One bank is playing Santa for 500 lucky homeowners in this season of foreclosures and sinking home values — no mortgage payment next...

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One bank is playing Santa for 500 lucky homeowners in this season of foreclosures and sinking home values — no mortgage payment next month.

ING Direct forgave $861,513.25 in January mortgage payments — or an average $1,700 per household — for the 500 customers who won the online bank’s essay contest.

ING Direct canceled its holiday parties this year, said spokesman Jeff Mirabello, partly offsetting the cost of the contest. There was no staff vote on the decision, but employees weren’t upset, said Scott Lugar, head of consumer lending, who administered the program.

A committee within the direct bank and thrift, owned by the Dutch financial-services giant ING Groep, chose the winners from nearly 5,500 homeowners who sent in a 250-word essay.

“We said tell us your story,” Lugar said.

Not included among the winners are any of about 250 customers now in the foreclosure process, he said. Rather the winners were those whose stories struck the committee as particularly compelling.

Christine Feterowski, of East Bridgewater, Mass., got a phone call Dec. 5 from ING Direct saying the bank would pay her January mortgage payment of just over $1,500.

“I started crying,” she said. “I told them I was in shock.”

She, her husband and 16-year-old son used the money to fly down to Florida for her older son’s college graduation. The money comes at a good time for Feterowski, who has been unable to work due to bladder cancer. She has major surgery scheduled Jan. 9.

She said her husband planned to take two or three weeks of unpaid leave to care for her.

Great timing

“It couldn’t have come at a better time,” she said. “It’s been such a struggle for us the last couple months with chemo, saving up money to go down to my son’s graduation.”

The couple have never been late on a mortgage payment, Feterowski said.

Another winner, Matthew Botos, wrote on his blog that he was a winner of ING Direct’s “own little bailout contest.”

“I figured they’d get plenty of sob stories and I’m already paying $700 billion to bail out irresponsible borrowers and lenders, so my essay implored them to take a contrarian view and reward a responsible citizen,” he wrote.

He posted his winning entry, in which he states: “I personally have lived within my financial means, made savings a priority and accepted the necessary sacrifices. My mortgage is still small; my car is old but paid off, and I’ve eBayed old electronics to fund new toys without ever carrying a credit-card balance.”

Evictions suspended

ING Direct also announced in November it was suspending evictions through Jan. 15 and halting foreclosure sales through the end of March.

The company said about 250 of its customers have seriously delinquent mortgages — more than 90 days past due — while 1,300 borrowers are 90 days past due on their payments.

Fannie Mae and Freddie Mac, the mortgage-finance companies, have similar halts on foreclosure sales and evictions in place through Jan. 9.

Of the top 25 lenders in the country, only ING Direct, Fifth Third Bancorp and AmTrust Bank in Ohio have seen increased mortgage activity through September of this year.

ING Direct has 1.4 percent of the residential-mortgage market in the U.S., or mortgage volume of $17.54 billion, according to Inside Mortgage Finance. It said it had about 83,000 home-loan customers.

In October, the Dutch government granted ING Direct’s parent company a 10 billion euro ($14 billion) lifeline to prevent a run on the bank. Several other Dutch banks also got capital injections.

Last week ING Direct held gatherings in its main offices in Wilmington, Del.; Saint Cloud, Minn.; and Santa Monica, Calif., to read a few winning entries to employees.

In Wilmington, Lugar played a recording of a phone call to a customer.

“There wasn’t a dry eye in the place,” he said. “This is so much more fulfilling than putting on my monkey suit and drinking wine with my colleagues.”