|
FORECLOSURE / AVOIDING FORECLOSURE
Failure to pay your monthly mortgage payments can lead to foreclosure, but there are ways to avoid that outcome. The following is a list of things you can do to avoid foreclosure.
- 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.
- 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.
- Ways that you can avoid foreclosure in Connecticut (excerpted from the Legal Assistance Resource Center of Connecticut website, http://www.larcc.org/pamphlets/housing/about_foreclosure.htm):
- Emergency Mortgage Assistance Program – If you have had a significant loss of income beyond your control and you will be able to resume full mortgage payments in the future, you might be able to receive assistance from the Connecticut Housing Finance Authority (CHFA).
- Eviction/Foreclosure Intervention Program – This program provides mediation and funding for delinquent conventional mortgages, and negotiates mortgage holder agreements and payment rescheduling for delinquent mortgages. Eligibility is based on income level, percent of income used to pay for housing, the reasons for missing mortgage payments, and your ability to make payments in the future. To find out which agency administers the program for your community, call 2-1-1.
- Court Protection in Unemployment and Underemployment Cases – If you are temporarily unemployed or underemployed and unable to make mortgage payments, you can apply to the court for protection. The court may postpone the foreclosure for a maximum of six months.
- The Right of Redemption – Before the court declared law day (date of foreclosure) or sale date, you can exercise your right of redemption. You must be able to pay off the mortgage, all interest due, court costs, attorneys' fees, title search fees and appraisal fees.
- Ways that mortgage companies can help you avoid foreclosure:
- Forbearance – an agreement to let you pay less than the full amount of your mortgage payment for a specified period;
- Reinstatement – a promise from you that you will bring payments up to date with a lump sum payment;
- Repayment Plan – an agreement to let you catch up with your mortgage payments by adding a portion of the past due amount to a certain number of monthly payments;
- Mortgage Modification – an agreement to add the past due amount of your mortgage to a new mortgage over a longer payment period;
- Home Sale – an agreement to put foreclosure on hold to give you time to put your home up for sale;
- Short Sale – the lender allows you to sell your property for less than the outstanding loan, keeps the proceeds and forgives the remaining debt;
- Assumption – allows a qualified buyer to take over your mortgage debt and make the mortgage payments – then you can sell your property and avoid foreclosure;
- Deed in Lieu of Foreclosure – allows you to give back your property and forgives the debt (this has a negative impact on your credit record, but may be less damaging to your credit than a foreclosure)
Watch out for Foreclosure Recovery Scams:
Be wary 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.
Web-based Resources:
Legal Assistance Resource Center of CT: “About Foreclosure: A Homeowner’s Guide to What It Is, How It Works, And Options You May Have” March 2005
http://www.larcc.org/pamphlets/housing/about_foreclosure.htm
U.S. Dept. of Housing and Urban Development: Homes and Communities, “How to Avoid Foreclosure”
http://www.hud.gov/foreclosure/index.cfm
U.S. Dept of Housing and Urban Development: “HUD Approved Housing Counseling Agencies in Connecticut”
http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm?webListAction=search&searchstate=ct
Federal Housing Administration: "You Can Avoid Foreclosure and Keep Your Home" http://www.fha.gov/foreclosure/index.cfm#1
U.S. Dept. of Veterans Affairs, Cleveland Regional Loan Center: “Avoiding Foreclosure”
http://www.vba.va.gov/ro/central/cleve/foreclosure_alternatives.htm
Wickell, Janet: Your Guide to Home Buying / Selling, “How To Stop Foreclosure” http://homebuying.about.com/cs/avoidforeclosure/a/foreclosure.htm
Freddie Mac: Buying and Owning a Home, “Avoiding Foreclosure”
http://www.freddiemac.com/corporate/buyown/english/owning/avoid_foreclosure.html
eHow.com: Finance and Business Center, “How to Avoid Foreclosure”
http://www.ehow.com/how_7235_avoid-foreclosure.html
Bankrate.com: Mortgage Basics – Chapter 7: Ownership: After closing, “Avoiding foreclosure”
http://www.bankrate.com/brm/green/mtg/basics7-5a.asp
TO FIND PROVIDERS IN CONNECTICUT'S COMMUNITY RESOURCES DATABASE:
Search by service names:
HUD Approved Housing Counseling Agencies
Mortgage Foreclosure Assistance
---------------------------------
SOURCES: Bankrate.com: Mortgage Basics – Chapter 7: Ownership: After closing, “Avoiding foreclosure;” eHow.com: Finance and Business Center, “How to Avoid Foreclosure;” Freddie Mac: Buying and Owning a Home, “Avoiding Foreclosure;” Legal Assistance Resource Center of CT: “About Foreclosure: A Homeowner’s Guide to What It Is, How It Works, And Options You May Have,” March 2005; U.S. Dept. 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/rj
CONTENT LAST REVIEWED: Augustl2007
|
