In 2003, Vincent Garcia, a divorced father, bought a two-bedroom home in Midtown St. Joseph for $47,000. He moved in with his dogs.

Last year, seeing his work hours cut back and needing money to pay recurring medical bills for his diabetes, Mr. Garcia found himself without the money to make his $520 monthly mortgage payment.

He began fielding calls from creditors. He feared the phone. He would catch up on his mortgage and later fall back again.

“When I first bought the house, work was great. I was always working and there was overtime available. But then things piled up,” said Mr. Garcia, 55, a production worker at Johnson Controls for 34 years.

He received a notice threatening foreclosure from his lender. They offered three options.

He could offer up his home in a quick sale — selling his home, under an agreement with his lender, for less than the amount of the mortgage. He could extend his 30-year fixed mortgage under less favorable adjustable terms. Or, a third choice, he could swallow his pride and tell a stranger about his problems.

That face-to-face counseling could help him renegotiate his debt to stave off foreclosure. Mr. Garcia got a referral to a foreclosure counselor. “I didn’t want to think about losing the house, but if something didn’t straighten out soon, I was going to lose it.”

Such intervention services have become increasingly common in communities — especially in stopping foreclosure actions against a homeowner who has experienced an illness or loss of income. Demand, according to people who work in such programs, has risen by one-third this year as the foreclosure crisis appears to have worsened.

From July 2008 to June 2009, there were 915 foreclosure filings in St. Joseph, or about 2.5 per day, according to First American CoreLogic, a firm that tracks foreclosures nationwide. The data shows in June about 4 percent of St. Joseph homeowners were at least 90 days past due, and the lender foreclosed on 1 percent of those mortgages. The foreclosure rate is up by 0.4 percent, compared to 2008.

In many instances, counselors say they have an inside track with some lenders to arrange “workouts” for those homeowners who qualify. In most instances, they have stopped the home from being put in a foreclosure auction. Even when the homeowner is unable or unwilling to keep the home, the ownership may be transferred to the lender without adversely affecting the owner’s credit standing.

In March, Mr. Garcia sat in the office of Jerry Reeves, a foreclosure intervention counselor at Catholic Charities in St. Joseph.

Mr. Reeves listened to Mr. Garcia explain his reduced work hours, his illness, his sister’s illness — how everything piled up.

Mr. Reeves put Mr. Garcia on a crisis budget. He drafted a “hardship letter,” which postponed his home from being sold by the lender at a trustee’s sale. He called the mortgage lender.

They faxed a request to modify the mortgage. Mr. Garcia contacted his lender to make sure they got the paperwork. CitiMortgage, which had acquired his mortgage, was swamped by other homeowner requests. He left message after message.

Finally, on a Thursday evening, he got home from work and called again. This time, a person answered.

After nearly two hours explaining his situation and mulling options, Mr. Garcia got results. They dropped his interest rate from 7.5 percent to 5.5 percent, cutting his monthly mortgage payment from $520 to $372 — a manageable sum for him.

Mr. Reeves said lenders increasingly are reworking mortgages to enable borrowers to keep their homes so they can benefit from federal incentives.

“When lenders see some possibility of working things out, they’ll delay the foreclosure,” Mr. Reeves said. He began the foreclosure prevention office at Catholic Charities in September, using federal funds. He is a HUD-certified housing counselor.

This year, he’s helped 69 troubled homeowners — with nearly 15 percent opting to give up their home to the lender.

Mr. Garcia says things are looking up for him. He’s getting overtime at work, and though he cashed in his retirement account when he was struggling last year, he’s eyeing retirement in six years.

“People just don’t realize that their bank is willing to work it out,” he said. “They don’t want to get stuck with a house.”

Ahmad Safi can be reached at ahmadsafi@npgco.com.