Finance Space

Foreclosure prevention is a messy business — more art than science. Here, an inside look at why some people get a loan workout and others don’t.

NEW YORK (CNNMoney.com) — More than 3,000 times daily, struggling homeowners call the foreclosure Help Hotline for advice on how to save their homes.

And so begins the complicated and time-consuming foreclosure prevention process. Working together are mortgage servicers – the companies that manage the loans – and the borrowers, with foreclosure prevention counselors often acting as go-betweens.

Todd Coffman thinks he’s a good credit risk — but because he’s studying at a community college, the banks suddenly seem to think otherwise.

Coffman, 28, is halfway through a two-year X-ray-technology degree at Bellevue Community College. In the past year, he took out about $4,500 in federally subsidized student loans through Citibank.

But turbulent credit markets prompted Citibank and other banks in recent weeks to stop offering student loans at many community colleges across the country, including BCC. When Coffman recently put in his paperwork to get next year’s loans, the college told him Citibank was no longer an option. The same thing happened with a second lender. Finally, he obtained a student loan through Wachovia.

MILWAUKEE – Several lenders say they will no longer give loans to students at Wisconsin’s 16 technical colleges and 13 two-year colleges.

The decision reflects a national trend among lenders who say loans to students at two-year colleges are not profitable because students borrow less money for less time and thus pay less interest.

College officials say they have been told Citibank and Chase will no longer offer loans to their students. Two other lenders, TCF Bank and Student Loan Xpress, say they are halting all student loans.