Contractors, brokers and lawyers make good money in bad times for real estate.

Tough times in the real estate industry mean booming business for Michael S. Buescher, a Trabuco construction contractor who specializes in cleaning and fixing up repossessed homes.

As more property owners fail to refinance or repay their subprime loans, Buescher's pay days are getting bigger and bigger.

In Orange County, the number of foreclosures through May hit 1,031 – seven-fold the number a year ago. Default notices soared 121 percent, to 4,520 homes, during the first five months of the year.

"We get more every day," Buescher said. "We've been waiting eight years for this to start happening again."

Buescher, 49, was building a $1.5 million spec home in San Clemente in February when a call came from a Realtor friend offering a job at a foreclosed home in Mission Viejo. As more rehab offers trickled in, Buescher felt almost like he was back in the good old days of the '90s, the last time Southern California's real estate market tanked. During that era, he employed five crews to spiff up an average 30 repossessed homes a month.

So far this year, business has taken Buescher to dozens of trash-outs and fix-ups in Orange, Riverside and San Bernardino counties, to gated communities and rat-infested crack dens, all united under the title "real estate owned" or "bank repo."

"This is more fun than building houses," he said as he admired his crew's handiwork at a foreclosed four-bedroom, three-bath split-level home in an unincorporated area near Tustin. "I can make more doing this than on homebuilding. This is quick turnover. You don't have to wait eight months to get a permit. The cash flow keeps coming."

Buescher is far from the only person profiting from a real estate market troubled by slack sales, sagging prices and soaring defaults.

Data services like Irvine-based RealtyTrac charge for shoppers to see listings of distressed properties. As the number of listings jumped to 1.1 million in June – up from 700,000 a year ago – the Web site's traffic for its nationwide listings soared to surpass an average 2.5 million monthly visitors, double its numbers in 2005.

"We believe services like ours streamline the (distressed sale) process and take out the leg work," said Rick Sharga, RealtyTrac's vice president of sales.

The Tri-Star Group, a Fullerton development company, hired Joseph Baleto as a "foreclosure adviser" in January. It was a new line of work for Baleto, a Realtor since 2004, a period when the market has known only good times. His assignment: Buy properties at auction to renovate, "bring out the original luster" and resell.

"Inventory is up, which is great on the one hand because there's a lot of property to pick from," Baleto said. "On the other hand … you really have to have a product that stands out, and you have to have it priced correctly in order for it to sell."

Mike Roberts, a real estate agent and radio host, has revived his Laguna Niguel company Trust Solutions Inc., which offers homeowners who are upside-down on their loans a legal method for selling their property without having to go through lender approval. The process, Roberts said, has the advantage of getting the seller out of an unaffordable loan without the penalties of a foreclosure or short sale. For buyers, it can mean acquiring homes at a lower property tax rate.

So far this year, Roberts said Trust Solutions has negotiated one or two deals a month. But he expects business to pick up as more homeowners find themselves underwater.

"I suspect by late summer we'll be doing one a day," he said. "That's what we were doing the last time the market was in trouble in '94, '95, '96 and early '97."

Patti Donovan, president of Stearns Asset Services, a Santa Ana firm that manages and markets real-estate owned properties, said she got back in the business last year after a four-year hiatus when the market was hot and she "pretty much played a lot of golf." Donovan, who started in the foreclosure business in 1984, said she expects the down market to last three to five years.

"The difference this cycle is it's not the economy that's causing this to go upside down," she said. "It's more the types of loans – 100 percent financing, adjustable rate mortgages. Before, it was people losing jobs. Now it's just people borrowing too much."

Robert Rosenthal is a San Fernando Valley attorney who specializes in evicting tenants from foreclosed homes. He expects a lot of jobs over the next three or four years as more people lose their homes.

"With this market now, my guess is we're in the first or second inning of a nine-inning baseball game," he said.

As banks accumulate more property, they hire managers to coordinate contractors, maintenance crews and payment schemes for insurers and tax bills. They also seek out home sellers who specialize in distressed property, like Staci Treloggen, who heads the real-estate owned group at Prudential California Realty in Laguna Niguel.

"Banks outsource to people like me," Treloggen said. "I need people like Mike (Buescher) to staff up."

Treloggen assigned Buescher and his five-man crew to an abandoned home at 17571 Rainier Drive in an unincorporated triangle between Orange, Tustin and Santa Ana. Public records show Wachovia Bank foreclosed on the property in May. The asking price is $762,500.

When Buescher and his crew arrived, the swimming pool was a mosquito breeding ground; bird cages and bales of hay littered the yard; the garage closeted a mountain of papers, clothing, toys and other trash.

After two days' work, the four-bedroom, three-bath 1959 split-level home looked neatly trimmed and vacuumed.

Buescher typically proposes a cleanup plan in several stages. He charges $500 for a barebones job to rekey locks, install smoke detectors and secure a house from intruders. He can tell if a house has been broken into if there's a rush of air when he opens the front door, because it means there's an opening somewhere else.

After securing a property, his job escalates to the "trash out" – filling dumpsters with yard waste, clothing, toys, appliances and furniture abandoned by tenants. Items worth more than $300 – cars, boats, fur coats – must be stored for 19 days for the owners to claim. Few people come back, Buescher said.

"It's amazing what people leave behind," he said. "I see wedding albums. That usually means a divorce."

For some reason, he said, tenants almost always walk off with shower heads. Many rip out counters, air compressors and other fixtures that belong to the bank. Sometimes neighbors join the looting.

"If the air compressor is gone, the first place I look is over the fence," he said.

It's not Buescher's business to understand why people lost their home. To encourage renters to leave, he'll offer a few hundred dollars. If he finds a squatter, he'll ask the cops to arrest them for trespassing.

If the bank agrees to pay for it, Buescher will repaint the walls and replace the carpets. He recommends neutral, vanilla colors to avoid turning off potential buyers.

As the repairs get more complex, Buescher's fees escalate. Granite counters, a reshingled roof, new wiring – they all make his cash register ring.

"My job is to convince the client to spend more money to sell the house," he said. "But at this point, the banks aren't willing, because the market hasn't hit bottom."

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Sacramento's owner-occupied housing market -- one of the most troubled major housing markets in the nation -- has become a big challenge for the market's rental sector.

Troubling oversupplies and dwindling numbers of qualified rental applicants are exacerbating conditions for property owners and management companies alike.

However, the state capital's rental market still stands a much better chance of becoming more vibrant sooner because it does remain relatively more attractive to renters -- rents are flat or rising slowly, and the market is sustaining flat, but not rising, vacancy rates.

Novato-based RealFacts' data base includes properties with 50 or more units and puts the average rent at $910 for the first quarter of 2007 in Sacramento County. That's a 2.1 percent increase over the $892 average from a year earlier. The data base consists of 305 apartment complexes and about 61,000 units, two thirds of which are Class C units, the remainder Class A and B units.

For the larger Sacramento Metropolitan Statistical Area (Sacramento-Arden-Arcade-Roseville), RealFacts said rents averaged $949 in the first quarter this year, also up 2.1 percent from $930 a year ago. The MSA data base consists of 396 properties and more than 77,000 units, of which nearly two thirds are Class C units.

Both the county and MSA revealed an average vacancy rate of 7.2 percent during the first quarter this year, little changed from the 7.3 percent rate a year ago.

Landlords aren't breathing easy, nor are they gasping for air.

Generally among all properties, concessions are passé and property owners aren't being forced into rental contracts they don't prefer.

The rental market suffering is largely fallout from Sacramento's owner-occupied housing market.

"I've seen a lot of ups and downs and I don't want to sound like a pessimist, but this one is different. The run up in (home) prices was more protracted than I've seen before. It (the boom market) has never been quite as steep and quite as long before," said Jim Price, owner of Calvesco Services, a small property management firm with rental houses in Central, West and South Sacramento.

In the first quarter this year, among the nation's 285 Metropolitan Statistical Areas, only Punta Gorda, FL, stopped Sacramento from finishing dead last in housing appreciation -- or, rather, the lack thereof, according to the Office of Federal Housing Enterprise Oversight (OFHEO).

OFHEO said in the first quarter this year Sacramento home prices declined nearly 2 percent in just three months since the last quarter of 2006. Since the first quarter of 2006 the rate of decline was more than double that, at 4.4 percent.

"Sacramento had 681 sold homes in May at a median price of $325,000. Last May the median price was $339,500 for a difference of 4.27 percent," said Stockton, CA-based Advanced Realty & Mortgage's Marty Hackworth, reporting to RealtyTimes Market Conditions report for Sacramento.

Sacramento's home prices peaked in mid- to late-2005. By then many prices were more than double what they were five years earlier. Home prices are sliding, but they remain more than 80 percent higher than they were five years ago, boosted by the same housing boom that captivated the nation.

However, since 2005, the same mortgage teaser rate-resets, mortgage money-tightening, investor-flight, over-supply and foreclosure conditions that have gripped the nation have been especially rough on Sacramento.

"We don't have to compete with condos (renters becoming buyers) now as sales have dropped off, but two years ago some of those units converted from apartments to condos are now turning back into rental units and we have to try to absorb those units," said Dave Tanforan, a property manager with G.W. Williams and on the board of directors with the Rental Housing Association of Sacramento Valley.

The property management company has a portfolio of more than 1,000 garden-style apartment complexes throughout the region.

A total of more than 3,000 condos were converted to apartments during the 2005-2006 period, according to Hendricks & Partners, a Phoenix, AZ-based apartment brokerage and research firm.

"In this period, we don't have an equilibrium and it's been favoring the tenants in the past few years. We've ended up with a large vacancy rate because of condo conversions just about everywhere," said Steve Nelson, a partner in the Sacramento office of Hendricks & Partners.

The California Association of Realtors says Sacramento's home sales are down 15.7 percent just from March to April this year and down 27.6 percent from a year ago, as the number of listings has soared into the teens of thousands.

Likewise, the number of foreclosures has increased dramatically in Sacramento, up 184 percent in the past year ending in the first quarter, compared to 148 percent for the state of California and 102.4 percent for Northern California, according to La Jolla-based DataQuick Information Services.

A sprinkle of credit-ruined foreclosure fallout may be landing in the rental market.

"I haven't had to drop my rent, but there's a lot less activity and a lot fewer qualified applicants. I'm not looking for the first warm body coming down the street, but I can't take people who can't pay the rent," says Price who has managed only a $50 increase on his $900 to $1,000 rents for single family homes and duplexes he manages.

"I see this harder-to-qualify problem continuing at least a year," said Price, who also on the board of directors with the California Apartment Association.

Michael Force, president of Westcal Management, says the dearth of qualified rental applicants has nearly doubled in his neck of the woods, the Sacramento metropolitan area.

"We have strict criteria. It's seven or eight out of 10 (who don't qualify). It was better. It was four or five out of 10," said Force who manages apartment complexes representing some 2,000 units.

Force, also president of the Rental Housing Association of Sacramento Valley, added, "It's pathetic. I've heard some of the big boys talk about 8 and 12 percent vacancy rates. We are seeing 8 percent vacancy rates and that's the highest we've had in 15 years."

But there's also some positive fallout from the beleaguered owner-occupied sector -- Sacramento is left with an over supply of tough-to-afford homes. That could help send the rental bear market into hibernation.

Aaron Frederick, an analyst with Marcus & Millichap says the difference between the monthly payment for a median-priced mortgaged home and the average rent for a two-bedroom, two-bath home, makes the rental cheaper by more than $1,400.

Renting for that much less than buying can put tenants in position to invest, save for homeownership later, or recover from lost homeownership now.

"That's good news for the rental market. Renters can have some disposable income rather than be house rich and life poor. They can enjoy their lifestyle without sacrificing the cost of putting a roof over their heads," Frederick said.

Low, slow moving rents, along with an abundance of vacancies together concede to renters the freedom of choice, while also allowing property owners to step back from concessions and other giveaways.

And while sellers may be squirming, those still in a buying state of mind may have found a mother lode -- or a candy shop.

"The lenders requirements have become more stringent, that is for sure, however, any buyer who can and does qualify is going to have the time of their lives. It's like being a kid in a candy store … tons of homes to choose from and great prices," said Elk Grove, CA-based Coldwell Banker.

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And this year, there was good news and bad news in the springtime for both buyers and sellers.

First, the bad news. The intense boom of the 1995-2005 decade has plainly petered out. Anyone who buys a California home and expects to make a 20 percent profit in less than one year – the same kind of expectation fostered by the dot-com stock balloon of the late 1990s – is in for a serious disappointment. In the most heavily populated parts of the state, there will still be profits, but they will be in a more normal range, about four or five percent per year.

That is also the good news. For while the rest of America, places like Miami, Denver, Houston, Phoenix, Boston, Washington, D.C. and other boom markets of the last 10 years are suffering declines, that’s not true in most of California.

Yes, there have been small declines in some relatively overbuilt parts of this state. In the third quarter of last year, home prices in Orange County dropped by 0.8 percent – less than one percent – from the previous year. In Sacramento, the drop was about 3.5 percent and in San Diego County approximately 2.1 percent.

 Those figures come from the California Association of Realtors and its parent, the National Association of Realtors.

But in places where homes have not been overbuilt, or where in-migration continues at a fast pace, prices are still rising slightly or just staying flat. That’s also true in places that are built out, with little hope for new housing that isn’t constructed on the sites of previously existing homes.

Examples of these phenomena are Seattle, with a 14.6 percent price rise during last year’s third quarter, and the Inland Empire area including Riverside, San Bernardino and Ontario. Prices there were stable, even as the number of houses and condominiums sold was down. Reason: Many people who expected to make a quick profit pulled homes from the market when they realized windfalls weren’t coming.

In the Los Angeles-Long Beach market, buyers paid 5.2 percent more this spring than a year earlier, and in San Francisco they paid an average of 3.8 percent more.

None of these positive numbers will blow investors away. But they ought to be comforting to recent homebuyers who paid top dollar and worried they might lose equity they saved for years to create.

In fact, price increases have slowed gradually for most of the last year all over California, but the state has been spared any precipitous drop. It’s one thing not to be making windfall profits. But it’s no disaster when prices remain fairly stable while wages and salaries gradually catch up with prices that have risen sharply for about 10 years. That kind of pause can even be constructive, as it both allows a new cadre of homebuyers time to save up the down payments that can get them into the market and it creates some stability in communities where opportunistic buyers have moved in and then moved out again in short order, taking tens of thousands of dollars in profits with them when they left.

It’s also a familiar part of the California real estate cycle. Booms in California generally last eight to 10 years, followed by leveling-off periods of about four or five years. This was true during the 1960s, ’70s and ’80s, with the approximately 15 percent average price drop of the early 1990s the only aberration.

Immigration is the reason this state rarely experiences true busts after its booms. The more people pile into California, the greater the demand for housing. Demand begins at the bottom of the price scale, but when owners of the cheapest housing sell to newcomers at a profit, they suddenly gain the ability to move up to a new level. This propels the homeowners from whom they buy yet another step up the ladder, right on up to the level of multi-million dollar homes.

That’s something for those who decry either immigration or population increases to think about.

The bottom line: California is not in a real estate crisis and doesn’t figure to be in one very soon.

Realtors in the 1970s and ’80s often told their clients that “No one ever lost money on California real estate.” After the bust of the ’90s, this statement is not longer completely correct. But it’s a truism that’s still at least close to being true.

www.smmirror.com

Your decision to be a California first time home buyer is both a sound financial decision and a commendable achievement. But before you start here is some home buying advice that helps put you in your dream home.

Buyers of Calfiornia real estate should not feel overwhelmed at the process of purchasing their first home. A professional, patient lender who specializes in loans for first time home buyers will take the time to educate you in the loan process is advised.

When you first meet with the lender, bring all your 'dumb- questions. Again, a lender who deals with first time home buyers will be more equipped to answer all your questions and ease your fears. An experienced loan consultant will guide you through the loan process and make your dream of owning California real estate a reality.

Many lenders have 100% loans available to first time home buyers who do not have enough money for a down payment. Our research has even found a 100% loan which only requires a 'stated income-.

A stated income is different from a 'verified- income where the lender will require current pay stubs to verify your income. With a stated income loan, the lender will accept what the borrower 'states- as his or her income. The stated income must be within reason. You can't say that you are a fast food cashier who makes $60,000 per year.

Our research also uncovered a first time home buyer, 100%, stated income loan which requires no reserves. A reserve usually refers to monthly payments. If a lender requires 2 months reserves, they are looking for 2 months P.I.T.I. (principal, interest, taxes & insurance) in a liquid account.

Your FICO (credit) score is very important for first time home buyers of California real estate. Our research discovered that the above described loan qualified with a FICO score as low as 640! The higher the FICO score the more programs available for first time home buyers. We found some good loan programs with FICO scores as low as 620, but with the lower FICO score, you would lose some perks like no reserves or some stated programs, etc.

www.pr-inside.com

RISMEDIA, June 22, 2007-California's real estate downturn will be deep and long lasting, with home prices falling 15 to 30% during the next 36 to 42 months, according to a real estate expert.

Bruce Norris, who correctly forecast both the real estate boom that began in 1997 and the subsequent doubling of home prices, said the downturn will reflect a perfect storm that includes record numbers of foreclosures, a sharp decline in migration to California, substantial increases in unsold inventory, and, of course, falling prices.

"We are in for a very rough ride in California's real estate market, which is likely to be far more severe than analysts, state officials and real estate industry associations have acknowledged," Norris said, adding, "Foreclosures alone are likely to be more numerous than anything we've ever experienced, with bank repossessions ultimately accounting for as high or as many as 25-30 percent of all homes sold during the next three years. But like any storm, this, too, shall pass."

Speaking to more than 100 real estate investors, brokers and analysts attending a Bay Area Wealth Club meeting at the Mill Valley Community Center, Norris said prudent investors need to arm themselves with the facts and come to terms with the fact that analysts, state officials and the California Association of Realtors are either not being frank about the severity of the coming crisis or they simply aren't looking at the right categories of statistics.

But while Norris' outlook is gloomier than most observers for the short term, he expects California real estate prices to again rebound in 2011 as foreclosures decrease, the number of homes for sale declines to a manageable level and as California again experiences a net increase in population migration from other states.

"There is light at the end of the tunnel," Norris said, "but we have to be very careful in this market environment. Homeowners need to know they can no longer treat their homes like ATM machines because the market will no longer provide them with the appreciation levels they enjoyed in recent years. They need to know that the payback on real estate investments is going to be much longer than they're hearing on news reporters. Investors, for their part, need to know that marginal deals are no longer acceptable. The market will no longer cover their investment mistakes. If they don't know what they're doing, they need to stay out of the market until conditions change."

The trouble with the analysis given by most real estate observers is that it's based on flawed assumptions, including the widespread belief that interest rate adjustments can somehow hold back the looming real estate crisis.

"Interest rates alone do not determine the direction of prices," Norris said. "Look what happened the last time we had a real estate downturn in California. Interest rates were actually lower in lower in 1997 than they were in 1990. Yet prices declined by as much as 35 percent in some areas."

The most reliable indicator of a downturn in California is low affordability. Historic affordability lows signaled the previous two real estate recessions and prevented inventory from selling quickly.

"We still have strong employment and historically low interest rates," Norris said, "yet we continue to see the inventory of homes soar, even as builders lower prices and give huge sales incentives. This change in the market caught economists off guard because they said that without an increase in unemployment, you can't have a real estate downturn. That wasn't true!"

Centex Corp., Hovnanian Enterprises, Pulte Homes, Lennar and D.R. Horton together have written off more than a half-billion dollars worth of land option agreements during the past year, Norris said, citing published reports. "If prices were heading upward and if demand for housing was strong, they wouldn't be walking away from these land option agreements," he said.

Most people, however, are still being misled my misinformation that is being fed to the news media.

"Many economists and real estate observers and even government officials continue to offer rosy assessments because they are under political pressure to say nothing or because they are simply looking at the wrong statistics. Trouble is, there are many investors, including builders, who have been misled by their commentary," said Norris, who himself serves as a hard-money lender through his Riverside, California-based company, The Norris Group, which has provided nearly $150 million in loans on residential properties in Southern California.

Various organizations are deliberately misleading investors and the general public, Norris said, adding that the National Association of Realtors (NAR) launched a $40 million ad camping in January of this year in which they told buyers that now is the perfect time to buy a home.

Even more recently, Jeff Davi, commissioner of the California Department of Real Estate, is quoted in this month's issue of California Real Estate Magazine saying that California continues to need another 250,000 single and multifamily housing units to be built each year.

"If this was truly the case," Norris asked, "why are we seeing vacant properties, increasing housing inventory and builders walking away from millions of dollars in land options? The reality is that the real estate market in California is going to get a lot worse before it gets better."

The good news is that the market should turn upward again in 2011. By then, Norris said, prices will be low enough to lure many people back into California again, lenders will have again adjusted their lending guidelines and investors will again re-enter the market, sensing bargains and opportunities for additional profits and equity growth in the years ahead.

Bruce Norris is an active investor, hard-money lender and real estate educator who serves on the Board of Directors of Chapman University's Roger C. Hobbs Institute for Real Estate, Law and Environmental Studies. A popular talk show host in his hometown of Riverside, Calif., Norris is a frequently quoted in financial publications and a speaker at investor club meetings throughout California. His latest study, The California Crash, was
released in January 2006 and provides the statistics that substantiate his predictions.

More information about Bruce Norris, his research and his investment seminars is available at http://www.thenorrisgroup.com.

Jun. 20--WASILLA -- Most people don't welcome a visit from the FBI.

But with mortgage fraud scandals making the rounds, the Valley Board of Realtors invited a special agent from the Federal Bureau of Investigation for a chat. Agent Mike Thoreson visited the board at a regularly scheduled meeting recently as part of the FBI's wider effort to educate real estate professionals about what constitutes fraud. "I would rather have everybody know that things are illegal if they're not quite sure and not have that kind of work to do, because there's plenty of other work to do," Thoreson said by phone Monday. The Valley board's membership includes 465 real estate professionals representing a range of companies.

Thoreson said he is trying to educate real estate agents and others in hopes they'll carry the message to individual buyers who are on the front lines of fraud. "You want to look out for people who are out there trying to buy homes," he said. "They really don't know they're getting suckered into something." National mortgage-fraud scams, particularly cash-back deals, have raised alarms around the real estate community in Alaska. Cash-back schemes tend to flourish in places like the Mat-Su and Anchorage, where a hot real estate climate has slowed down. Sluggish sales mean more days on market for homes awaiting sale.

Buyers or real estate agents offer tens of thousands over the a king price. The seller agrees to give the extra money to the buyer. An appraiser provides the inflated price to the lender, which is illegal. The buyer thinks they're getting, say, a $100,000 home and $20,000 in their pocket, Thoreson said. "They're really buying a house for $120,000 that's only worth $100,000." Plus, they're saddled with a mortgage larger than the house is worth. Last year, the FBI and federal tax agents broke up a different kind of fraud ring. Seven Anchorage residents pleaded guilty to wire fraud in a case that involved deceiving mortgage lenders by overstating income or making other false statements on loan a plications, as reported May 3 in the Daily News.

Thoreson said he couldn't comment on any ongoing cases or any scams specific to the Mat-Su. Generally, he said, if it's happening in the Lower 48, it ends up here. That includes flipping and undisclosed incentives. Flipping involves a seller or agent finding an appraiser to inflate the value of a home, an act easier to accomplish in a hot real estate market. The unsuspecting buyer then gets hit with a whammy when they eventually try to sell the house. Flipping can domino into inflated values throughout a subdivision if enough homes are involved. Incentives provide the seller with a means with which to entice a buyer.

For example, an offer to sell may include a new car. That's fine, provided the car -- or boat, or cash -- is disclosed to the lender. The FBI likes to see incentives disclosed in earnest money agreements as a transaction gets serious, but they have to be disclosed in the escrow agreement, Thoreson said. "What I always argue is, what's wrong with disclosing everything?" he said. "If the lender knows everything, then it's their call. If they want to lend money on more than a home is worth because of incentives or cash-backs, that's coming out of their po ket." The Valley Realtors group appreciated the agent's advice -- and the FBI's presence keeping an eye out for fraud, said board president Russell Joyce of Lee Realty LLC in Wasilla.

"They're here, they're watching and it's great," Joyce said. "We want to weed the bad apples out."

www.mortgagenewswatch.com

Sacramento, California, real estate experts are reporting the area as a buyers market with slightly dropping prices.

One report indicates, "Most of the listings in the Sacramento area have been listed too high for the present market conditions and is evidenced by the daily downward price adjustments and the large inventory of homes on the market."

A stabilization is expected for the short term in the Sacramento market, however. While appreciation rates had been around 18 percent annually, they are expected to return to a very healthy 3 to 5 percent rate.

The average days on market is "improving" and sellers can expect to receive 90 to 100 percent of their asking price. As in many other markets across the nation, pricing right when the home first goes on the market can be key to moving the property.

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In the first three months of this year, mortgage lenders sent out 46,760 default notices to California homeowners. According to Data Quick Information Systems, that is the highest number in a decade. The forecast doesn’t appear much better for some current homeowners -- many are or will soon face the possibility of foreclosure.

Now, aiming to clean up the aftermath mess, lenders are demanding better documentation before financing loans such as the "piggyback" mortgage. These are loans that were taken out in addition to the first mortgage by home buyers who otherwise couldn’t afford the property. Some lenders are no longer offering "piggyback" loans at all.

The consequence of consumers not completely understanding and yet still wanting to get in on the American dream of homeownership at any cost is creating painful learning experiences.

"Misunderstanding, unscrupulous brokers, predatory lending -- there are all kinds of factors as to why we have and project more foreclosures now and in the future," says Rick Harper, Director of Housing for the Consumer Credit Counseling Service of San Francisco.

The San Francisco CCCS is part of the Homeownership Preservation Foundation. Beginning at the end of June, the Foundation through the national Ad Council is launching a 25-million-dollar campaign aimed at making homeowners who are facing foreclosure aware that there is help available by calling (888) 995-HOPE.

"That particular program is funded by the stakeholders, the lenders, the insurers, and private foundations that are trying to get the public in touch with housing counseling agencies such as ours so that we can help them sort out whatever remedies might be available for them," says Harper.

Harper says the agencies can help identify where the trouble began and how to fix it. He says sometimes the pending foreclosure is a result of not budgeting very well or sometimes homeowners are paying the wrong debt. "In other words, they’re putting the home at risk by how they’re allocating their money to their other creditors," says Harper. "One of the overriding messages we try to get across is that there are many, many things that can be done if the homeowner steps up to the plate and says ‘I need help.’ Whether they call their servicer, their lender, the HOPE line, or whether they call their local Consumer Credit Counseling service agency for help -- there is help available free of charge," explains Harper.

While asking for help doesn’t ensure the prevention of a foreclosure, Harper says, there are many cases where the help provided is enough to help homeowners get back on track and save their home.

"We have many instances of being able to help them put the pieces together. The lenders will offer a variety of remedies: a repayment plan, loan forbearance where [a homeowner] might actually be able to skip a payment or make a half-payment for a certain period of time," says Harper. He adds that in certain circumstances such as a permanent change of an ability to pay, such as with job downsizing that involves a reduction in salary, lenders can modify the mortgage "and even extend the term back to 30 years to get your payment down to something that you can now afford with your new income."

Another important step is to make sure that you are working with experts in this area. Licensed real estate agents who are experienced in handling foreclosure-related transactions can provide great assistance in getting your home sold before it’s foreclosed upon. Ultimately, this can not only help the defaulting homeowner but also help preserve the community and values of other properties in the area. Properties in foreclosure often sit in an abandoned condition and provide opportunity for crime and vandalism. One study revealed that for every foreclosure, the value of houses within one block dropped one percent in one year.

It’s imperative to watch out for people who are preying upon vulnerable homeowners. A pending foreclosure can attract some people who are hoping to capitalize on the homeowner’s financial difficulties. Visit the US Department of Housing and Urban Development’s website for a look at some typical scams as well as what can be done to avoid foreclosure.

The process of foreclosures varies from state-to-state. Check with your local real estate agents, non-profit housing agencies and credit counseling services for more information.

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