You've probably seen the incessant TV and Internet pitches -- "We can stop your foreclosure!" -- offering hope to millions of homeowners who are behind on their mortgage payments or heading to foreclosure.

But a new settlement from the Federal Trade Commission sends a blunt warning to the fast-growing foreclosure fix-it industry: If you take consumers' cash upfront and promise you'll save their homes, you'd better be able to deliver.

Otherwise you may be charged with running a scam that violates federal law and accused of exploiting the country's mortgage delinquency mess for your own private gain.

The FTC filed suit against Clearwater, Fla.-based Mortgage Foreclosure Solutions last year, saying the company operated a "scheme to sell purported mortgage foreclosure services to consumers" nationwide through six Web sites but almost never prevented foreclosures.

The FTC said the company lured homeowners with claims that "no matter how far you are behind in your payments, the size of your mortgage debt or your credit history, we have mortgage foreclosure solutions." According to the complaint, the company's marketing pitches said, "We are so confident of our abilities to provide mortgage foreclosure solutions that we guarantee our services."

Consumers who signed up were charged $1,200 -- $250 for "processing setup" expenses and $950 for negotiating with lenders and resolving foreclosure issues. Yet the company, according to the FTC, did "not stop mortgage foreclosures or save consumers' homes in all or virtually all instances." Many clients ended up losing their homes to foreclosure despite the guarantees and fees, the agency said. The ones who avoided foreclosure did so on their own, with no help from the firm.

In a final settlement of the case in U.S. District Court in Tampa on Jan. 5, the FTC obtained a $1.2 million judgment against the company, along with prohibitions of future business activities promising foreclosure rescues. Because of the firm's inability to pay, the FTC agreed to suspend all but $8,320.84, while reserving the right to collect the rest if evidence emerges that the defendants had not fully disclosed their financial and other assets. Mortgage Foreclosure Solutions admitted no wrongdoing as part of the settlement agreement.

Cindy Liebes, assistant regional director for the FTC, said foreclosure rescue schemes are proliferating across the country as the result of the recession, job losses and the real estate bust. The firms prey on homeowners who "are scared and really don't know what to do" to get off the treadmill taking them to foreclosure, Liebes said.

Scam operators often have no special ability to intervene on behalf of distressed borrowers or to work out loan modifications, repayment plans or other alternatives with lenders. All they want is to sign up clients and take their money -- essentially kicking homeowners when they're most vulnerable.

Liebes said the FTC has compiled a list of "red flag" signs to help homeowners determine whether promoters claiming to be able to forestall or prevent foreclosures may not be legitimate. In general, avoid doing business with any firm that:

· Guarantees to stop your foreclosure, irrespective of how much you owe or how much income you have to resolve your unpaid bills. Most major lenders and the servicing companies they employ are willing to negotiate loan modifications to cut payments or reschedule debts, but if you don't have the income to handle lower payments, foreclosure is hard to avoid. Any company that spins you a different story is probably a scam.

· Requires you to pay money before any services have been rendered. Liebes said some states specifically prohibit foreclosure rescue firms from collecting any money in advance, but Internet-based companies often ignore those rules.

· Tells you to avoid contacting your lender or servicers directly, delegating all negotiating duties to the firm. In fact, borrowers tend to be in the best position to speak with servicers about their situations and possible alternatives to foreclosure, including short sales.

· Instructs you to send mortgage payments to its office address instead of your lender or servicer. Such firms not only take your money with little or no services rendered, but dig you into a deeper financial hole with your lender.

· Asks you to turn over the title or deed to the property so that the company can be in a stronger position to deal with the lender. That's the equivalent of kissing your house -- and any remaining equity -- goodbye.

If you spot any of these red flags, take the FTC's advice: Walk away fast.

Real estate blogging has been a boon to consumers by describing the local housing markets in far greater detail than any news organization. The challenge in blogging has been in consistently maintaining market commentary with a journalistic discipline. I've been discussing the "breaking news" paradigm as the most time efficient way for blocs of agents, whether within a brokerage company or created via social networks, to maintain "ticker tape" market commentary to complement blogging. We're moving into the age of the "Real Time" Web.

The point is both blogging and micro-blogging have different communication purposes, but adds "dimension" to the writer:

• Blogging provides in-depth research, analysis and demonstrates domain expertise.
• Micro-blogging alerts and validates analysis, and demonstrates commitment to market commentary.
• Both enable conversations to happen.

Micro-blogging "breaking news" compels consumers ready to make a transaction compelled to "time" the transaction similar to how consumers watch Marketwatch.com to make stock buying decisions. No smart consumer is going to buy GM stock today without watching breaking news. Once the consumer is hooked on the breaking news, the consumer confirms their decision to "follow" the micro-blogger by examining their blog content for evidence of expertise. For real estate marketing, a micro-blogging and a blogging presence are very complementary to capture attention, and then validate expertise, respectively. All this consumer analysis is done without the bloggers' knowledge, making it even more important for the blogger/micro-blogger to focus on delivering useful content.

The Return of the Basement With lot sizes limited, builders are looking for space underground. Once a typical feature of homes in the Northeast, basements are rising in popularity nationally as a way to create extra space. New technologies in insulation and waterproofing are allowing builders to add basements in any climate. They can serve as game rooms for kids, home theaters, or just the "man-cave" for Dad. Builders are even creating underground garages for homes and townhouses to free up space for living areas above, notes Irvine (Calif.) architect Rick Emsick.

The Death of the Living Room The kitchen, living, and dining areas are continuing to merge into a great room or family room. In a 2007 study conducted by the National Association of Home Builders, half of those surveyed said they would do without a formal living room if it meant a larger family gathering space. In some cases this is a refection of the connection to the outdoors as well, as home buyers want fewer walls and unobstructed views out into the backyard, says Craig Delahooke, director of custom development for John Laing Luxury Homes.

The Home Office No longer just a spare bedroom, the home office is evolving into an entirely separate structure such as a casita in the backyard or even a separate wing near the garage. Having a separate entrance for the home office allows today's increasingly mobile workforce to receive work-related visitors or hire an assistant at home without having these people traipse through the main house.

Wireless, but not Cordless With wireless laptops allowing people to carry their computer to any room, that little computer nook that was popping up at the top of the stairs in many new homes is starting to disappear. Instead you're likely to see a charging station or "Mom's Desk," a little space, typically in the kitchen, where cell phones, laptops, and other devices can be charged.

The Soft Loft The industrial look with concrete floors and exposed brick is over. Thousands of these pseudo SoHos popped up even in cities such as Dallas and Houston that lacked an industrial past. Downtown lofts have seen some of the steepest price declines in this bust. "Architects love to show these wide-open floor plans, but the reality is people want some privacy," says Los Angeles architect Jonathan Watts. He says new condos are returning to more traditional floor plans. Lofts are adding hardwood floors, sliding doors, even wall-to-wall carpeting to warm them up.

Say Bye to Bling As befits this economy, homes are getting less ostentatious. That means less ornate wood, stone, and iron work. No more grand entrances with curved-marbled staircases. The stairs are shifting to the side of the home and back to their utilitarian purpose. Even fireplaces are flickering. Only 46% of all new homes came with one in 2007, according to the U.S. Census. That's down from 59% in 1996.

The Green Badge of Honor It almost goes without saying, but green continues to be in, despite the latest slide in gas prices. Even the giant New American Home promises to use "net-zero energy" thanks to devices such as solar panels and designs that let in natural light. Home buyers used to love wowing their friends with the size of their McMansions. Now, says Sean Degen, vice-president for architectural services at home building giant Pulte Homes, "you're going to see more people having a green badge of an honor."

Aging in Place Builders say it's rarely something they overtly try to sell, but consumers are responding to features such as wider doors that can accommodate a wheelchair or walker, master bedrooms on the first floor, and tasteful looking handrails in the shower—amenities that will help baby boomers stay in their homes as they grow old.

Mortgage Applications Steady in Latest Week

The number of mortgage applications filed last week was essentially unchanged from the week before – at least on a seasonally adjusted basis.

This week’s index stood at 1245.7, compared to 1245.4 the previous week, adjusted for the Christmas holiday. On an unadjusted basis, the index decreased 40 percent compared with the previous week and was up 155 percent compared with the same week a year ago.

The refinance shore of mortgage activity declined to 82.3 percent of total applications, down from 82.9 the previous week.

Mortgage rates declined slightly:

• 30-year fixed-rate mortgages decreased to 5.03 percent from 5.04 percent
• 15-year fixed-rate mortgages decreased to 4.79 percent from 4.91 percent
• One-year ARMs decreased to 6.15 percent from 6.36 percent

A buyers' market should be just that—a buyers' market. It's not a fence-sitting, waiting, loitering, delaying, dawdling, postponing, vacillating, hesitating, wavering, faltering, pausing, foot-shuffling market. It's a buyers' market. By its very name it means buyers should be doing one thing and one thing only—buying. So where are the buyers, and why aren't they buying?

The great irony of a buyers' market is that even though the opportunity to buy is high, buyer urgency tends to hit an all-time low. The media becomes the excited purveyor of negative news and uninformed advice, and buyers buy it all. Actually, it feels like the only thing they're buying. 

Their reluctance is ironic since not so long ago buyers were incredibly excited about buying—and it was a sellers' market. Prices were escalating and it was perhaps one of the most difficult times to buy value and yet people were buying like there was no tomorrow. Buyers were afraid of losing out by not buying, even though the advantage was all to the seller.

Now a shift has occurred. Fear is still in the driver's seat but the tables are turned—the fear of paying too much seems to stop most in their tracks and immobilizes them. When they should have been afraid of paying too much they weren't, and now that they shouldn't be afraid of paying too much they are. 

It's one of the great paradoxical moments of any market and the herd instinct at its most pure. Reluctance in the face of great opportunity becomes an agonizingly defining characteristic of a shift.

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