Foreclosure Prevention Information
Is your Connecticut home is heading towards foreclosure? Are you late on your mortgage payments? What can you do today to preserve residency your home?
In June 2012, the Connecticut State Legislature made important revisions to the Emergency Mortgage Assistance Program Statute. The following changes are in effect immediately:
- Borrowers with primary mortgages insured by the Federal Housing Administration (FHA) are now eligible to apply for an EMAP loan.
- Borrowers who have received foreclosure notices to due delinquent taxes or condominium fees or other assessments can now be considered for EMAP, providing the applicant has a mortgage on the property.
- Borrowers must disclose all pension and retirements funds, but are allowed to retain up to $100,000 in pension and retirement funds up to $ 100,000 will be excluded from consideration for EMAP eligibility, but these funds must be disclosed as part of the applicant’s assets.
The Emergency Mortgage Assistance Program (EMAP) provides temporary monthly mortgage payment assistance for up to five years to eligible Connecticut homeowners who are facing foreclosure due to a financial hardship. An EMAP loan is secured by a fixed-rate, subordinate mortgage on the homeowner’s residence.
It is important to note that EMAP loans must be repaid and funding is limited. The repayment of an EMAP mortgage starts when the homeowner’s financial condition sufficiently improves.
CHFA is committed to helping Connecticut’s homeowners who are facing financial hardship as a result of circumstances beyond their control. Homeowners who believe they might be eligible for an EMAP loan should apply directly to CHFA. (See, CHFA Customer Call Center for contact information.)
The FHA Short Refinance option is targeted to help people who owe more on their mortgage than their home is worth – or ‘underwater’ – because local markets saw declines in home values. Short Refinance and other programs like Home Affordable Modification Program (HAMP) and Home Affordable Refinance Program (HARP) have been put in place to help the FHA meet its goal of stabilizing housing markets by offering a second chance to up to 3 to 4 million struggling homeowners through the end of 2013.
To be eligible for a new loan, the homeowner must owe more on their mortgage than their home is worth and be current on their existing mortgage. The homeowner must qualify for the new loan under standard FHA underwriting requirements and have a credit score equal to or greater than 500. The property must be the homeowner’s primary residence In addition, the existing loan to be refinanced must not be an FHA-insured loan, and the refinanced FHA-insured first mortgage must have a loan-to-value ratio of no more than 97.75 percent. Interested homeowners should contact their lenders to determine if they are eligible. It was reported by NYT March 12, 2011 that over 22 lenders are participating now.
You may have options.
There is Foreclosure Mediation provided by the Connecticut Court System. Depending on your personal situation you may have a variety of choices.
Maybe you just want to talk to someone who cares about people and improving their situation in this difficult market.
I will propose a course of action that you can discuss with your family and legal counsel to make a better out come from this difficult situation.
David Carr, REALTOR two zero three six two seven four two one three
Knowing what the timeline is in Connecticut for foreclosure procedures is the most critical piece of the puzzle that you need. It does not matter how good your plans for stopping foreclosure may be if you do not know how long you actually have to save your home. Go to the courthouse and review your file in the Clerk of Court Office. You have case number on the legal notices from your local Sheriff or Marshall. Do not ignore any notices. Show up for every court hearing. Have your loss Reorganization Proposal ready to present to the court.
It is very important to have detailed written description of your situation that describes your good intentions, your previous responsibility for the property, other good information about yourself, your family, your employment, your commitment to the community, how the situation may have occurred out of your personal control, like your home’s market value has dropped, The mortgage is in or near default status or you have fallen on hard times. You must submit a letter of hardship that explains why, and your desire to reach an agreement with the bank. This is your Hardship Proposal. Banks do not want more properties vacant and more loans in default. Connecticut has court mandated foreclosure prevention programs as well.
Obtain a current market value for the property and suggest the bank write a Loan Modification to forgive the previous debt. This can preserve your credit. The bank can lose more money and time evicting you and having a vacant property on the market for 100 days or more depending where you live. The bank may get more money making an agreement with you now. Everybody wins! Would you buy your house for market value today? Work with a REALTOR like me to get the real understanding of your market and unique situation.
The next step may be putting your property on the market and sell it for a shortage of funds (Approved Short Sale). You may want to avoid this because you want to live in your house. But if the bank takes possession of your home you may have leave at some point. There is no standard time period for this. The bank will get that sales amount less all the court and attorney fees, property preservation, Real Estate Sales Fees and possible problems that happen to vacant properties. You may have to pay taxes on forgiven debt or be asked to repay debt in the future.
Understand all of the paperwork that your mortgage company needs from you. No matter what solution you work out with your bank, you will need to send them documentation. Get a check-list from them before you start sending information. This list will be the cover sheet for your Reorganization Proposal. You are offering to limit the losses to the bank by buying the house now. You are also offering to create good will by making a public statement about how your lender helped you.
There are no upfront fees or out of pocket expenses for any of this information which is provided as an introduction to my professional services. MY intention is to help you achieve the best results in a difficult situation
There are generally four pre–foreclosure options, offered by lenders: 1) loan modification, 2) forbearance agreement, 3) short sale, and 4) deed–in–lieu of foreclosure. I will discuss these with you, and advise you to consult an experienced attorney before you sign any proposals offered by your lender.
As Your REALTOR I can be part of your team to assist you evaluating your current options, obtaining the best outcome for your situation, and communicating as your designated agent with your lender. My full time experience with Bank Owned property 1998 as a Connecticut Licensed Real Estate Agent can help you reach a more favorable outcome from a difficult situation.
David Carr Copyright 2013 by David Carr. All Rights Reserved
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