Foreclosure / Avoiding Foreclosure
Note: For 2021 COVID-19 information, go to the Department of Banking website page, “Mortgage Relief During COVID-19 Outbreak” (COVID-19-Mortgage Relief (ct.gov))
Failure to pay your monthly mortgage payments can lead to foreclosure, but there may be ways to avoid that outcome. The following is a list of things you can do if you can no longer afford your mortgage.
- Analyze your financial situation and calculate how much of your mortgage you are able to pay.
- Contact a non-profit credit counseling agency for help with analyzing your financial situation. In Connecticut, the non-profit credit counseling agency is Money Market International.
- Contact your mortgage company as soon as you realize that you cannot make a mortgage payment or soon after you have missed a payment – the sooner the better.
- Stay in touch with your lender. Do not ignore the lender’s attempts to contact you.
- Work with your lender to find a solution. Lenders are motivated to help you find a way to avoid foreclosure. They want to continue receiving your mortgage payments. They don’t want to own your house.
- Seek help from a HUD approved housing counseling agency and from any of the programs listed below.
Foreclosure Recovery Scams:
Beware of anyone that tells you that you can stop foreclosure by signing a document that appoints someone else to act on your behalf. You could be signing over the title to your property without knowing it. Before signing any document that deals with your mortgage, get the advice of an attorney, a HUD approved housing counselor, or a real estate professional that you know and trust. You can also call the Better Business Bureau or the State’s Attorney to see if the business is trustworthy.
To read more about foreclosure scams, go to the Federal Trade Commission’s paper, Mortgage Relief Scams.
Programs for Connecticut Residents at Risk of Foreclosure:
- U.S. Treasury Department & U.S. Housing and Urban Development’s (HUD) program, “Making Home Affordable Modification” , (http://www.makinghomeaffordable.gov), which can assist homeowners with counseling and possible modifications to their home mortgages.
- Connecticut Department of Banking’s Mortgage Foreclosure Assistance Hotline gives referrals to HUD counseling agencies and other foreclosure assistance centers; also cases can be given to Department of Banking examiners to research. (877) 472-8313
- Connecticut Housing Finance Authority (CHFA) manages several mortgage foreclosure assistance programs, including the Emergency Mortgage Assistance Program (EMAP)
- Statewide Legal Assistance’s Pro Bono Foreclosure Attorney Panel assists income eligible homeowners facing foreclosure at no charge. Homeowners must have income at or below 200% of the Federal Poverty Level and be using the home as their primary residence. Assistance is provided on a case-by-case basis and clients are referred to other attorneys, as needed.
- Superior Courts in Connecticut offer the Foreclosure Mediation Program which provides free mediation services for homeowners and lenders in order to assist homeowners whose one to four family, owner-occupied, residential property is the subject of a mortgage foreclosure action. The property must be located in the state of Connecticut and be the homeowner’s primary residence. The foreclosure action must have a return date on or after July 1, 2008.
To Find Providers in Connecticut’s Community Resources Database:
Search by service names:
SOURCES: Freddie Mac: “Buying and Owning a Home,” “Avoiding Foreclosure;” Connecticut Network for Legal Aid: “About Foreclosure: A Homeowner’s Guide to What It Is, How It Works, And Options You May Have,” U.S. Department of Housing and Urban Development: Homes and Communities, “Foreclosure and How to Avoid It”
PREPARED BY: 211/ch
CONTENT LAST REVIEWED: April2022