People facing long lines as they face foreclosure, when Day to Day continues.

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From NPR News, it's Day to Day. Most homeowners facing foreclosure still have not been able to work out a deal with their lenders. This is according to a new report from state officials and banking regulators. One of the big problems that's holding things up - the lenders are swamped by all the calls for help that they've been getting. Marketplace's Bob Moon joins us. Bob, are banks saying, here, that they want to help people in trouble, but they are unable to keep up with demand?

BOB MOON: Yeah, that seems to be the case. It sounds pretty harsh to say, yeah, get in line, bud, if you want to avoid foreclosure, but that's apparently going on here. This report was put together by a coalition of state attorneys general and their regulatory counterparts. And it's the only public attempt, so far, outside the banking industry, to collect this kind of loan data between states.

They surveyed 13 of the biggest subprime lenders and the conclusion is that those lenders haven't been able to keep up with the number of homeowners who have fallen delinquent on their payments. It's not just the borrowers who are overwhelmed by their payments. It's the lenders now, who are being overwhelmed by the requests for help. And it's apparently not for lack of trying.

This survey did find that the number of delinquent borrowers who have been able to work with their lenders to fend off foreclosure has increased. So, that's a good sign and the report also turned up signs that the measures that the lenders are taking have been turning more aggressive. That is to say, these lenders are going beyond just to rescheduling missed payments now, more of them have actually been changing the terms of the loans, to reduce the overall burden.

CHADWICK: Well, I know I've heard from you before that indeed it is better for the lender, as it is for the borrower, if they can find some way to avoid foreclosure. It's better around for everyone. But there's just so much demand, they can't keep up with it. Are state officials able to help out with this backlog?

MOON: Well, just to give you some idea of how this can snowball. Comparing the number of loans that were modified, say, last October to the beginning of this year, these lenders were able to modify about 50,000 more. At the same time though, about 90,000 more borrowers fell behind in their payments.

So, this coalition of state officials is suggesting is that what these lenders really need to do is start trying to address this automatically on a system basis, rather than a case by case basis. Create a formula, if you will. The mortgage industry says its numbers show that it is being responsive, but the state officials say, look, they are pointing to numbers that show short-term solutions and that's why they look a little bit rosier than we do.

CHADWICK: Doesn't this begin to sound like a federal national program?

MOON: Well, Democrats in Congress are crafting legislation right now that could advance later this week and it would make cheaper government-backed loans available to struggling homeowners. But first, lenders, again, would have to get into the picture here. They'd have to agree to wipe out half of that debt. Republicans, by the way, are offering a much narrow plan - much narrower plan - than the 300 million dollar program than the Democrats are promoting here.

CHADWICK: Thank you, Bob. Bob Moon of public radio's daily business show, Marketplace.

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