Today I wanted to spend some time briefly discussing the attitude of many homeowners facing foreclosure. Many of the people I’ve spoken to were in denial. They couldn’t believe that they were in this kind of a situation. Most did not know what steps to take. They were looking for a way out but just did not know where to turn.

Many of them were deeply embarrassed. Most of us were raised with a sense of responsibility to fulfill our obligations. The idea that the man of the house was responsible for keeping a roof over his family’s head and providing food for the rest of the family was a prevalent theme when I was growing up. If you were not able to provide for your family you were ashamed. This embarrassment keeps many homeowners, mostly men, from seeking help. They don’t know what actions to take and where to go for help. They can’t tell friends or family and especially couldn’t tell the neighbors since that would increase their embarrassment.

If they did seek assistance from their lender, they usually had to hold on the phone for lengthy periods of time, sometimes hours, adding frustration to their embarrassment. In the early days of the foreclosure crisis, the banks didn’t have a clue what to do. After waiting a long time, you reached someone who did not know what to tell you. Their constant response was "when are you going to make a payment". They didn’t understand that if you had the money you’d have made the payment. They were not sensitized to any hardship you may be suffering that precluded you from making the payment. The only sure thing was a phone call EVERY DAY from the bank asking when you were going to pay. It is no wonder that 70% of all homeowners facing foreclosure take no action at all. That is an incredible statistic. Many just withdraw inside themselves wishing the problem would go away. They become paralyzed into taking no action.

It has only been in the past year to 18 months that we’re seeing the banks getting their houses in order. After getting their bailouts, many of the banks were able to stabilize themselves. Still, more than 300 banks failed over the last year and a half. But they have now doubled their staff and trained their employees to handle the needs of their customers. We’re not out of the woods by a long shot, but we’re making progress.

In the midst of all this turmoil, the short sale came into the spotlight. This tool has been around for a long time, but has been used sparingly. However we’re seeing a tremendously large quantity of short sales making their way through the cumbersome and lengthy maze to become the one alternative to a foreclosure that offers a real sense of a solution to the foreclosure crisis.

A homeowner will still take a hit in their credit score and won’t be able to purchase a home for a few years, but this "waiting period" isn’t all bad. It will give families an opportunity to recover from their hardship and get their finances in order before venturing into the homeownership situation again. I know that homeowners are feeling better about themselves and the situation they find themselves in today. They can start to see the light at the end of the tunnel. They are also beginning to understand that they are not in this situation alone. That doesn’t make it okay to default on your mortgage, but many others are also going through a similar situation which makes their dilemma easier to deal with. With the high unemployment rate and the housing market not rebounding as quickly as we’d like, we have a long ways to go before we’ll see the return of the real estate industry and our economy, but we’re taking the first steps in the long road to recovery, one home at a time.