Foreclosure is the legal procedure by which the lender in a mortgage arrangement takes possession of the property (usually a house) that secured the loan. This is done when the Torrington, Connecticut debtor has repeatedly failed to make their payments. Foreclosure usually results in the property being sold in an auction. Banks usually want to get rid of the property as soon as possible, even if it means taking a financial hit, and an auction is the simplest 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 supervises the sale, and makes sure that the proceeds first go to the lender, and then to any other entities that may 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 borrower owes, the bank cannot go after the debtor for the remainder. You should consult with an lawyer in Torrington, Connecticut to see if this is the case. However, this usually doesn't apply if the mortgage has been refinanced.
How Can I Avoid Foreclosure in Connecticut?
First of all, you shouldn't dismiss the problem. You should stay in contact with your bank, and be honest with them. Ignoring the issue will not make it go away. You should remember that banks in Torrington don't want your house. While the foreclosure process can be devastating for the homeowner, it's no walk in the park for the bank, either. They expected to make a profit through interest on the loan paid over time, and foreclosure is a last resort, allowing them to cut their losses and move on. If you are honest with them, lenders will usually try to accommodate your changed financial situation, to avoid a default on your part, and the necessity of foreclosing on their part.
If you can't work things out with your lender, there are other avenues. You can try a "short sale," which is when you sell your house for whatever amount you can get for it, and use the proceeds to pay your mortgage. If the house sells for less than you owe, the bank still receives those proceeds, but the remainder of the loan will be forgiven. You may also consider a "short refinance" which allows a portion of the debt to be forgiven, while refinancing the rest, hopefully under better terms.
How Can A Torrington, Connecticut Attorney Help?
If you are facing foreclosure, a good Torrington, Connecticut real estate lawyer can help. While keeping your home might not always be possible, an attorney can increase your odds of success, and help you minimize the negative impact if you do end up losing your home.