Foreclosure expert finds herself in trouble

SACRAMENTO, Calif. — Alexis McGee, founder of Foreclosures.com, made a national reputation by helping investors find and buy distressed properties whose owners were struggling to stave off foreclosure.

Those investors now have an unlikely prize in a large, new Craftsman-style home that's scheduled for sale on the courthouse steps in Fair Oaks, Calif., next month.

The distressed owner?

McGee.

McGee started her website in 1995 as a place for investors to find information on buying distressed properties. The site, which caters to paid subscribers, has grown in popularity. McGee became a renowned expert — writing books, offering seminars and being quoted regularly in media nationwide.

But McGee started having money problems nearly two years ago, records show.

The state in March 2009 filed a lien against her property for $127,000 in unpaid taxes. The federal government last August filed a lien for $210,000 in unpaid taxes.

McGee and her husband went into default in June on their Fair Oaks home and on a property at a resort in Squaw Valley. As of June 15, the two were behind $65,000 on their Fair Oaks mortgage. As of June 28, they were $25,000 delinquent on their resort-property loan.

The resort home was headed to a foreclosure auction, but McGee said she was able to work out a short sale, in which a lender agrees to let a home sell for less than what's owed on the mortgage.

The lender this month filed a notice of trustee's sale showing McGee and her husband owe $1.7 million on the Fair Oaks property. She said she's trying to arrange a short sale of it as well.

"We didn't want to sell it," McGee said. "It does not make financial sense to keep this property."

McGee said the Fair Oaks home should sell for a bit less than $1 million, down from the $3 million-plus she said the home was worth when built in 2007.

She originally tried to have the loan modified but said the lender, First Horizon Home Loan, was unreceptive.

"There's just not a lot of interest in working with the high-end homes," she said.

McGee said she's fortunate she knows how the system works and has been able to switch from pursuing a loan modification to securing a short sale.

"We're lucky we knew what to do," she said.

"This can happen to anybody," said Pam Canada, chief executive officer of NeighborWorks Sacramento, a community-development nonprofit that among other functions counsels those facing foreclosure.

"We've been through this tragedy over the last couple of years; people in all walks of life and circumstances have been affected by this."