A month ago, Heather and Don Marx were afraid they would lose their Forest Lake home. Overnight, the couple's adjustable-rate mortgage jumped from 6.7 percent to 9.7 percent, taking their monthly payment from $2,465 to $3,600.

Heather Marx pleaded with her lender to consider a lower rate, but the company wouldn't budge. Instead it said it might raise the rate another 3 percent in six months.

"We told them the new payment would be very unaffordable for us," Marx recalled. "I said, 'I don't want to lose my house. I have six kids that rely on me to keep a roof over their head, and you're trying to take it away. All I'm asking you to do is give us a fixed rate that we can afford.' And they just said, 'If you look at your terms, it says we can do this.' There was no budging them."

After receiving a tip from a real estate agent, Marx turned to the Washington County Housing and Redevelopment Authority's (WCHRA) fledgling Mortgage Foreclosure Prevention Program, which was established three months ago to help residents navigate the foreclosure process and, ideally, keep their houses.

Marx spoke with Karen Johnson, one of two foreclosure prevention counselors the county hired earlier this year.

Johnson, who has worked as a foreclosure prevention counselor for seven years, explained the foreclosure process to Marx family, showing them how to strengthen their argument and helping them directly negotiate with the lender.

The result: this weekend Heather Marx received a phone call informing her that she would now have a fixed-rate mortgage locked at an affordable 7 percent.

"Hearing that, it felt like heaven," she said. "Your kids listen to you talk, you know, and my 7-year-old recently came up to me and asked, 'Mommy, are we going to lose our house?' Do you know how tough that is?"

Marx said she wouldn't have known what to do without Johnson's guidance and support.

"She kept saying, 'You need to call them, but I'm going to help you, and I'm going to really go after them, because I know what to say and I know how to do this,'" Marx recalled. "I was like, 'How much do I pay you?' and she said, 'Nothing.' ... They're just awesome, and I would recommend them to anybody who needs help negotiating with a lender."

WCHRA Deputy Executive Director Rich Malloy said the Marx family is not along. The Mortgage Foreclosure Prevention Program is part of a state initiative to combat rapid growth in the number of home foreclosures. Since the program opened its doors on March 1, it has counseled 161 households.

"The foreclosure problem has always existed, but it has multiplied in recent years, particularly in the Twin Cities metro area," Malloy said. "Counties around here are seeing four, five, six, seven times as many foreclosure as they saw four or five years ago.

"In 2004, there were 170 foreclosures in Washington County; in 2007, there were 878; and at the rate we're going, we're looking at around 1,200 in 2008," he said.

Malloy said the program, when it is successful, is a win-win for both homeowners and mortgage lenders, since both parties have a lot to lose in the foreclosure process.

"Foreclosure is costly for both the homeowner and the lender. Obviously, the homeowner stands to lose their house and all the equity they've put into it. And, generally, the lender would much rather have someone paying the loan back, even if that's at a slightly lower rate, than to have to unload a home at a fraction of its value. ... That's really a lose-lose for everybody."

Johnson said people who fear they might be in danger of losing their house should be proactive, instead of waiting until they get behind in their payments.

"There are a lot of things we can help people do, but sometimes they don't come to us until it's too late," she said.

According to Johnson, the first thing concerned homeowners should do is communicate with their lender and explain the situation, after they have researched their mortgage agreement and organized their finances in a way that shows the lender what they can afford.

"Communicate with the lender. Call them up and find out what kind of options you have. ... Go through your finances and figure out what you can afford, and how you can present that information to your lender to negotiate for a work-out."

And if Washington County homeowners need help doing that, Johnson and Malloy said they now have a number to call.

"It's rewarding to be able to help people in situations like this, and a lot of times there are things that can be done, even if most people aren't aware of them," Johnson said. "The most important thing is getting the ball rolling before it's too late. No one wants to see a foreclosure, especially one that could've been avoided."

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To speak with a Washington County HRA mortgage foreclosure prevention counselor, contact Karen Johnson at 651-458-0936 ext. 553 or kjohnson@whcra.com, or Pao Yang at 651-458-0936 ext. 551 or pyang@whcra.com.