When you fall behind on your mortgage payments on your Connecticut home, it can feel like you’re drowning in debt.
Even if you’re able to make your monthly payment, catching up on a past due balance can be an overwhelming challenge.
There are a few options that can help you to avoid foreclosure in Connecticut and maybe even keep your house, even if you’re seriously behind in payments. Lots of properties in Connecticut have been lost to foreclosure, but there are many ways to avoid it before that happens.
You don’t want to put your family in a situation where you are homeless from foreclosure. Acting now to avoid foreclosure will reduce your chances that will happen. Let’s find out how we can do that in this article.
Help, I’m Late On My Mortgage Payments in Connecticut! 5 Things You Can Do To Help Your Situation
1. Bankruptcy
A lot of people think “I should file bankruptcy!”. That might be a terrible idea! This is usually the tool of last resort! There are a number of other solutions that are far easier and doesn’t do nearly as much damage as bankruptcy.
If you’re being crushed by lots of debt, bankruptcy can be a good way to negotiate with lots of lenders at once. It’s a lot of work, and it won’t help you avoid your mortgage. Some people think bankruptcy will wipe out all their debt and they can just start over free and clear. That isn’t true. You could be ordered to negotiate with your creditors for reduced amounts and a payment plan that could take decades to pay off. It will still damage your credit and you are still at financial risk. Different lenders will treat your circumstances in unique ways. You’d benefit from serious professional help – the best you can afford.
2. Reaffirm
This can be a good card to play, but it may come with some unseen penalties. Basically, reaffirming the loan is an additional commitment to pay. That means that even if you went through bankruptcy you are saying you are still liable for the debt. In some states where it’s allowed, an affirmation can create additional liabilities if your property goes into foreclosure and is auctioned.
3. Making Home Affordable (MFA):
If your mortgage qualifies, you might be able to participate in Make Home Affordable (MFA). It was a program started in 2009 right have the first housing crisis. Since it was created, MHA has helped homeowners avoid foreclosure by providing a variety of solutions to modify or refinance their mortgages, get temporary forbearance if they are unemployed, or transition out of homeownership via a short sale or deed-in-lieu of foreclosure. Any loans backed by Fannie Mae or Freddie Mac must be considered for MHA, and other lenders can choose to participate in MFA.
With MFA, your payments and/or interest rates might be lowered – even the principal balance (if your home is worth less than you owe). If you’re unemployed, you might be able to get your payments temporarily suspended or reduced.
MFA is a government program, so be prepared to deal with lots of paperwork. It ain’t free money – you gotta work for it.
4. Negotiate with your bank:
Lots of lenders routinely offer some level of assistance. You have to work hard at it, but you might be able to get your interest rate reduced or a temporary reduction in your payment.
Most of the time, lenders will want to steer you to refinance your loan – but by the time you’re a few payments behind, you probably don’t qualify for a reduction in interest rate. Your credit score will be damaged and you are considered a high risk. Lenders rarely do this if you are months behind because it costs them money to refinance and you’ve shown risky behavior.
You have to work really hard to negotiate with a bank. Usually, it takes lots of calls and the patience of a saint to get through the bureaucracy. Never, ever act rude. Ask for help from everyone you speak with, but don’t sound desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
People respect confidence and professionalism. Remember this is a business you are dealing with and they expect people to act business like. They won’t tolerate rudeness and one slip up can set you back a lot to repair that relationship.
If you’re in need of a temporary fix and want to stay in your home, most banks can be forgiving. Sometimes they’ll be willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to give them a lot more money in the long run. If they have to sell your house at a foreclosure auction, they’ll take a huge loss. If you can show them that foreclosing on your house will mean they lose more money in the process they will think twice about it. If they realize that keeping you in the how not paying them is going to cost them more in the long run they will auction your house away.
That sounds obvious, but for some reason, bankers seem to forget it when saying no to someone in need of help.
5. Borrow money from a private investor:
If you’re behind on your payments and need to sell fast, we can help.
In certain circumstances, we may even be able to help you stay in your home. It is rare and it can be difficult but depending on your situation we could figure out a creative way of staying in the house for a few months to help you transition, help you with relocation, offer you a few months to a year of free rent or maybe even long term in the same house.
We work with homeowners in Connecticut to find solutions to foreclosure problems.
We’ll let you know how we can help.