/ AVOIDING FORECLOSURE
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
- Analyze your financial situation and
calculate how much of your mortgage you are able
- Contact a non-profit credit counseling agency
for help with analyzing your financial
situation. In Connecticut, the non-profit credit
counseling agency is Money
- 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, Foreclosure
Rescue Scams: Another Potential Stress for
Homeowners in Distress.
PROGRAMS FOR CONNECTICUT RESIDENTS AT
RISK OF FORECLOSURE:
Approved Counseling Agencies
- Federal Housing Administration (FHA) &
U.S. Treasury Department has adopted new program
requirements to the "Making Home Affordable
Modification" Program, (http://www.makinghomeaffordable.gov)
as of August 1, 2011, for unemployed homeowners
trying to stay in their homes, while seeking
re-employment. The changes to FHA’s "Special
Forbearance Program" will require servicers to:
- Postpone payments for unemployed
homeowners from four months to 12 months,
and remove upfront hurdles to make it easier
for unemployed borrowers to qualify.
- Also require servicers participating in
the current "Making Home Affordable Program
(MHA)" to extend the minimum forbearance
period to 12 months wherever possible under
regulator and investor guidelines.
- Additionally, forbearance under this
program will become available to borrowers
who are seriously delinquent.
NOTE: The program will not
apply to loans backed by:Fannie Mae and
Freddie Mac, which are under government
control but are aligned with separate
***Individuals are encouraged to contact their
mortgage loan servicers for more details, and
to see if they qualifiy.*** The program will
expire on December 31, 2013.
For a HUD Special Forbearance Fact Sheet on
the program changes, see: http://portal.hud.gov/hudportal/documents/huddoc?id=UnemplymtFactSheet.pdf
The following is summarized from the U.S.
Dept. of the Treasury’s, “Making Home
Affordable” guidelines, http://www.makinghomeaffordable/govThe
American Recovery and Reinvestment Act (ARRA),
“Making Home Affordable” mortgage assistance
program will assist current or at-risk
homeowners to modify loans to more affordable
a. REFINANCING: Many homeowners pay their
mortgages on time but are not able to
refinance to take advantage of today’s lower
mortgage rates perhaps due to a decrease in
the value of their home. A Home Affordable
Refinance will help borrowers whose loans are
held or secured by Fannie Mae or Freddie Mac
refinance into a more affordable mortgage.
b. LOAN MODIFICATION: Many homeowners are
struggling to make their monthly mortgage
payments either because their interest rate
has increased or they have less income. A Home
Affordable Modification will provide them with
mortgage payments they can afford. Mortgage
lenders for the Modification Program are
offered financial incentives to participate,
but participation is not required. It is on a
voluntary basis and mortgages are evaluated on
a case-by-case basis.
To check eligibility and for more information,
go to: http://www.makinghomeaffordable.gov/
- 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.
- Connecticut Housing Finance Authority (CHFA)
manages several mortgage foreclosure assistance
programs, including the Connecticut Fair
Alternative Mortgage Lending Initiative and
Education Service (CT
FAMLIES) program, the Emergency
Mortgage Assistance Program (EMAP) and the
Homeowners Equity Recovery Opportunities program
(HERO). Call CHFA at (877)571-2432.
- Homeownership Preservation Foundation's HOPE
Hotline/HOPE NOW provides free mortgage
foreclosure counseling and referrals to in-state
foreclosure counseling resources. Access to
housing counseling is also available at the
website. English and Spanish-speaking counselors
are available at the HOPE Hotline 24 hours a
day, 7 days a week.
- 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. The Foreclosure Mediation Request form
and an Appearance form must be filed not more
than 15 days after the return date on the
Summons, unless extended by the court.
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,” March 2005; U.S.
Department of Housing and Urban Development:
Homes and Communities, “How to Avoid
Foreclosure;” Wickell, Janet: Your Guide to Home
Buying / Selling, “How To Stop Foreclosure.”
PREPARED BY: 211/kq
CONTENT LAST REVIEWED: September2012