An estimated 1.8 million adjustable subprime loans are scheduled to reset to sharply higher interest rates nationwide over the next two years.
The company's Web site, youwalkaway.com, gets between 5,000 and 7,000 hits a day, Maddux says. And his staff of 12 answers phone calls ''all day long, nonstop.''
The 34-year-old entrepreneur contends that lenders helped bring the problem on themselves by allowing borrowers to take on too much debt and failing to document incomes. Now that prices are falling, he says they should be prepared to take their lumps, along with consumers.
''The contract goes both ways,'' Maddux said. ''The mortgage has a clause that says if they don't pay, the bank gets the house back. When they made the loan, it was risky. It allows for Plan B if (borrowers) can't afford the home anymore or they have to make a decision whether to put food on the table or make the mortgage payment...We try to help protect the homeowner.''
Economist Edward Leamer, director of the UCLA Anderson Forecast, said the creation of a company that helps borrowers go into foreclosure reflects ''a collective erosion in borrowers' commitment to service their loans.''
Historically, foreclosure was an option that responsible homeowners avoided at all costs. Households didn't default on mortgages unless they experienced life-changing events, such as illness, divorce or a death in the family, he said.
''That old model is behind us,'' Leamer said. ''People are walking away just because it was a bad investment.''
Martin McGuinn, a San Diego attorney who represents lenders and loan servicers in foreclosures, called the trend disturbing.
''From a lender's standpoint, the worst thing in the world that could happen is for people to simply walk away from their property,'' McGuinn said.
In the Spring Valley area of San Diego, an area hit hard by defaults, Eddie Zepeda, 30, has grown weary of trying to pay his adjustable mortgage while the value of his house is slipping. Unable to refinance into an affordable loan, he sought out You Walk Away.
''I am getting tired of the whole two-job thing,'' Zepeda said. ''I work at night. My wife works in the morning. I have to pay a baby-sitter. I can't afford it any more.''
Gabe del Rio, president of the Housing Opportunities Collaborative, a nonprofit consortium of homeownership and housing counseling agencies, said distressed borrowers have other alternatives besides harming their credit through foreclosure.
Information on foreclosures is available at no cost online or from the nonprofit groups he works with, he said.
''A foreclosure is the worst outcome that could happen,'' del Rio said. ''There are other steps you can take.''
As loan defaults have surged, lenders have become more willing to negotiate, he said. In some cases, they will take back homes and forgive the remaining debt to avoid the expense of the foreclosure process.
''You are basically settling with the lender,'' del Rio said. ''You are saying, 'I will give you back the collateral if you release me with from my debt.' You are not just skipping out.''
Another option is a short sale, in which a lender agrees to allow the borrower to sell the home for less money than the amount that is due on the loan.
Maddux said his company tells clients that foreclosure is a last resort. Not everyone can negotiate their way out of a bad situation, however. And many loan modifications simply don't provide enough relief.
''All the critics out there, what do they recommend?'' Maddux asked. ''If they can't sell and they can't refinance and a loan modification puts them in a similar situation, what is their option?''
You Walk Away offers reliable foreclosure information, he added. If borrowers ''did it themselves, they could save some money, but there are too many mistakes that could cost you well over $1,000.''
The company operates in California and four other states where Maddux and co-founder Chad Ruyle have agreements with attorneys who address local foreclosure laws. The other states are Florida, Colorado, Nevada and Arizona.
Maddux said the service includes an overview of the client's legal rights; consultations with a real estate attorney and a certified public accountant; and an estimate of how long the client can remain in a home after he or she stops making mortgage payments.
A letter also is sent to the lender designed to stop phone calls from debt collectors.
''We give them timeline updates almost weekly so they are aware what is going on in the process,'' Maddux said.
He knows his business will decline when the housing slump ends, but for now, ''there definitely is a need,'' he said.