More Foreclosure Services Spawned

An increase in foreclosure activity prompted Augustus, Rae and Reed to release a guide to help troubled borrowers keep their homes. Available in electronic format or in hard copy, “The Homeowners Guide to Foreclosure Prevention” provides step-by-step instructions for curing the delinquency of a mortgage, along with all the necessary forms borrowers should submit to lenders and live support by staff of Augustus, a 14-year-old property loss mitigation firm that specializes in workout options with lenders.

“Most homeowners are just overwhelmed by the situation and are not familiar with the foreclosure process, which can put them at a great disadvantage when dealing with the lender,” Augustus founder John Reed said in an announcement. “We have made it much easier for the homeowner facing foreclosure to understand the process and to get proposed terms for a resolution to the lender.“

Shutts & Bowen LLP recently announced the launch of a “complex loan workout practice group” to serve borrowers grappling with the effects of a real estate market slowdown. As Florida’s economy faces issues resulting from residential overbuilding, shifting market demands and soaring construction, insurance and other costs, the group will advise clients on loan workouts and modifications, restructurings, bankruptcy alternatives, reorganization, capital infusion, and strategic and development alternatives for real estate in all stages of distress.

“The collapse of the subprime mortgage market is creating a ripple effect on other sectors of the U.S. economy,” said partner Lee D. Mackson, who will head the new group, in the written statement. “Foreclosure rates and mortgage fraud claims are rising, and excess liquidity in the capital markets has been keeping borderline companies afloat. As these stresses mount, we anticipate that companies in a wide range of industries will be seeking our advice on restructuring loans, reorganizing business ventures, and addressing complex contract disputes.”

Maryland’s governor, Martin O’Malley, recently announced a number of statewide initiatives to protect borrowers from foreclosure and subprime loan schemes, including the Homeownership Preservation Task Force and the creation of Homeowners Preserving Equity, or HOPE program, which will be headed by Department of Housing and Community Development Secretary Ray Skinner.

“The HOPE initiative is an innovative package of foreclosure prevention measures, combining refinancing, mortgage insurance, incentives, and homeownership counseling to make sure Maryland families can preserve the equity they have built up in their homes,” Skinner said in the announcement. “It is a proactive approach to address rising foreclosure in Maryland due to subprime loans before it becomes a crisis. We’re working to protect Marylanders’ greatest asset – their homes.”

The task force will work to prevent foreclosures in Maryland by collecting and analyzing data to plan for families’ current and future homeownership needs; identifying all available financial resources to work out distressed mortgages and developing a wide list of such resources and programs for minimizing foreclosures; recommending outreach, counseling, and educational programs for borrowers; and reviewing current laws in order to present recommendations for appropriate foreclosure protocols, including legislative actions.

In Southern California, high foreclosure activity has not yet dragged down home values in most markets, according to an announcement by DataQuick Information Systems, which monitors real estate activity. Additionally, the last six months will have more of a downward effect on prices. Last month’s home sales activity was the slowest May the region has experienced in 12 years and represented 20 months of falling activity.

So far this year, on a per capita basis, it is Nevada that has been hit hardest in all stages of the foreclosure process, according to an announcement by California-based foreclosure listing service ForeclosureS.com. The per capita reflects the number of foreclosure filings as a percent of the number of households in an area. Florida, Michigan, Ohio, Colorado, Texas, Georgia, Arkansas, and much of the rest of the Southwest have also been feeling the worst of the foreclosure pinch.

“Looking at just pre-foreclosures, before a homeowner actually loses his or her home, nationally 4.2 homeowners out of every 1,000 households faced a pre-foreclosure filing so far this year” — double the number last year at this time — and “those numbers will go even higher before they come down,” ForeclosureS.com President Alexis McGee said in the announcement.