If you find yourself in a financial situation that leaves you worrying about a possible foreclosure on your property, understanding the foreclosure process in Connecticut is an important part of how easily you navigate through.
Understanding the Foreclosure Process in Connecticut
Foreclosure is the legal process in which your mortgage lender, in attempts to recover the balance of a loan from a borrow who has stopped paying, forces a sale of the property used as collateral for the loan. In other words, you borrow money from the bank, can no longer make monthly payments and after three consecutive months of nonpayment, the bank will come to begin the process of taking ownership of the property.
Foreclosure is not someplace we actively hope to find ourselves. But it’s definitely not the end of the world and there are options for you still!
When you are understanding the foreclosure process in Connecticut, especially the timeline, it allows you the upper hand on making decisions throughout the process!
The Basic Stages of A Foreclosure
Here in Connecticut, all foreclosures are judicial foreclosures. What this means, is your mortgage company will have to get the courts involved in order to foreclosure on your property by either a foreclosure by sale or strict foreclosure.
Connect with us by calling 860-589-4663 or through our contact page if you think a foreclosure is about to begin on your Bristol, Connecticut property or already has begun!
Foreclosure officially begins after the 120 day nonpayment period ends and when a marshal comes to serve you a summons. You will only have a foreclosure process initiated if you have NOT made your mortgage payment in 120 consecutive days. Prior to the legal process beginning, your lender will have sent out many notices warning those involved of the next steps.
‘Foreclosure By Sale’ Versus ‘Strict Foreclosure’
After a summons is served to you, more court documents will be filled out by both you and the mortgage company over the coming weeks, you will also go through a mediation phase. During this phase you can request extra time to sell or refinance the home, let your children finish out the schoolyear or even time to move if there are extenuating circumstances and try to work out payments.
Depending on the lienholders, the value of the property and how mediation went; a judge may decide to take the route of a Strict Foreclosure and set a Law Day. This is the last date you have to get your loan back in good standing and stay in your home. In order to do this, you must pay what you owe and typically the fees associated with the foreclosure. During this time, you can also try to sell your property or get a loan, but typically if there is no equity in your property, this could prove challenging.
If your property is unable to be sold for the price necessary due to condition, then you can ask to negotiate with your lender for a short sale. This is when your lender agrees to accept less money than what is owed in order to help you out of the situation.
If there is equity in your home, you can ask for a Foreclosure by Sale. In this case, the judge will set a Sale Date. This is the date that your property will be sold by auction. On the sale date, the property will be auctioned to the highest bidder. The proceeds will first pay off the debts to the lienholders, the cost of the court and if there is any money left over, it goes to you.
In both of these cases, you can try to get a contract on your property and sell it prior to the dates set by the judge. A similar series of payouts will occur, first the lien holder(s) and debt(s) will be paid off and then fees and then you.
After the “Law Day” or “Sale Date”
After a foreclosure is complete, the loan and debts are paid off with the proceeds. However, if this amount is not enough and the bank requests, a judge may issue a deficiency judgement.
This is where the bank gets a judgement against you for the remaining funds owed.
This is why if you are trying to walk away with a clean slate, you must make sure your property is sold for enough to cover the final payout with debts and fees included.
If you have not moved out by these dates either, the bank or new owner will likely begin the eviction process. Each state and situation varies.
It is important to keep in mind that every situation, every foreclosure is unique.
Generally, however, it is best to avoid a foreclosure. Instead, call the bank, or work with a reputable real estate investor like us at Valley Residential Group LLC to help you negotiate options and dates and hopefully avoid having to carry out the full foreclosure.
In many instances, we can make an offer on your home and buy ASAP! This will help you satisfy your current lienholders and move on in a more planned out and stress-free manner.
If you need to sell a property near Bristol, we can help you.
We buy houses in Bristol Connecticut like yours from people who need to sell fast.