The relative health of a housing market and its local economy is often measured by the number of mortgages in delinquent, default, or foreclosure status. If we accept this metric, we can assume the downtown San Diego real estate market is in good shape, but this does not completely erase the possibility that you may face sudden and unexpected financial hardship and be forced to fall behind on mortgage payments, a situation that may lead to foreclosure unless you take action. Here are some ideas you can use to save your condo from falling into foreclosure and repossession status.
Discuss Options with Your Bank
One lesson learned from the subprime mortgage meltdown of the previous decade is that no one wants to go through a foreclosure, not even mortgage lenders or servicing entities. If you think you will not be able to make a full mortgage payment, get in touch with your bank to let them know about the situation. Many banks have loss mitigation departments that try every strategy to avoid foreclosure because it is a painful process for everyone involved.
Meet with a Real Estate Professional
Seasoned realtors tend to be well connected. They may not be able to act on your behalf, but they could put you in touch with other professionals who can help. Once you are in the radar of a proactive real estate agent, he or she will keep you in mind in case of a short sale opportunity.
Talk to a Lawyer
California is not a judicial state in terms of foreclosure, which means repossession can take place without going to court. However, this does not clear the bank from potential lawsuits. A foreclosure defense attorney may be able to find irregularities in the legal documents your bank prepared for your closing, which could open the door for a lawsuit that freezes the foreclosure and forces the bank to consider other options.
Sell the Condo as a Short Sale
With the assistance of a lawyer and real estate agent, you can present a reasonable and mutually beneficial proposal to your bank: selling your condo at a price that covers the outstanding and delinquent balance on your mortgage. This type of proposal requires negotiation to ensure it aligns with your interests, hence the need for legal representation. In a seller’s market such as San Diego, a short sale proposal could be more attractive and feasible.
File for Bankruptcy
If your bank chooses to play hardball, a bankruptcy filing may postpone the foreclosure process, but this does not mean it will go away completely. The type of insolvency filing will depend on your financial goals and the advice from your attorney. In many cases, a Chapter 11 filing may force the bank to come up with alternative solutions to let you keep your condo in downtown San Diego, which you can safely occupy while the case unfolds before the Southern District of California.
If you’re concerned about foreclosure in the future, you might want to consider listing your condos for sale. In Gaslamp Quarter, East Village, Marina, and other neighborhoods in downtown San Diego, there are plenty of buyers who are likely to be interested in your property. When you’re ready to sell, contact the trusted real estate agents at 92101 Urban Living at 619-649-0368.