Homeowners say lenders should be more forgiving (Reuters)

NEW YORK (Reuters) - U.S. homeowners who fall behind onmortgage payments say lenders have grown slightly more flexiblein scheduling late payments but are less accommodating thanthey ought to be, according to a study released on Wednesday.

J.D. Power and Associates, which examines customersatisfaction and is best known for its auto ratings, surveyedmore than 11,000 homeowners. Many reported making at least onelate mortgage payment in the last 12 months.

"Despite lenders being flexible with late paymentsituations, customers still feel as if their mortgage serviceris being less considerate of their specific circumstances"relative to 2006, said Tim Ryan, a senior research director atWestlake Village, California-based J.D. Power.

The results were released as thousands of Americansstruggle to stay in their homes. Home prices have stagnated,and rates are resetting higher on hundreds of billions ofdollars of loans made when credit was easier to get.

Foreclosures have hit a record, according to the MortgageBankers Association, and 2.5 million first mortgage loans maygo into default within two years, according to Moody'sEconomy.com.

Among 38 mortgage servicers studied by J.D. Power, BB&Tranked highest, with a score of 860 on a 1,000-point scale. M&TBank Corp.'s M&T Mortgage was next with a 828 score, followedby Royal Bank of Scotland Plc's Citizens Bank with 825. Theaverage score was 798.

J.D. Power said BB&T, M&T and Citizens did well in limitingbilling statement errors, offering a range of payment options,being flexible on electronic payments, designing usableautomated phone systems, and handling customer mattersefficiently.

Countrywide Financial Corp, which services $1.42 trillionof loans, was fourth with a 824 score, J.D. Power said.

Several other large lenders, including Bank of AmericaCorp, Citigroup Inc's CitiMortgage, JPMorgan Chase & Co,Washington Mutual Inc and Wells Fargo & Co, also were aboveaverage in servicing loans.

Last month, Federal Reserve Chairman Ben Bernanke said thecentral bank is encouraging lenders to help "arrange prudentloan modifications to avoid unnecessary foreclosures."

Some lenders have already taken steps to limit problems. InApril, for example, Washington Mutual said it will refinance upto $2 billion of subprime loans for borrowers who are currenton payments but may feel stretched once their rates reset.

Ranking at the bottom of J.D. Power's study was OcwenFinancial Corp, with a 627 score. Just above it was H&R BlockInc's Option One Mortgage Corp. unit, with a score of 669. H&RBlock is selling Option One.

USAA Federal Savings Bank, a provider open only to the U.S.military and their families, had a 910 score, J.D. Power said.

The survey drew from responses of 11,481 homeowners, andwas conducted in three parts in November 2006, February 2007and May 2007.