Short sale brokers take some pain out of foreclosure.

Foreclosure rates nationwide jumped by 24% in August from the previous month, which is a 53% increase over last year and a record high for 2006, according to RealtyTrac, an online marketplace for foreclosure properties.

Loss mitigation experts expect this trend to continue across the nation over the next several years.

"Over the next 12 to 36 months, real estate foreclosures are going to substantially increase and we will experience significant property value declines in certain geographic markets of our nation," said Phillip Comeau, an innovative leader in mortgage delinquent loan management, speaking at an annual meeting of the nation's loss mitigation experts at the Five Star Default Servicing Conference, in Dallas, Texas last week.

The states of New York and New Jersey rank in the top 20 states in the nation with the highest foreclosures. According to RealtyTrac's US Foreclosure Market Report, New Jersey ranks 16th in the nation with nearly 1,000 homes in pre-foreclosure and New York jumped from 23rd in July to 19th in the nation in August, currently with over 10,000 homes ready to foreclose.

While many homeowners who receive a recorded mortgage default notice don't know what to do, real estate agents are now seeking advanced training on how to help homeowners avoid foreclosure by listing the "upside-down" property for sale and negotiating a discount or a short payoff on the mortgage with the lenders.

The process is known as a short sale and specially-trained short sale real estate brokers and agents are now in high demand by not only upside-down homeowners, but also lenders who will save tens of thousands of dollars or more by avoiding the high cost of completing a foreclosure process.

By educating themselves and their clients, licensed real estate agents and brokers can offer a variety of solutions to homeowners, as well as the ability to sell the equity-deficient home.

"A real estate agent or broker has a vital job to do in the pre-foreclosure market, which is growing exponentially across the US," says Margot Murphy, The Short Sale Pro and licensed broker in Portland, Oregon. "Now, more than ever, an agent or broker can truly help a homeowner out of a tight situation by selling the equity-deficient home and creating win-win-win-win situations for all parties involved."

"Short sales fail when real estate agents do not know how to be proactive in the process and successfully negotiate with banks to accept a discounted purchase offer," Murphy said, who has trained over 1,200 agents across the nation on short sale strategies.

In a traditional listing, Realtors[TM] help their clients list, market, and sell their home to a buyer. In the case of a short sale transaction, the agent or broker not only lists, markets and sells the home, but the broker also negotiates directly with the lender or loan service to settle the mortgage payoff at a discount of the balance due on the note. The broker/agent is paid an industry standard commission directly from the proceeds of the property sale, which is advantageous for the homeowner.

Murphy continues, "This type of real estate listing is challenging, but also very rewarding because everybody wins in this situation. The bank or lender wins, the buyer wins, the seller wins and the broker who closes the deal wins. I teach Realtors[TM] how to perfect this important strategy because I think it's only going to grow as a market sector in the coming years."

"If enough agents are equipped with this knowledge, it literally can help hundreds of thousands of homeowners across America."

LAUREN ELLIS GALEY

VP OF MARKETING, REALESTATEPROGUIDES.COM