Mortgages, San Diego Foreclosures and Alternative Dispute Resolution

Bankruptcy Attorney In San Diego – Stop Foreclosure In San Diego

We all know that the real financial crisis was spawned by the real estate bubble and the subprime mortgage market. Ironically, many of the companies that started the mess sought the protection of the bankruptcy court when their businesses were no longer viable. That financial crisis did not just hit companies, it also affected individuals who bought into subprime mortgages in the hopes of finally having a house of their own. In this post, we want to look at those individuals and how Chapter 7 or Chapter 13 bankruptcy might help them.

As a San Diego bankruptcy attorney specializing in Chapter 13 cases, I have seen many of my clients get stumped on what do when faced with a foreclosure by their bank. Many times this starts with a Notice of Default followed by a Notice of Sale. But, how do we stop a foreclosure in San Diego? These clients were ordinary hard-working people who got involved in a financial mess not by their own doing. This is not to say that some people didn’t make poor financial decisions but the lure of the “America Dream” was just too strong.

In years following the financial crisis, several bankruptcy courts around the country have created mediation programs that facilitate negotiations between struggling homeowners and mortgage servicers, in order prevent foreclosures. The mediation programs have been heavily-criticized and opposed, especially by banking and mortgage industry groups. One of the criticisms against the program is, unlike mediation programs for personal injury, contract disputes, and divorces, the mortgage mediation program had “no teeth.” In other words, there was really no judicial support behind the program, so there was no incentive for the parties to participate in good faith to resolve their problems.

The program had short-lived success. In April 2011, the Senate Judiciary Committee approved a bill clarifying the authority of bankruptcy courts in running the mediation programs. Bankruptcy judges who support the program say the mediation programs represent the one and only time a San Diego Chapter 13 debtor can express himself about his problems without fear that his own words will be taken against him. Mediation can provide a Chapter 13 debtor with a forum to clarify issues and lay out possible modifications of their mortgage under their Chapter 13 reorganization plan. The program, however, is just so new lenders are not taking the mediations seriously and, therefore, they have done little to help stop foreclosures in San Diego.

When you are facing the prospect of a foreclosure in San Diego you have a team of bankruptcy attorneys that will fight for your rights and save your home. The award-winning lawyers at Thompson | Wedeking are trained to utilize the best strategy to help financially-distressed individuals obtain a fresh start. Please call our office at 888.590.1773 for a free-no hassle consultation, download a copy of our free California Guide to Bankruptcy or find out how you can become a client right now. We promise, your expectations will be exceeded.

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