Avoiding Foreclosure
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Are you falling behind on your monthly mortgage payment? Have you found yourself delinquent on your loan? Is your adjustable rate mortgage becoming unaffordable because your payments are increasing? You are not alone. Millions of people have trouble with their mortgage every year. But foreclosure can often be prevented. Don’t be afraid or embarrassed to ask for help. The following tips may help avoid that result.
Contact Your Lender
Avoid Foreclosure "Rescue" Scams
Contact a HUD-Approved Housing Counselor
Check into Refinancing and Loan Programs
Social Service Programs
Veterans
Legal Services
Appearance Form and Foreclosure Mediation Program
For more information download the Department of Banking's "Avoiding Foreclosure" booklet:
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With the passage of Public Act 09-209, CT FAMLIES Program is now available for delinquent homeowners with a fixed rate or an Adjustable Rate Mortgage.
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Act early. Contact your lender as soon as you find yourself unable to make your monthly payment. Take that first step and make your lender aware of your financial difficulties as soon as you realize you have a problem. You and your lender may discuss reasonable workout options and alternative payment plans. More than one-third of those who take the initiative and seek assistance are successful in finding alternatives to foreclosure.
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Banks and financial institutions will often work with delinquent borrowers and find reasonable arrangements rather than foreclosing on the loans immediately.
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Don’t ignore letters from your lender if you miss payments. It is important to be aware that if you have missed several payments and your loan is in default your lender may start foreclosure unless you can come up with the money to cover all your missed payments, plus any late fees.
This is why it is crucial that you contact your lender as soon as you realize that you will not be able to make your required payment. Most lenders who believe a borrower is acting in good faith will be willing to work with them.
Avoid Foreclosure “Rescue” Scams
The Department of Banking, the FDIC and the Federal Trade Commission (FTC) want you to be aware of foreclosure rescue scams that target homeowners having serious problems making their mortgage payments. In these “rescue” scams, a con artist promises to help you save your home, but is actually intent on stealing your home or most of the equity you have accumulated in your home.
According to the FTC, the following predatory scams have been reported:
- The foreclosure prevention specialist: The “specialist” really is a phony counselor who charges hefty fees in exchange for making a few phone calls or completing some paperwork that a homeowner could easily do for himself. None of the actions result in saving the home. Turning to a HUD-approved counselor for assistance is one way to avoid this type of fraud.
- The lease/buy back: Homeowners are deceived into signing over the deed to their home to a scam artist who tells them they will be able to remain in the house as a renter and eventually buy it back. Usually, the terms of this scheme are so demanding that the buy-back becomes impossible, the homeowner gets evicted, and the “rescuer” walks off with most or all of the equity.
- The bait-and-switch: Homeowners think they are signing documents to bring the mortgage current. Instead, they are signing over the deed to their home. Homeowners usually don’t know they’ve been scammed until they get an eviction notice.
Contact a HUD-Approved Housing Counselor
- The U.S. Department of Housing and Urban Development (HUD) maintains a list of approved housing counselors who give advice for free or at a low cost. To find a HUD-approved counselor in your area call 1-800-569-4287 or online to view the HUD Approved Housing Counseling Agencies in Connecticut.
- Homeowner’s HOPE, a service of the nonprofit Homeownership Preservation Foundation, and NeighborWorks America, a national nonprofit organization, have established a toll-free hotline to help homeowners avoid foreclosure by providing free advice and support. Callers can receive immediate free counseling from nonprofit, HUD-certified organizations 24 hours a day, 7 days a week.
Phone: 1-888-995-HOPE (4673)
Check into Refinancing and Loan ProgramsConnecticut Housing Finance Authority (CHFA)
CHFA provides mortgage financing at rates below the conventional market to offer affordable alternatives to low- and moderate-income first-time homebuyers in Connecticut.
Phone: (860) 721-9501
(877) 571-CHFA (2432)
E-mail: info@chfa.org
Neighborhood Assistance Corp. of America (NACA)
NACA is a non-profit community advocacy and homeownership organization that has a Home Save/Refinance Program to provide effective solutions for homeowners at risk of losing their homes. NACA may be able to assist you through refinancing your existing mortgage or working with your lender.
Southern Connecticut:
144 Orange Street
New Haven, CT 06510
Phone: (203) 562-6220 |
Central and Northern Connecticut:
1623 Main Street
Springfield, MA 01103
Phone: (413) 788-6220 |
Mortgage Relief Fund
Citizens Bank, Sovereign Bank, TD Banknorth, Webster Bank and Bank of America have committed $125 million to help eligible New England homeowners in good standing with their current mortgage loan who may be experiencing difficulty making payments now and who expect to have greater difficulty making payments when their interest rates reset. The program is not designed for borrowers who are delinquent on their current mortgage or who are facing imminent foreclosure.
Citizens Bank – 1-888-411-1145
Sovereign Bank – 1-800-288-6225
TD Banknorth – 1-800-281-0025, extension 2315
Webster – 1-888-681-7788
Bank of America – 1-800-344-9403
USDA Rural Housing Service
The U.S. Department of Agriculture Rural Housing Service has loan programs that may be available to refinance your mortgage if you are in threat of foreclosure, have a fixed rate mortgage, and depending on your household income and the location of your residence. Available programs, qualifications, income guidelines and loan limits can be obtained by contacting the Rural Housing Service.
Windham & New London Counties:
Norwich Service Center
238 West Town Street
Norwich, CT 06360
Phone: (860) 859-5218, x. 200 or x. 201
Tolland, Middlesex, Hartford, Litchfield, New Haven & Fairfield Counties:
Windsor Service Center
100 Northfield Drive, 4th floor
Windsor, CT 06095-4729
Phone: (860) 688-7725, x. 130
Reverse Mortgages
If one or both of the homeowners on the title is over age 62, you may want to consider a reverse mortgage. For more information, read the Federal Trade Commission's fact sheet, Reverse Mortgages: Get the Facts Before Cashing in on Your Home's Equity.
CHFA offers a reverse annuity mortgage that allows a low-income homeowner who is at least 70 years of age, with a need for long-term care or supportive services, to use the equity in his or her single-family home, condominium or planned unit development to provide a monthly tax-free cash payment or lump sum at the closing.
Phone: (860) 517-3502
1-877-571-CHFA (2432)
Emergency Mortgage Assistance Program (EMAP)
EMAP is administered by CHFA to provide emergency mortgage assistance payments to eligible homeowners suffering a financial hardship. Assistance is in the form of a 30-year, fixed rate fully amortizing loan.
Prior to commencing a foreclosure proceeding against a borrower, lenders are required to give the borrower a notice by registered or certified mail indicating that the borrower has 60 days from the date of the notice to confer with the lender or have a face-to-face meeting with a HUD-approved housing counselor in an attempt to resolve the delinquency or default. The notice must inform the borrower about the EMAP program. If the lender and borrower are unable to resolve the delinquency or default, the borrower has 60 days from receipt of the written notice to apply for EMAP. EMAP is not available to borrowers with FHA-insured loans.
A borrower already in foreclosure may qualify for EMAP. If such a borrower (1) does not meet the criteria for CT FAMLIES AND (2) has taken the necessary steps to negotiate with their lender directly OR through a face-to-face meeting with a HUD-approved housing counselor AND (3) is unsuccessful in resolving their delinquency or default, they may apply for EMAP.
Phone: 860-571-3500
1-877-571-CHFA (2432)
Email: EMAPinfo@chfa.org
Homeowner's Equity Recovery Opportunity (HERO) Loan Program
The HERO loan program permits CHFA to purchase eligible mortgages directly from lenders and place the borrowers on an affordable repayment plan. Under this program, a borrower must have failed to qualify for CT FAMLIES or EMAP. CHFA would determine if the borrower is eligible for HERO and CHFA must successfully negotiate with the borrower’s lender to sell the mortgage to CHFA. CHFA would then modify the repayment terms to make the loan affordable to the borrower. Currently, several options are being developed. For more information, contact the CHFA Special Programs Call Center at:
Phone: 860-571-3500
1-877-571-CHFA (2432)
Email: HEROinfo@chfa.org
Social Service Programs
2-1-1
211 is a partnership between the State of Connecticut and United Way of Connecticut to provide a single source of information to Connecticut residents to assist them in locating community services, human services and crisis intervention services in your area. Professional call specialists help callers assess their situation and find appropriate services using a comprehensive database of human service resources. You can learn about federal and state assistance programs you may qualify for by completing a short survey using the 2-1-1 Navigator.
Connecticut Association for Community Action (CAFCA)
CAFCA is an organization comprised of 12 community-based agencies that act as a third-party facilitator to help develop mutually agreed upon solutions to identified problems, which may include back rent or mortgage payments. In addition, CAFCA agencies assist their clients in finding employment and training, day care, energy and heating assistance, food pantries, homeless shelters and other services. Contact CAFCA to determine the agency that services your area.
Phone: (860) 832-9438
Connecticut Department of Social Services (DSS)
DSS is a state agency that provides a broad range of services, including housing-related services, offered through DSS regional offices and through direct grants to municipalities and community-based agencies. The Eviction and Foreclosure Prevention Program (“EFPP”) is designed to prevent evictions and foreclosures through mediation and includes a Rent Bank operated by 12 community-based agencies, which agencies are part of the Connecticut Association for Community Action. A trained mediator acts as a third-party facilitator to help develop mutually agreed upon solutions to identified problems, which may include back rent or mortgage payments. Rent Bank provides assistance in paying rent or a grant toward a mortgage payment to low-income and moderate-income households who are at risk of becoming homeless or are in imminent danger of eviction or foreclosure. For contact information to access this program, call Infoline at 211.
DSS, the Connecticut Housing Finance Authority, United Way’s 2-1-1 Infoline, the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture – Rural Development are founding sponsors of a free housing registry to help people find accessible and affordable rental housing in Connecticut.
Phone: 1-877-428-8844 Español: 1-877-428-8844, ext. 204
Pets are not only companions, but part of the family. If you are faced with foreclosure and need to move to a location where pets are not allowed, or if you can no longer afford to maintain your pet, please do not abandon your pet. Try to find a friend, co-worker or family member willing to accept your pet into his or her home. If you cannot find a temporary or new home for your pet, there are animal shelters and animal rescue organizations that may be able to help. One of the following organizations may be able to assist you:
Connecticut Humane Society
Phone: 1-800-452-0114 (Newington Branch)
860-442-8583 (Waterford Branch)
203-227-4137 (Westport Branch)
SPCA of Connecticut
Phone: 203-445-9978
No Paws Left Behind, Inc.
Phone: 281-717-0055
www.Petfinder.com (for a listing of pet shelters)
Veterans
The State of Connecticut Department of Veterans’ Affairs, Office of Advocacy and Assistance provides assistance to veterans, their eligible spouses and eligible dependents in obtaining veterans benefits under federal, state and local laws. For more information, contact the Veterans Info Line:
Phone: 1-866-9CT-VETS (1-866-928-8387)
The Soldiers’, Sailors’ and Marines’ Fund is an agency of the State of Connecticut established to assist needy wartime veterans and their families and is administered by The American Legion. Connecticut veterans requiring assistance may contact a full-time Veterans Aid Investigator to discuss their situation, the assistance that might be available and how to apply. Assistance, which may include help with mortgage interest payments, is provided for temporary periods only.
Phone: 1-800-491-4941
The U.S. Department of Veterans Affairs Home Loan Guaranty Program assists eligible veterans, active duty personnel, Reserve members and National Guard personnel with purchasing and retaining a home. If you have a VA loan and are having a problem making payments, the program may be able to arrange a repayment plan or other alternative to foreclosure. For home loan counseling, contact the Regional Loan Center for Connecticut at:
Phone: 1-800-827-6311 or 1-800-827-0336
Legal Services
Statewide Legal Services
Statewide Legal Services is a legal aid telephone hotline program that assists low-income individuals with noncriminal legal matters, including foreclosure. Contact Statewide Legal Services directly to determine if you meet the income limits to qualify for services.
About Foreclosure - A Home Owner's Guide
Phone: (860) 344-0380 (Central Connecticut & Middletown area)
1-800-453-3320 (All other regions)
Consumer Law Project for Elders (CLPE)
CLPE, a public service of Statewide Legal Services, provides FREE legal assistance to Connecticut seniors 60 and over who have consumer questions or problems, including debt collection, predatory lending and identity theft.
Phone: 1-800-296-1467
Connecticut Fair Housing Center
Connecticut Fair Housing Center serves as a resource for borrowers, housing counselors, consumer attorneys and policy makers on foreclosure prevention, responsible lending and mortgage lending discrimination issues. The Center also refers homeowners facing foreclosure to the Foreclosure Prevention Pro Bono Panel, which is a network of attorneys providing pro bono legal representation to low-income homeowners who are in danger of foreclosure or who may be victims of predatory lending.
Phone: 860-247-4400 (Hartford area)
203-772-3247 (New Haven area)
Foreclosure Prevention Pro Bono Panel
Phone: 1-800-453-3320
Lawyer Referral Service through the Connecticut Bar Association
If you do not qualify for Statewide Legal Services or are not over 60, you can contact the bar association in your county, which has a lawyer referral service. The referral service will set up an appointment for you with an attorney in your area. There is a flat fee for a half-hour consultation and additional services will be at the attorney's market rate.
Appearance Form and Foreclosure Mediation Program
Foreclosure is a court process and you must follow the process carefully to protect your rights. If you have been served with a summons and complaint and cannot hire an attorney to represent you or you do not qualify for free legal assistance, you may represent yourself. The Judicial Department’s website offers FAQs for persons who wish to represent themselves in court, which includes information about filing an Appearance form. Filing an Appearance entitles you to receive all court notices and calendars concerning your foreclosure at the address you provide in the Appearance.
Foreclosure Mediation Program
Foreclosure Mediation Program is a voluntary program that was established effective July 1, 2008, by the Chief Court Administrator in each judicial district, in accordance with Public Act 08-176. The program was established to assist homeowners whose one-to-four family, owner-occupied residential property in Connecticut is the subject of a foreclosure action. If you received your summons with a return date after July 1, 2008, information about the availability of this program and a copy of a Foreclosure Mediation Request form (Form JD-CV-93) should have been attached to the front of the complaint served upon you.
To take advantage of this free program, the borrower must file an Appearance Form, if not already done so, and a Foreclosure Mediation Request.
If you have questions about the Foreclosure Mediation Program, please contact Roberta Palmer at 860-263-2734, or email her at Roberta.Palmer@jud.ct.gov.
