Foreclosure is the legal process by which the lender in a mortgage arrangement takes possession of the property (typically a house) that secured the loan. This is done when the Stratford, Connecticut debtor has repeatedly failed to make their payments. Foreclosure typically results in the property being sold in an auction. Banks typically want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the easiest way to do this.
In all states in the U.S., including Connecticut, there is an option to go through foreclosure via judicial sale, in which a court oversees the sale, and makes sure that the proceeds first go to the lender, and then to any other entities that might have a lien or other interest in the property (in order of priority), and, finally, to the borrower, if anything is left. In many states, original mortgages are considered non-recourse loans, meaning that if the house is foreclosed and sold for less than the debtor owes, the bank cannot go after the debtor for the remainder. You should consult with an Attorney in Stratford, Connecticut to see if this is the case. However, this typically doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Connecticut?
First of all, you shouldn't ignore the problem. You should stay in contact with your bank, and be forthright with them. Ignoring the issue will not make it go away. One should remember that banks usually don't want to take your house in Stratford. They issued your mortgage expecting to earn a profit on the interest. Taking possession of, and selling, your house is a last resort for them. Therefore, if you are forthright with them about your financial situation, they are likely to make reasonable accommodations to prevent you from defaulting.
If no deal can be worked out, or the mortgage payments have become prohibitive, you might consider a "short sale". While the lender has to consent to it, many will take a moderate loss if it means avoiding foreclosure (which lenders usually treat as a last resort). This allows you to sell the house for whatever price it can fetch on the current market, and hand the proceeds over to the bank. If the sale nets less than the balance, some or all of the deficiency might be forgiven. There is also the option of a "short refinance," which forgives a substantial portion of your mortgage debt, and refinances the rest.
How Can A Stratford, Connecticut Attorney Help?
If you are facing the possibility of foreclosure, a good Stratford, Connecticut real estate Attorney can help. At the very least, they will be able to inform you of your legal options.