Recent articles on rebuilding or reestablishing your credit after foreclosure are popular and can be in all corners of the Internet. But what about rebuilding your life after foreclosure?

“Life goes on” may sound like a cliche, but no matter how devastating the experience, it’s true: Life does goes on. How well it goes on for you and your family hinges a great deal on how well you prepared for and controlled the foreclosure fallout, as well as on your financial resources and emotional frame of mind.

Here are some tips from one of my latest books,Foreclosure Self-Defense For Dummies, that speak directly to rebuilding your life post-foreclosure. In Part II of this post, which will appear later this week, I’ll share five additional ways to rebuild your life after foreclosure.

1. Reboot: As you run and then exit programs on a computer, those programs are not completely removed from your computer’s memory. Over time, the computer’s memory is overrun with errant instructions that slow it down and cause all sorts of mysterious problems. Rebooting the computer by shutting it down and restarting it often resolves the problem. The same is true in life. Sometimes a fresh start is all you really need to get back on track. Leave all the bad stuff in the past, especially any mistakes that you or your partner/spouse may have made leading up to the foreclosure. You can’t change the past. You can only make adjustments to ensure that history doesn’t repeat itself.
2. Swear off the same mistakes: If some human foible led to your foreclosure — overspending, not working hard enough, gambling, substance abuse, or some other weakness — own up to it and then make a commitment to change. The same applies to any errors of judgment you may have made, such as making your partner/spouse solely responsible for the finances or letting a loan officer convince you that you could “afford more house.”
3. Lean on family and friends: After foreclosure, whether you managed to keep your home or ended up losing it, friends and family can give you the support you need to get back on your feet:
   • Encouragement and love to keep going.
   • Financial support in the form of loans or a job.
   • Watching your children, so you can take on an extra job.
   • Driving you to work and back if you have no reliable mode of transportation.
   • A temporary place to live.
4. Move on, literally: The United States is a big country and jobs often move from one state to another. Consider moving to wherever the best- paying jobs are. Move to where the housing is cheapest. Move to where the schools are excellent and free. Whatever your most pressing needs are, research to find areas that are best suited to meet those needs. The loss of a job in Ohio may be just the opportunity you need to pick up and move to North Carolina.
5. Slash expenses and your cost of living: Chances are good that when you first set out to seek your fortune, your standard of living was fairly low and you needed very little to survive. You lived frugally, had plenty of time, and probably enjoyed life more than ever. What’s to stop you from doing that again? Do you really need a big house and all the trappings of “success?” Most people don’t. Society has sold us a bill of goods, making most of us believe that happiness hinges on owning things.

Check back later in the week for Part II of this important topic.

While it’s probably of little comfort to the majority of homeowners caught up in the current mortgage meltdown and foreclosure crisis, we are now starting to receive word that some of the Nation’s most expensive zip codes are feeling the crunch. While high-priced areas have generally held up better than most home prices–which dipped by slightly more than 14% in the 12 months ending March 31 (that, according to the S&P Case/Shiller Home Price Index)–many traditionally posh towns and neighbors are feeling the pain also.

From CNNMoney.com:

• In Palm Beach, Fla. (zip code 33480), median home prices fell 38% during that period
• Prices in Greenwich, Conn. (06831), dropped 15%
• Homes in Wayzata, Minn. (55391), are selling for 28% less
• Gladwyne, Penn. (19035), was down 6%
• Beverly Hills (90210), Lincoln, Mass. (01773), and Ladue, Mo. (63124), each slid 2%

According to one foreclosure estimate, in Beverly Hills alone, home of the famous 90210 zip code, foreclosure filings almost doubled to 41 in the first quarter of 2008, up from 22 in the first quarter of 2007.

Again, there’s not much to take comfort in from these statustics. Nevertheless, they are noteworthy because they speak to the size and scope of the foreclosure crisis nationally.

This morning’s edition of The New York Times included a story by Business writer Joanne Kaufman entitled, "A Shift in Real Estate Books." The article talks about how publishers are working hard to get books to market to help homeowners and real estate investors with the downturn in the housing market and increasing foreclosures.

The article begins by focusing on the fact that even celebrities are finding themselves ensnared by the mortgage meltdown. Recently, Johnny Carson’s co-host, Ed McMahon–who became just as famous for making a very small number of people ecstatic as spokesperson for American Family Publishing sweepstakes as he did for his role on The Tonight Show–has run into some financial trouble and is facing foreclosure on his California home. As the article points out, I tried to contact Mr. McMahon to offer my help in reviewing his real estate files (to see if he had been mislead–or even worse–by his financial advisors or the real estate industry professionals who worked on his behalf), but I wasn”t able to get very far.

In any case, The New York Times article serves as yet another nod toward the fact that a lot of people are in trouble these days because of the mortgage meltdown.

From The New York Times:

A few years ago, when the housing market was white-hot, companies that publish how-to books were tripping over themselves to pump out titles about buying property and making money in the real estate business.

Now that the bottom has fallen out of the housing market, the opposite is true: publishers are updating their backlist titles as well as rushing out newly acquired manuscripts to advise consumers who may have stumbled in the housing game.

For more on this story, read "A Shift in Real Estate Books".

Chicago Tribune real estate columnist Mary Umberger recently asked me to offer advice to homeowners who are behind on their mortgage payments. From this morning’s Chicago Tribune:

Making the most of workout
Mary Umberger

April 13, 2008

Options exist for homeowners behind on their mortgage payments—if they act quickly. Lisle attorney Steven Bashaw and Michigan real estate broker Ralph Roberts offer these:

• A forbearance agreement may help borrowers with short-term financial problems, Roberts said. It’s a payment plan with a set pay-back period, and the bank will want proof you can live up to it. “If you owe $3,000 in back payments, for example, the bank may allow you to pay an extra $250 per month for 12 months,” he said.
• Reinstatement entails paying all past-due payments, costs and fees to bring the account current. This may be a good short-term solution, Roberts said, but homeowners have to make hard decisions about whether they can keep paying the loan in the long haul.
• Mortgage modification means working out a new loan, with many possible variations. The bank may agree to roll the amount owed in missed payments, penalties and interest into the total loan amount, for example, Roberts said. Or a modification might lower the interest rate or change the loan’s term.
• Sell the house in a timely manner, pay off the loan and fees, and end the problem, Roberts and Bashaw said.
• A short sale occurs when a lender agrees to take a loss by selling the house for less than the amount owed. “I don’t encounter those as much as you’d think,” Bashaw said. “They’re not the panacea that speculators and investors and real estate agents want you to think they are.”
• Bankruptcy. “It can give you more time to restructure your debt,” Roberts said. “Bankruptcy takes you off the market, the collection proceedings can’t keep going. The clock just stops running.” But it’s extreme, and a lender might get court approval to proceed with the foreclosure anyway, Roberts said. Plus, it poisons your credit-worthiness.
• Redemption. In Illinois, a foreclosed borrower has a certain amount of time after the house is sold at auction to redeem it by reimbursing the purchaser for the sale price and other costs.
• Rescue plans can come from all manner of folks. They are too varied to describe here—except to say that homeowners must be wary of scams.

Bottom line: Don’t sign a quit-claim deed to someone who says this will “fix your problem,” Roberts says. It may be a ruse to steal the house. Check with a lawyer before you sign.

Maryland’s Governor has signed into law emergency legislation that may help thousands of Maryland homeowners who are at risk of losing their homes. The emergency bills signed late last week include:

• The Real Property – Recordation of Instruments Securing Mortgage Loans and Foreclosure of Mortgages and Deeds of Trust on Residential Property bill. This legislation significantly lengthens the foreclosure process from 15 days to approximately 150 days, making it fairer for homeowners and providing them with more time and notice before a foreclosure sale. It also requires lenders to wait 90 days after default before filing the foreclosure action and to send a uniform Notice of Intent to Foreclose to the homeowner 45 days prior to filing an action. Additionally, the bill requires personal service when notifying a homeowner of impending foreclosure actions and requires that a sale may not occur for 45 days after service. A lender must produce proof of ownership when filing a foreclosure action. The bill codifies the right to cure, which will allow a homeowner to stop foreclosure by paying what is owed up until one business day before the sale.
• The Real Property - Maryland Mortgage Fraud Protection Act is a comprehensive criminal mortgage fraud statute that makes mortgage fraud in Maryland a crime for anyone involved in the mortgage transaction. The bill provides for significant fines and imprisonment for violators and gives the court authority to order restitution and forfeiture and enhanced penalties for cases involving vulnerable adults. The bill also authorizes the Attorney General, a State’s Attorney, and the Commissioner of Financial Regulation to take action to enforce the statute. The bill allows victims of mortgage fraud to bring private action against violators.
• The Protection of Homeowners in Foreclosure - Prohibition on Foreclosure Rescue Transactions – Enforcement is an emergency bill that bans foreclosure rescue transactions that scam homeowners out of their homes and the equity they’ve built. The bill also provides additional consumer protections for people who are trying to sell their homes because they are in default.

Foreclosure rates have risen dramatically across the nation, and Maryland has not escaped the trend. In the fourth quarter of 2007, Prince George’s, Montgomery, Washington and Worcester Counties saw the number of foreclosures double from previous quarter. In other Maryland counties, such as Kent, Garrett and Somerset, the numbers nearly tripled. Statewide, Maryland saw 9,722 foreclosures, compared to 7,001 in the previous quarter, an increase of 2,721 foreclosure events statewide.

Earlier this year, Maryland introduced its “Bridge to HOPE” Loan Program, which provides small gap loans at zero percent interest to homeowners facing difficulty, giving them time to get back on their feet or find a solution. The statewide program is administered by the Maryland Department of Housing and Community Development’s Community Development Administration (CDA). Families and individuals facing the possibility of foreclosure should call 1-877-462-7555 or visit www.MDHOPE.org for assistance.

RealtyTrac, a leading online marketplace for foreclosure properties, yesterday released its February 2008 U.S. Foreclosure Market Report, which shows foreclosure filings — default notices, auction sale notices and bank repossessions — were reported on 223,651 properties nationwide during the month, a 4 percent decrease from the previous month but still a nearly 60 percent increase from February 2007. The report also shows one in every 557 U.S. households received a foreclosure filing during the month.

Nevada, California, Florida post top state foreclosure rates

Nevada continued to document the highest foreclosure rate among the states, with one in every 165 households receiving a foreclosure filing — more than three times the national average. Foreclosure filings were reported on a total of 6,167 Nevada properties during the month, up 1 percent from the previous month and up 68 percent from February 2007.

California registered the nation’s second highest state foreclosure rate in February, with one in every 242 households receiving a foreclosure filing during the month, and Florida registered the nation’s third highest February foreclosure rate, with one in every 254 households receiving a foreclosure filing during the month. Both states documented foreclosure rates that were more than twice the national average.

Arizona foreclosure activity was up 6 percent from the previous month and nearly 210 percent from February 2007, helping the state’s February foreclosure rate — one in every 264 households received a foreclosure filing during the month — rank fourth highest in the nation.

With one in every 305 households receiving a foreclosure filing in February, Colorado’s foreclosure rate ranked fifth highest among the states despite a 1 percent decrease in foreclosure activity from the previous month. The state’s foreclosure activity was still up nearly 27 percent from February 2007.

Other states with foreclosure rates among the nation’s 10 highest were Michigan, Ohio, Georgia, Indiana and Tennessee.

California, Florida, Texas report highest foreclosure totals

Foreclosure filings were reported on a total of 53,629 California properties in February, the most of any state despite a 6 percent decrease from the previous month. The state’s foreclosure activity was still up 131 percent from February 2007.

With foreclosure filings reported on a total of 32,447 properties, Florida documented the second highest state total in February. The state’s foreclosure activity was up more than 7 percent from the previous month and more than 69 percent from February 2007.

Texas documented the third highest state total — 12,261 properties with foreclosure filings — despite a nearly 17 percent decrease in foreclosure activity from the previous month and a 1 percent decrease in foreclosure activity from February 2007. With one in every 736 households receiving a foreclosure filing during the month, the state’s foreclosure rate ranked No. 17 among the states and was below the national average.

Michigan and Ohio both reported more than 10,000 properties with foreclosure filings in February. Other states in the top 10 in terms of total properties with foreclosure filings reported were Arizona, Illinois, Georgia, Colorado and Nevada.

California and Florida cities dominate top metro foreclosure rates

California and Florida metro areas accounted for nine of the top 10 metro foreclosure rates in February. The Cape Coral-Fort Myers, Fla., metro area documented the highest February foreclosure rate among the 229 metro areas tracked in the report, with one in every 84 households receiving a foreclosure filing — 6.7 times the national average. The other Florida metro area in the top 10 was Fort Lauderdale, which ranked No. 10.

The Stockton, Calif., metro area documented the second highest metro foreclosure rate, with one in every 87 households receiving a foreclosure filing in February. Other California metro areas in the top 10 were Modesto at No. 3, Merced at No. 4, Riverside-San Bernardino at No. 5, Bakersfield at No. 7, Vallejo-Fairfield at No. 8 and Sacramento at No. 9.

Las Vegas was the only metro area in the top 10 that was not in California or Florida. With one in every 131 households receiving a foreclosure filing in February, the city’s foreclosure rate ranked No. 6.

If you or someone you know is currently facing foreclosure, you have options, including:

1. You are not alone. Foreclosure knows no geographic, racial, ethnic, or socio-economic boundaries. We have seen real estate agents, attorneys, and others face foreclosure. Michael Jackson recently filed for bankruptcy. Foreclosure is much more prevalent than you think.
2. Most people facing foreclosure have at least a dozen options. (Many people falsely believe that they have only two options – pay up or move out.) You can reinstate the loan, refinance (consolidate debt), list the home for sale with an agent, sell to an investor (if you have insufficient time to list the property), offer a deed in lieu of foreclosure, declare bankruptcy, negotiate forbearance or a mortgage modification, to name several of the most common options.
3. Banks and other lending institutions do not want to foreclose. They make more money if you can make your payments. When they foreclose, they not only lose your monthly payments, but they also have the expense of foreclosing, rehabbing the home, and then selling it. In today’s market, there’s a good chance they’ll have to sell the home at a loss. This is all good news for you – it means the bank is highly motivated to make a deal with you.
4. Given the current mortgage crisis and resulting foreclosure epidemic, the federal government, your state government, and consumer protection advocacy groups have put more pressure on mortgage lenders and provided them with additional resources to help homeowners in distress. In a way, people facing foreclosure now may be in a much better position to avoid it than they would have been, say five years ago.
5. If you own the home with your spouse or life partner, tell them immediately. Far too many people try to keep their partner in the dark. Eventually, the person will find out. It’s always better if they find out from you earlier rather than from someone else when they have little or no time to do anything about it. Couples that work as a team almost always see much better results.
6. Call your lender – the sooner, the better. As soon as you stop making payments, the foreclosure clock starts ticking. The earlier you know your options, the more time you have to pursue those options.

Stop by before the end of the week for six additional options!

Over the past decade, I have seen fraud rot the very foundation of the real estate industry, but what upsets me most is that 80% of it involves industry insiders–professionals who earn their living from this great industry. Every day, I see cases in which real estate agents, loan originators, mortgage brokers, appraisers, and other industry insiders play an active role. But the people who could stop it often choose to look the other way.

Anyone can see the fallout from this greed; fraud has hurt everyone. The value of the dollar has plunged, global stock markets are fluctuating wildly, the U.S. is on the brink of one of the worst recessions since the Great Depression, our neighborhoods are crumbling under the weight of foreclosure, and economists are warning of a global recession.

Yet, the people committing fraud have not curtailed their activities. If anything, they have ramped up their efforts to cash out before nothing is left. And all the while, far too many honest citizens and real estate professionals continue to look the other way.

In order to stem the tide of real estate and mortgage fraud (the fastest-growing, white-collar crime in America), we need to realize that those committing fraud threaten our very livelihoods. The crimes that a minority of professionals in our industry are committing fuel distrust among consumers, tarnish our reputations, and undermine our integrity. We need to pledge allegiance to the American dream of homeownership and fight back.

To regain control of our industry, we must first pledge to not go along with questionable transactions. This is tough. When the guy or gal down the street is willing to go along with a scam in order to earn the commission, acting with integrity can hurt your short-term business. This is why the second pledge is so important: to report suspected incidents of fraud.

When you see the asking price for a home that has been sitting on the market for six months suddenly shoot from $350,000 to $500,000, and then sell the next day, you should become more than a little suspicious. Do not look the other way. Call your local FBI office and report it (to find the number for your local FBI office, visit the Report Real Estate Fraud page on FlippingFrenzy.com and choose your state from the pull-down menu in the left hand column).

If something suspicious occurs at the closing, ask to speak with the manager of the title company. Explain what you are concerned about and request the phone number for the lender. Every closing packet has a phone number to call for funding approval that will get you in contact with a real person rather than an automated system. Call the number and explain what’s going on.

Do your part to clean up the industry. Spot the signs. Stop the fraud.

Federal Reserve Chairman Ben S. Bernanke told a gathering of the Independent Community of Bankers of America that they need to do a lot more to help distressed homeowners, especially those facing foreclosure. Bernanke called earlier today for a “vigorous response” to help stem rising home foreclosures, saying some banks and lenders could do more to help ease the U.S. housing crunch and keep more American’s in their homes.

Bernanke’s remarks, which can be read in their entirety here, are groundbreaking because they signify the first time someone with any power over the direction of the financial markets has publicly asked a question so many of us have been asking for over a year now… what’s the point in forcing people out of their homes when they can afford to pay their pre adjustable rate payments. As Larry Rubinoff asked in a guest blog post on FlippingFrenzy.com this past weekend, would it not be better to freeze the interest rate for a homeowner who has been paying at that rate rather than foreclosing and kicking them out onto the streets? In the extreme, would it not be better to cut the rate in half rather than foreclose?

At the end of the day, the proof will be in the pudding. If the bankers chose to respond vigorously, more of us will win. If they don’t, Bernanke’s 3,175-word speech will have been for not.

If you live in or around the Phoenix, Arizona, area and are interested in learning more about how to defend against foreclosure, consider stopping by the Phoenix Convention Center this Saturday for the 2008 Real Estate and Mortgage Expo where Lois Maljak and I will be presenting the following workshop:

TOPIC: Foreclosure Self-Defense: The Short Sale and Other Proven Strategies for Surviving a Homeownership Crisis
When: Saturday, February 23, 2008
What Time: 11:00 a.m. - 11:45 a.m.
Where: Phoenix Convention Center

When most people fall behind on their mortgage payments or receive a notice of default or foreclosure, they panic and waste precious time trying to hide the problem. They mistakenly believe they have only two options – pay up or face eviction. Lois Maljak and I, co-authors of Foreclosure Self-Defense For Dummies, know better. In this informative workshop, we reveal over a dozen strategies for keeping your home or selling it and cashing out the equity, including:

• Negotiate a short sale by convincing the lender to accept less than the balance due on your mortgage.
• Ask a third-party to negotiate the short sale on your behalf – if the bank refuses to work with you.
• File for bankruptcy…or at least let the bank know you are considering that option so you gain leverage in the negotiating process.
• Negotiate a mortgage modification, essentially rewriting the mortgage with a more affordable interest rate and terms.
• Sell your home, so you don’t lose your home and your equity.

In this workshop, you discover the truth about foreclosures that the banks don’t want you to know–they need to resolve the problem as much as you do, and sometimes more than you do. Everything is negotiable, including how much you owe them!

For more information about the event, visit the 2008 Arizona Real Estate and Mortgage Expo website.