If you’re reading this post, the housing crisis has gotten your attention. In fact, it’s likely that the crisis has become “personal” for you.

If you are one of the almost 100,000 Californians who received a Notice of Default in the past month, you are dealing with some strong emotions like fear, embarrassment, frustration, despair, and anger. Not nice! These can do a ton of damage to their life – OR, they can propel you into action to defend yourself, protect their family and save their home!

This is not for the faint of heart. You have now embarked on a journey through foreclosure, CA-style. So, suck it up and get ready to get even more uncomfortable, for a good cause – YOU!

Never in history has so much wealth “evaporated” as rapidly as in this U.S. housing market meltdown. It’s a global problem as mortgage-backed securities and derivatives are traded on stock exchanges worldwide. Approximately 15 million Americans purchased homes at the height of the housing bubble (from 2004-2006)…an estimated three million of those in CA. Today they (read “YOU”) find themselves at “Ground Zero” in the housing crisis. It is likely that more than 8 million homes, 16% of total will go into foreclosure between 2009 and 2012.

It’s bad right now, but the worst is yet to come. Far more numerous than the sub-prime loans that started the decline…thousands of Alt-A Option Adjustable Rate Mortgages (ARMs) are beginning to reset to higher payments. Some $2.5 Trillion of these “slightly-less-than-prime” loans were made during the housing market run-up and it is now estimated that 50% of these will fail and require some type of remedy, like a modification or short sale to adjust to new housing market realities. This“Second Wave” of foreclosures is on our shores now. And, the modification initiative, part of the President’s Making Homes Affordable Program, is only a stop-gap measure, meant to stem the rising tide of foreclosures. It does nothing to address the actual problem of lost value. That pricey problem is still “out there”.

Almost 20 million U.S. homeowners, or over 17% are currently “underwater” or “equity deficient”. That is, they are worth less than is currently owed on them. About x% of these will be sold “short”, another X% foreclosed or accepted by the bank in deed-in-lieu transactions and sold as REO by the lender. Over 2MM of them will have mortgages “modified” in 2009. It is expected that, in total, this housing bubble deflation will cost the US economy almost $4Trillion.

The numbers are mind-numbing and the amount of “evaporated” wealth is astounding! But, for you it is personal. It is of little comfort that so many millions of smart, hopeful and hardworking Americans are experiencing just what you are. You have to deal with your crap.

Dealing with it means the following: 1) Understand all foreclosure workout options, 2) Asses your resources, 3) Asses your legal vulnerabilities – can the lender hold you liable for any “shortfall”…do they have “recourse”?, 5) Asses your tax consequences, 6) Understand your housing options – rent vs. own…and try to be objective about it and 7) Think thru the credit score issues and make peace with them.

My hope is that, while this stuff is not fun, at least all the resources we provide can help you get through and give you a little lift – to lift you out of complacency and depression – and empower you with some street-smart actionable facts and the confidence to find your way forward.

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