MichiganRadio

Facing The Mortgage Crisis: Not Facing It Alone ANN ARBOR, MI (Michigan Radio) - Sales of foreclosed homes and other distressed property made up nearly 70% of the home sales in Michigan during the first four months this year.

The rising number of homeowners in Michigan facing foreclosure has lead to the rise of a new specialty: distressed property expert.

They lend a hand to troubled homeowners,but not necessarily to keep them in their homes.

"but I at least will give them credit that they made a decision before the end of the day," realtor Pete Maxfield is speaking into a telephone as he stands in his new office in South Lyon. There's no furniture yet, and it needs paint, but the phones are ringing.

"When you get back we do have a few days on that other property where we could put something together if you wanted to do that..."

Maxfield has been a realtor for more than a decade. But lately, he says the percentage of foreclosed homes he handles has quadrupled. Dealing with people on the verge of foreclosure, Maxfield recently underwent training to become a certified distressed property expert.

Distressed property experts don't help people keep their homes. By the time most homeowners are ready to seek help, it's already too late. Maxfield says he tries to help people to navigate the system so they can short-sell their homes. Short selling means the home is sold for less than what's owed to the bank.

"We want to get these homes sold," says Maxfield, "No one wants to own these homes for any length of time. We want to get them back out there where people are living in there as quickly as possible. Hopefully if the bank sees there is someone with this designation that will work a little faster as well for them."

William Lamb is one of Maxfield's clients.

In the past few years, Lamb's wife suffered a serious illness, he placed his mother in an assisted living center, he sent a son off to college, then he lost his job of more than 30 years. As the bills piled up, Lamb fell behind in his payments on the home equity loan on his parents' home. He couldn't navigate the byzantine maze of banking regulations without help.

"I worked in a book bindery for 31 years .that's my only training in life," says Lamb, "I know how to fold books, or fold paper up into books. I know how to do that. As far as understanding real estate I'm lost."

Lamb says his distressed property expert helped guide him through the process, trying to sell the home before it was lost to foreclosure. Recently though, the bank rejected a short-sale offer on the house, and the home was sold at a sheriff's sale.

While the National Association of Realtors encourages its members to get distressed property training, the association does not have any standards for the level of training realtors should have.

And not everyone is happy to see the rise of distressed property experts.

Denny Miller is the president of the Michigan Mortgage Lenders Association. He says many so-called experts who are offering to help people with short sales today, are the same experts who sold people mortgages they couldn't afford and shouldn't have gotten in the first place.

"And so, they're trying to attract some of the same people who are now in trouble, looking for modification, looking for relief of some kind," Miller, "but they're charging heavy fees to basically direct these people to loan modifications which would not require any fees at all if they were able to seek those modifications out directly from their servicer."

Miller says homeowners should instead take advantage of programs offered by their mortgage lenders to avert foreclosure or to get out from under with the least damage to their credit rating.

Distressed Property Expert Pete Maxfield agrees. But, he says it doesn't hurt people to have an ombudsman like him who knows the system. And given Michigan's economy, Pete Maxfield expects his services will be needed for some time to come. © Copyright 2012, Michigan Radio