As an attorney, Jonathan G. Stein long ago carved out a legal specialty in consumer debt cases. His timing was good. Amid the downturn in housing, he has become a leading foreclosure expert.

Business Week magazine recently noticed. On July 30 it named Stein one of the 11 top foreclosure attorneys in the United States. He was the only California attorney to make the list.

Business Week chose with assistance from Avvo.com, a Web site that allows users to rate attorneys. The site found attorneys who specialize in defending people facing foreclosure and related real estate disputes. It considered judgments won, years of experience, awards and lack of disciplinary action.

Stein, 34, is a graduate of California State University, Sacramento, and the McGeorge School of Law and writes the "California Debt Blog." His office is in Elk Grove.

He talked recently about the housing crisis and the consequences of too much easy money.

What are you seeing out there?

A lot of what I'm seeing is people who were looking to upgrade their homes, and were told by real estate agents, as well as mortgage brokers, they would be able to refinance in a few years. They were told that home prices would go up, that they really didn't need to be too concerned about these adjustable-rate loan issues.

And there are a fair number of people who didn't have a financial savvy about them, and believed on an $80,000 income they could afford a half-million-dollar house.

I was an economics major in college. The rule I was taught was multiply your income by three, and that's the most expensive house you can afford. Everybody seems to have ignored that rule, which worked so long for so many people. Not just consumers, but brokers and real estate agents ignored that, as well. They believed multiples of five, six and seven were going to be sustainable.

How has this evolved over the past 18 months? As the crisis has developed, has there been a change in your negotiations with creditors?

Mortgage companies are substantially more cooperative and willing to work with consumers now than six, 12 or 18 months ago. The companies hit a tipping point where they can no longer afford to own more homes. So they are willing to work with consumers who come to them with a plan to try to get the mortgage resolved.

This started as a problem with subprime borrowers who had spotty credit histories. Is there more trouble now among prime borrowers who have a history of paying bills?

It's getting that direction. Though I don't know if it's there yet, it is definitely seeping into the prime market.

I don't believe it's ever going to get as bad as it was with the subprime.

It is clear that people with good credit histories and good payment histories and good jobs are having problems now with their mortgages. And problems maintaining their ability to pay their bills.

I think it's a combination of the value of peoples' homes dropping, people not having equity in their homes, taking it out for cars, boats and life insurance policies and all kinds of other things.

They always used that line-of-credit cushion to be sure they never had a problem, and now that cushion is gone. They don't know how to adjust their situations.

Where are we in this credit cycle?

I think we're actually turning the corner. We're getting close to turning the corner. The people who are thinking, "We're sunk," those phone calls are dropping off. I'm not getting as many who are in the worst financial situations.

The people calling now are in a position where they can still salvage what they have. They just need advice to work through. That's a good sign. We are no longer going to have the major problems, the ZIP codes where every fourth house is foreclosed on.

Consumers have recognized that there's a problem. The mortgage companies are more willing to give people a second or third chance to work through these issues.

What kind of problems are people having as the credit problem has gotten worse?

The biggest problem is people falling behind on bills and getting calls at work and home on cell phones from debt collectors. They have become much more aggressive in their tactics. Debt collectors know Mr. and Mrs. Smith aren't just dealing with one debt collector, but two or three, and they want to be first to get their money. They're afraid consumers will file bankruptcy and they won't get their money.

What advice do you have for people sliding into trouble?

The advice I always give them is start early, not just with the mortgage company, but also with all creditors. Preferably, call them when you recognize you're going to have a problem. Be realistic about your situation. Honesty in these cases is definitely the best policy. Consider what your ultimate goal is.

For some people it makes more sense to short-sell the house than walk away. (A short sale is when the bank agrees to sell the house for less than what it's owed.) For other people, bankruptcy is the right way to go. For other people it may be a matter of resolving credit card issues first because they need to maintain a home.

Just stay calm. There are people out there to help: attorneys, government and charities.

If they take advantage of the resources out there, they will ultimately make it through this.

Call The Bee's Jim Wasserman, (916) 321-1102. Read his blog on real estate, Home Front, at www.sacbee.com/blogs.