AVOIDING FORECLOSURE

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FORECLOSURE / 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 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 Consumer Credit Counseling Service/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, Foreclosure Rescue Scams: Another Potential Stress for Homeowners in Distress. PROGRAMS FOR CONNECTICUT RESIDENTS AT RISK OF FORECLOSURE: HUD Approved Counseling Agencies New programs through the 2009 American Recovery and Revitalization Act (ARRA) "MAKING HOME AFFORDABLE" program: This is a mortgage foreclosure program for people whose loans originated before January 1, 2009. This program has two parts: 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 Dept. of Banking's Mortgage Foreclosure Assistance Hotline gives referrals to HUD counseling agencies and other foreclosure assistance centers; also cases can be given to Dept. of Banking examiners to research. (877)472-8313 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

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3/12/2011

AVOIDING FORECLOSURE

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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. WEB-BASED RESOURCES: "Making Home Affordable" http://www.makinghomeaffordable.gov/ Legal Assistance Resource Center of CT: “About Foreclosure: A Homeowner’s Guide to What It Is, How It Works, And Options You May Have” http://www.larcc.org/pamphlets/housing/about_foreclosure.htm U.S. Dept. of Housing and Urban Development: “How to Avoid Foreclosure” http://www.hud.gov/foreclosure/index.cfm U.S. Dept. of Housing and Urban Development:"Foreclosure Tips: http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure/foreclosuretips 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 Freddie Mac: Buying and Owning a Home, “Avoiding Foreclosure” http://www.freddiemac.com/avoidforeclosure/ TO FIND PROVIDERS IN CONNECTICUT'S COMMUNITY RESOURCES DATABASE: Search by service names: HUD Approved Housing Counseling Agencies Mortgage Foreclosure Assistance --------------------------------SOURCES: ” 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/cdd CONTENT LAST REVIEWED: May2010

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3/12/2011

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