Foreclosure mediation is a court-sanctioned program wherein Connecticut law provides homeowners an opportunity to request a modification of their mortgage during the pendency of a foreclosure action.
While it is a well-intentioned program, it isn’t a full financial solution for the homeowner and it doesn’t properly assist in saving the home. 98% of the time, the proceedings are not run by Judges and mediators side with the Banks’ attorneys. Nonetheless, It provides homeowners a chance to meet with their bank’s attorneys and present their case for a resolution of the foreclosure problem. It’s an opportunity to have your lawyer speak to their lawyer. Don’t meet a Bank lawyer without an expert lawyer there on your behalf.
This is a great option if you’re properly prepared with a lawyer on your side and a good plan and proper documentation. It’s a court process, so you need an attorney, preferably one with the knowledge and experience to present a winning case. At The Law Offices of Neil Crane, LLC, our attorneys are experienced with various banks in the numerous foreclosure courts throughout Connecticut. There are thousands of foreclosures pending in Connecticut and you need to stand out from the crowd. Our attorneys know how to get your case noticed. We know what the banks want and need to hear.
Don’t go it alone and experiment with your home. Bank attorneys are trained with one goal – to take your home as promptly as possible.
Get educated and be prepared, because:
- Professional assistance from experienced attorneys can save your home
- Your first chance is your best chance
- Avoid common pitfalls
- Mediation takes knowledge, preparedness and persistence
- Mediation has strict time limits
Step #1: Analysis of your Full Financial situation
We will carefully analyze your full financial picture and determine the best options available to you, so that you can make the most informed decision possible. You do not have to allow your home to go into foreclosure, and you should only consider a short sale or a Deed-in-Lieu of foreclosure if it’s your goal to give up your home. Instead, understand all the alternatives that are in your best interests; including:
- Deed-in-Lieu of Foreclosure: A homeowner not wishing to keep their home may have no other debt problems other than a difficult first mortgage. In this case, a return of the property to the bank without further obligation for the mortgage can be the best option available.
- Chapter 7 Bankruptcy: Chapter 7 relief provides for the elimination of mortgage obligations and other unsecured debt. After Chapter 7 debt relief, you may be able to become current on monthly mortgage payments or negotiate a mortgage modification you can afford.
- Chapter 13 Bankruptcy: If a short sale isn’t right for you, a Chapter 13, can help you completely restructure all types of debt, stop foreclosure, and eliminate or modify unsecured debts, a second mortgage, credit lines or tax debts.
- Foreclosure defense: We can fight on your behalf to prevent improper and illegal foreclosure actions. With our specialized knowledge and experience, we can save your home from foreclosure.
- Foreclosure mediation: Foreclosure mediation is mandatory in Connecticut. Comprehensive financial documentation, a convincing hardship letter, a thorough understanding of what your lender wants out of the deal and specialized legal counsel is essential in achieving a modified mortgage with lower interest rates and the re-working of past-due balances.
- Mortgage modification: If you don’t want to short sell your home but need to solve back-due payments or obtain a lower interest rate, we can help you negotiate with your lender to rework the interest rate and terms of your mortgage. A comprehensive, well-prepared mortgage modification can lower your monthly payments and cure past due mortgage payments.
If you want to give up on your house, you can try a Deed-in-Lieu or a short sale.
- Deed-in-Lieu of Foreclosure: A homeowner not wishing to keep their home may have no other debt problems other than a difficult first mortgage. In this case, a return of the property to the bank without further obligation for the mortgage can be the best option available.
- A Short Sale means that your house is underwater/worth less than you owe, and you just want to sell it and give up. It’s a painful process, so you need advice early so that you know what you’re doing is correct, your goal, and what the process involves.
Step #2: Follow Connecticut Law On Foreclosure
Successful mediation requires prompt legal representation, comprehensive financial documentation and strong legal advocacy. Connecticut has provided mandatory mediation if promptly requested within fifteen (15) days of the Return Date. Despite promises under the national settlement with big banks, false promises of bank help and mortgage modifications causes thousands of homeowners to lose their houses in Connecticut mediations every year.
Step #3: Prioritize your Resources and save your mortgage money
With a plan and timeline in place, you need to prioritize your resources. Carefully analyze your monthly income and expenses. Take into account all other debts. No expense should have priority over your home. The number one mistake made by homeowners in foreclosure is not retaining an attorney to fight for them. The number two mistake is not saving unpaid mortgage amounts.
Save your mortgage money. It is essential that you save as much of your back-due mortgage balance payments as possible. This financial “cushion” and excellent legal help are the key to your successful future.
Step #4: Create a Mediation Plan
Foreclosure mediation has options. Determine what you would really like to do first. Banks will try to sway you in a direction that is either easy or good for them. You should decide what you want to do if it’s keeping your house or moving on.
Step #5: Determine a Timeline
Make sure you are aware of deadlines and build out a timeline of when information needs to be delivered. The foreclosure process can take as little as 3 months, or close to a year. Foreclosures generally take four to six months, or close to a year, most commonly ending with a law day or a foreclosure sale.
Step #6: Get your financial documents prepared
Follow the plan and timeline that your attorney has set for you and be sure to get your financial and mortgage documents filled out and returned in a timely manner. Good foreclosure defense and bankruptcy attorneys seeking to save your home will probably need the following documentation:
- Two months of bank statements for all open bank accounts
- Signed and dated current Federal Tax Return
- Current Utility Bill
- Hardship Letter detailing why you need the loan modification and why finance documents now show you’ll be successful
- General Financial Worksheet from your lender most refer to them as modification application.
- Two months of proof of income
- Pay stubs if you are a W-2 employee, operating reports if self-employed
- Please note that if you are self-employed, you will have to provide additional documentation of your income, operating reports, profit & loss statements, and reasons for fluctuating income.
In almost every instance the Bank requires that these documents be updated and resubmitted on multiple occasions. Banks are renowned for “losing” your documents. Be prepared to send and resend these documents through a diligent attorney.
Call Us to ensure you have the best opportunity to save your home
It is critical to put together a complete and accurate application because you often get only one opportunity to protect your home and your family from foreclosure. At The Law Offices of Neil Crane, LLC, we are committed to collecting a comprehensive amount of accurate financial information. We shape this information into convincing arguments that are easy for banks to process and understand. The result is that we have helped thousands of Connecticut residents save their homes since 1983.
After going through Foreclosure mediation, read about what to expect after foreclosure.