Behind On Your Mortgage? Here's A Free Cell Phone!

Banks are often willing to lower monthly payments for people who are behind on their mortgage. But delinquent borrowers can be tough to track down -- and may not be eager to chat with their bank.

So lenders are trying some creative solutions, the FT reports.

First Guaranty Mortgage, based in McLean, Virginia, recently sent free cell phones to people who were late on their payments.

The phones were programmed to automatically call the bank, where an employee told the borrower that the bank wanted to lower their monthly payments.

“Now you’ve got their attention, because before they would never listen to you,” First Guaranty’s founder told the FT.

Another bank doubled its response rate with a simpler tactic: Hand-addressing thousands of envelopes to send out loan-modification offers.

For more on loan modifications: Read our posts from March on the Obama Administration's loan modification plan. And see what loan mods are doing to Toxie, Planet Money's toxic asset.