders alike-while perfectly good purchase offers languish at the bottom of piles of overlooked and forgotten paperwork. Mortgage service companies have even promised homeowners solutions like interest rate freezes and moratoriums, only to later back out of those commitments. Meanwhile, the house in question has lost so much market value that a planned refinance is no longer possible because the property is worth less as collateral.

If you must deal with a mortgage service provider this year, expect serious delays. Double-check the information that they give you and, if possible, hire an attorney to handle important communications, complaints, and financial negotiations.