San Diego Foreclosure Halt: 3 Winners + 3 Losers

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Foreclosure Halt Buzz

San Diego real estate circles are abuzz with discussion about Bank of America’s (and others) foreclosure halt. The general consensus is that those buyers who acquired foreclosures and have already closed on them will likely be safe, especially if title insurance was in place.

In jeopardy are those transactions in escrow or those in preparation stage for market entry.

So who potentially benefits from the foreclosure freeze–and who is at risk?

Potential Winners:

1. San Diego short sales. Here is an opportunity for banks to transfer clear title because the owner signs off on the sale voluntarily.  If they are smart, Bank of America and others will expedite short sales and remove future foreclosures from the liability pool.

2.Those borrowers who are trying to obtain loan modifications can now breathe a sigh of relief. This just might allow more homeowners to keep their homes and prevent further neighborhood blight and decay in home values.

3. Those home sellers who have equity in their real estate and  can negotiate directly without bank intervention. Savvy buyers might be willing to pay a small premium for great peace of mind in knowing there are no issues clouding title to the home they are buying.

Potential Losers:

1. Buyers who have a foreclosure  transaction in escrow with one of the lenders who have halted those sales.  Should they stay on course or move on to a more reliable deal?

2. The Foreclosure Industry including foreclosure real estate agents, foreclosure repair and service companies, foreclosure attorneys, title companies, escrow companies that exclusively service foreclosures, and other professions that serve the foreclosure industry.

3. Homeowner Associations. If foreclosures are halted and HOA fees remain in default with defaulted homes (as is often the case), the association may be forced to increase fees to cover neighborhood landscape maintenance, pools and other services.

This is a situation we are all watching closely–and welcome updates and comments.

FYI a Real Estate Glossary

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2 responses to “San Diego Foreclosure Halt: 3 Winners + 3 Losers

  1. Lucky for me, all my stuff falls in the Potential Winners category. I’ve been saying for two years that if a homeowner were to sue any foreclosing lender they could find something wrong and stop the whole process. Looks like the old dogs knows her tricks.

    1. Val: Kudos to you–and your real estate clients! I know of a mortgage professional who is in process of suing a major lender for slicing and dicing her loan in the securities market. It’s a mess. Meanwhile, big banks and lenders would be SO wise to expedite short sales and loans mods–and consider deeds-in-lieu of foreclosure as alternatives to foreclosure on courthouse steps (or filing away for future action). Thanks for stopping by:-)

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