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Dear Legislative Staffer:
In Connecticut, 1,700 new foreclosure actions are filed each month - an increase of more than 102% in just three years.
According to RealtyTrac ( www.realtytrac.com), Connecticut ranks 14th in the nation in the number of foreclosures with 1 in every 648 households experiencing difficulty paying their mortgage.
In an effort to ensure that the constituents who call you for help receive accurate and timely information about the foreclosure process, the Connecticut Fair Housing Center has put together some frequently asked questions with answers. |
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10 Frequently Asked Questions About Foreclosures
For a printable version of this fact sheet, click here.
1. Who can I call for help if I am in foreclosure or fear I may be soon?
- The best source of help is a HUD-Approved housing counselor. You can find a housing counselor near you by calling (800) 569-4287 or by going to www.makinghomeaffordable.gov.
- You can also call the Connecticut Housing Finance Authority (877) 571-2432 to link to a housing counselor and learn more about financial assistance options to prevent foreclosure.
- The Connecticut Department of Banking Foreclosure Assistance Hotline can direct you to a housing counselor in your area and other assistance resources. You can reach the Hotline at 1-877-472-8313. The Department of Banking also maintains and regularly updates a 45 page booklet describing all of the resources available to Connecticut homeowners facing foreclosure. The current version of this booklet is available on line at http://www.ct.gov/dob/lib/dob/Foreclosure_Booklet_0309.pdf.
2. Do I have to wait until I receive papers from a court before I get help?
No. If you are behind on your mortgage, even if you are just 30 days late, you can get help. Call a housing counselor if you would like help getting in touch with your loan servicers to work out a payment plan or to determine if there is any way to restructure your mortgage.
3. What should I do when I receive notification of foreclosure from my lender?
- Call the numbers listed under "Who can I call for help?" - #1 above.
- Before the foreclosure case starts in court, you will receive letters from an attorney hired by your loan servicer telling you that they intend to pursue foreclosure. If you receive these letters, you will know that foreclosure is imminent and you should seek help immediately.
- You will know the foreclosure case has started in court if you find documents from a court left at your door. These documents will have a court notice warning you that you could lose your house. Don't ignore this court notice!
- Follow the instructions that come with the court notice to file an Appearance and a Request for Mediation. Participating in mediation will likely be your best opportunity to speak directly to your lender! If you do not understand the instructions, go to the courthouse listed on the papers and ask for the court clerk or ask your housing counselor.
4. Where can I find a lawyer to represent me?
Unfortunately, there are very few lawyers who have experience representing homeowners in foreclosure. To find one who may be able to represent you:
- If you are not low-income, you can try contacting your county bar referral service. The referral services generally charge $25-35 for a 30 minute consultation with a local attorney, and the attorney will tell you at that time what the fee would be for additional services. This is one way to find a lawyer who might assist you.
Hartford, Litchfield, Middlesex, Tolland and Windham Counties Call: (860)525-6052
Fairfield County
Call: (203)335-4116
New Haven County
Call: (203)562-5750
New London County (M-W-F)
Call: (860)889-9384
- If you are low income, call Statewide Legal Services at 1-800-453-3320 to see if they can find a free lawyer to represent you.
5. If I file a request for mediation, does this stop the foreclosure?
No. Your foreclosure case will continue even though you are in mediation. However, until mediation is over, the court will not make a final decision on your case, and your lender cannot take your house away.
6. Does the lender have to enter into mediation? (Legislation pending as of 3/20/09 may change this)
If you file your appearance and the mediation request by the deadline, the lender must participate in the mediation sessions, but the mediator can't force them to modify your loan or to withdraw the lawsuit. If you go to a housing counselor in advance, however, the housing counselor can help you prepare a good loan modification proposal. That will increase your chances of saving your home.
7. My mortgage was "modified" and my interest rate lowered, but I still can't make the monthly payments, what else can I do to save my home?
Frequently loan modifications offered by lenders are not realistic over the long term. Talk to a housing counselor to figure out how much you can afford to pay. Your housing counselor will help you negotiate for a more affordable modification, if possible. If you have already spoken to a housing counselor for the first modification, or if you cannot afford anything offered by the lender, you should think seriously about finding a more affordable place to live. This may involve selling your home or allowing the foreclosure process to continue until there is a judgment against you.
AVOID DEALING WITH ANYONE WHO OFFERS TO GET YOU A BETTER LOAN MODIFICATION FOR A FEE. There are many scam artists preying on homeowners in foreclosure and they may take your money and do nothing. They do not provide any assistance different from what you will receive from a housing counselor at no charge.
WE RECOMMEND THAT YOU NOT DEAL WITH ANYONE WHO OFFERS TO BUY YOUR HOME AND RENT IT BACK TO YOU. Often such offers are scams that result in rental payments so high that you may never be able to buy your house back.
8. Can I stay in my home while the foreclosure process continues?
Yes. If you are a homeowner or a tenant, you can stay in your home until a final decision in the foreclosure case. If the lender wins the foreclosure case, the judge will make a final decision - called a "judgment" - and you will receive a notice of that judgment in the mail. It is important to read this notice because it will give you the deadline for you to leave your house. It is important to know and understand this deadline.
If the notice you receive states that there has been a "Judgment of Strict Foreclosure," the notice will give a "law day." On this "law day," the title to your house will pass automatically to your lender without any further notice or action. After the "law day" passes, you can be evicted at any time.
If the notice you receive states that there has been a "Judgment of Foreclosure by Sale," the notice will give a "sale date." On this "sale date," an attorney appointed by the court - called the "Committee" - will hold an auction and sell your house. After the court approves the sale, you can be evicted.
In either case, don't wait for the "law day" or "sale date" to come before making plans. If you receive a notice of a final judgment in your case, make plans to move so you are not rushed at the end and run the risk of becoming homeless.
If you are a tenant and your landlord is in foreclosure, call Statewide Legal Services at 1-800-453-3320 for advice on whether you will be allowed to stay after the foreclosure is over. Sometimes tenants are allowed to stay despite the foreclosure, other times they must move.
9. What are EMAP, HERO, and CT FAMLIES? Who should consider it?
EMAP, HERO, and CT FAMLIES are special mortgage programs designed to help people who cannot afford their current mortgage. The eligibility requirements are complicated so if you want to save your house, you should speak to a housing counselor or CHFA as early as possible to see if you are eligible for one of these loans.
The EMAP program, also called the Emergency Mortgage Assistance Program, assists some homeowners in paying their mortgage in exchange for an additional lien against their house. CHFA or your housing counselor can help you find out if you are eligible for this program.
The CTFAMLIES program also known as the Connecticut Fair Alternative Mortgage Lending Initiative and Education Services program was started in 2007 to assist homeowners in refinancing into a more affordable mortgage. This program may help if you have an adjustable rate mortgage or a fixed rate mortgage that is current, but no longer affordable. CHFA or your housing counselor can help you find out if you are eligible for this program.
Finally, the HERO program or Homeowner's Equity Recovery Opportunity Loan Program permits CHFA to purchase the mortgages of some homeowners refinance those borrowers into a CHFA mortgage with an affordable repayment plan. CHFA or your housing counselor can help you find out if you are eligible for this program.
The Department of Banking booklet on Avoiding Foreclosure also includes more detailed descriptions of each of these programs.
10. Am I eligible for any of the new foreclosure prevention programs announced by President Obama?
There are two programs for homeowners announced by President Obama that are part of a program called "Making Home Affordable." One is for homeowners who want to refinance and have a loan that is owned by Fannie Mae and Freddie Mac. To find out if you have a loan owned by Fannie Mae or Freddie Mac and if you qualify for the refinance program, you can go to www.makinghomeaffordable.gov.
The second program announced by President Obama would modify your mortgage so that you are only paying 31% of your gross monthly income for your mortgage. To find out if you qualify for that program go to www.makinghomeaffordable.gov.
There are no telephone numbers to get information about the Making Home Affordable programs. However, a housing counselor may have more information and can be contacted by telephone. (See # 1 above).
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Connecticut Foreclosure Facts
In a time of fiscal crisis, the Center's work is critical for all Connecticut residents.
· In Connecticut, subprime loans and, as a result, foreclosures, are spread throughout the State. See the attached map which illustrates the areas of heavy foreclosure concentration in Connecticut.
· There are currently nearly 5,000 houses in the hands of banks and mortgage companies.
· Each foreclosed property costs a town nearly $20,000 in lost property taxes, unpaid utility bills, property upkeep and maintenance.
· Foreclosures will cause Connecticut home values to fall by $43.8 billion by the end of 2009.
· Foreclosures will cost Connecticut towns $17.4 million in lost property taxes in 2008 and 2009. |
Many Foreclosures Are Preventable
· More than 54% of families who go through court-supervised foreclosure mediation obtain a loan modification that makes it possible for them to KEEP their homes.
· Yet only 30% of families facing foreclosure appear in court and request mediation.
· More than 60% of families in foreclosure have no attorney and are forced to navigate the complex court system on their own.
· Homeowners who don't understand the court process risk losing their homes even while they work to find alternatives to foreclosure, through CHFA programs, loan modifications, home sales and other solutions.
· With legal representation or basic legal information, homeowners know how and when to appear in court and can better explain their situation, and their efforts to obtain help, to judges. This will decrease the chance that foreclosure will move forward while there is still hope of saving the home. |
What is the Connecticut Fair Housing Center doing to turn back this frightening tide?
· Teaching classes every week for homeowners in foreclosure so they have the basic information they need to participate in their foreclosure cases.
· Reaching out to homeowners in foreclosure to inform them of the advantages of requesting mediation.
· Finding free attorneys to represent homeowners facing foreclosure.
· Creating step-by-step written instructions for homeowners in foreclosure who cannot find affordable legal representation.
· Training and coordinating paralegals and attorneys who are volunteering their time to assist homeowners in foreclosure - currently the only organization in Connecticut providing this service.
· Providing legal support for the work of the HUD-approved counseling agencies. |
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The Connecticut Fair Housing Center Works for all of Connecticut's Residents
The Connecticut Fair Housing Center not only assists homeowners in foreclosure, but also works to ensure that all of Connecticut's residents have access to the housing of their choice. Since receiving State funding in 2007, the Center has:
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Made more than 750 units of affordable housing available to people who receive rental housing assistance, such as RAP or Section 8.
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Enabled nearly 100 people with disabilities to keep their homes.
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Obtained more than $1.5 million in free legal services from some of the country's best law firms for Connecticut residents in danger of foreclosure or experiencing housing discrimination.
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Assisted more than 700 housing providers, management companies, landlords, developers, and housing authorities in understanding and complying with the fair housing laws.
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| Some of the People Helped by the Connecticut Fair Housing Center.
Cora, (1st photo from right, above) who lives in Windsor Locks, is just eleven and has a severe seizure disorder. When her doctor recommended a service dog to help prevent seizures, her landlord said no. With the help of the Center, Cora now has Laser. Since Laser came to live with her, Cora has been able to reduce her emergency hospital visits from three or four a year to zero, no longer needs mental health counseling, and has reduced her dependence on anti-seizure medication for a HUSKY cost savings of $24,000 a year.
Yolanda (second photo from right, above) sought the Center's help when she realized she was the victim of predatory lending. The Center connected her to a free lawyer through the Foreclosure Prevention Pro Bono Panel and is working with her to help her keep her home in East Windsor.
David (3rd photo from right, above) believed he had finally found a safe place to live in New Haven that would allow him to continue his recovery from drug and alcohol abuse. Unfortunately, the city threatened to shut down the house where he was living. With the help of the Center, David and those living with him have continued their road to recovery in a safe and secure home without further threat of removal.
Jackie (4th photo from right, above) was thrilled to receive a state Rental Assistance Program voucher to help pay her rent at her New Haven apartment. Unfortunately, when she asked if could use her voucher, she was told the owner did not "want that kind of people living here" adding that the complex had never taken vouchers and never would. The Center helped Jackie keep her apartment and the 300 affordable units in her building are now available to rental voucher holders.
James and his wife (not pictured) live in a condominium which they own in Newington. He is unable to walk far distances without experiencing chest pain and shortness of breath. When he asked for permission to park next to his condo unit, the condominium association said no. With the help of the Center, James has his parking place and remains living in his own home.
Denise (not pictured), who uses a wheelchair, was desperate to move from her second floor walk-up. She found an accessible apartment that met her needs perfectly in Unionville. Unfortunately, her landlord refused to let her come back after she was medically cleared to return from a brief hospitalization. The Center is representing her in an attempt to change this landlord's illegal practices so that other disabled residents will not be forced into nursing homes. |
If you have additional questions about foreclosure or any of the Center's work, please do not hesitate to contact us.
Sincerely,
Erin Kemple
Connecticut Fair Housing Center
Hartford,CT 06106
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