The avoid foreclosure glossary provides some key terms and information to help you avoid foreclosure, understand the foreclosure process and your options to avoid it. The information provided is from the Connecticut Department of Banking and is meant to be assistance to Connecticut residents. However many of the terms may pertain to the state of your residence. For information about assistance from your state CLICK HERE.

Appearance Form

• This form asks for your contact information so the court can reach you.
• It must be submitted along with the Foreclosure Mediation Certificate within 15 days after the Return Date.
• The Return Date starts the 15-day period to return both forms to the court.

Avoid Foreclosure Glossary

The avoid foreclosure glossary is a list of definitions of the foreclosure process

Bankruptcy

• Filing for bankruptcy may not save your home, but it can eliminate your personal liability to pay the debt, such as going after your bank account or wages.
• A Chapter 13 Bankruptcy may be an option if you have recovered your income and can afford to pay your old mortgage payment plus extra to catch up within three to five years.
• Talk to an experienced bankruptcy attorney before deciding to file for bankruptcy.

Foreclosure Assistance Hotline

• Connecticut residents who are behind on their mortgage or facing foreclosure can call the Foreclosure Hotline toll-free at 1-877-472-8313 for advice and guidance.

Foreclosure Lawsuit

• The lawsuit officially begins when you are served with a summons and complaint package by a Marshall.
• There are deadlines to complete the return file forms, so be on the lookout for the package.

Foreclosure Mediation Certificate

• This form determines your eligibility for the Foreclosure Mediation Program.
• You need to file this form within 15 days after the Return Date to get into mediation and get the 8-month hold in the foreclosure process.

Foreclosure Mediation Program

• The goal is to find a way for you and the lender to agree on a way to avoid foreclosure.
• The program puts an eight-month hold on the foreclosure lawsuit, during which the lender cannot foreclose on your home or push forward the process against you.
• The success rate for foreclosure mediation is high, and most homeowners reach an agreement with the lender to avoid foreclosure.
• The Foreclosure Judgment Hearing cannot happen until mediation is over, even if the eight-month hold of the case is up.

Eligibility for Foreclosure Mediation

• You must answer yes to the following questions on the Foreclosure Mediation Certificate to be eligible for foreclosure mediation:
  • Is this your home?
  • Is it your primary residence?
  • Is it a 1 to 4 family home in the state of Connecticut?
  • Are you the borrower?
  • Is this a mortgage foreclosure?
• Vacation homes, investment properties that are not the primary residence, unpaid municipal taxes or assessments, or condo charges are not eligible for foreclosure mediation.

Foreclosure Lawsuit

• In a judicial foreclosure, the lender files a lawsuit against you in court.
• You’ll receive a complaint, along with a summons giving you a deadline to file a written answer to the suit.

Foreclosure “Rescue” Scams

• Scammers may promise a loan modification or refinance, but these are almost always scams.
• Do not pay anyone to get a loan modification. There is free help available through HUD and CHFA approved housing counselors.
• Watch out for forensic audits, which are often scams. Hire someone local, licensed, experienced in foreclosure defense, and willing to go to court for you.

Foreclosure Sale

• A foreclosure sale is an auction that takes place if a person has a fair amount of equity in the property or if the United States has a lien on the property.
• The judge will set a sale date, and the highest bidder at noon on that date will buy the property.

HUD-Approved Housing Counselor

• If you are facing foreclosure and want the assistance of a HUD (Housing and Urban Development) approved housing counselor CLICK HERE. HUD professionals are trained and certified by HUD to provide free or low-cost housing counseling services to homeowners and renters. They are non-profit organizations that work to educate and assist individuals and families with housing-related issues, including foreclosure prevention. For more information CLICK HERE.

Lawsuit – Special Defenses

• An answer is your response to the lender’s complaint.
• A special defense is your argument for why you should be able to win and the lender should not be able to foreclose.
• Both the answer and the special defenses are optional, but it is important to be specific and, if possible, to consult with a lawyer.
• Not all cases will have a special defense. If you do pursue this option, carefully assess whether you have a defense before deciding to do so.

Law Day

• Law Day is the last day you will be the owner of the house.

Loan Modification

• A loan modification is a change to the original terms of your mortgage loan.
• It directly changes the conditions of your loan, unlike a refinance that replaces it with a new one.

Mediation: Two Phases

• The goal of mediation is to see if you and your lender can reach an agreement to avoid foreclosure.
• Mediation happens in the courthouse but not in an actual court. The meetings happen in small conference rooms or offices.
• Mediation can result in a loan modification or a short sale agreement.

Mediator

• A mediator is a court employee usually appointed by a judge.
• They are neutral and trained in foreclosure laws and all available programs for homeowners.
• The mediator’s job is to push you and the lender to reach an agreement.

Mediation Counselor

A mediation counselor assists disputing parties to focus on a mutual problem, discuss possible solutions, and agree upon a solution.

Pre-Mediation Meetings

• Homeowners meet one on one with the mediator to complete the forms and collect the documents needed for the lender to evaluate your request to avoid foreclosure.
• Within about 5 weeks after your return date you will get a packet of forms and other information about your loan from the lender’s attorney.
• Around the same time you will get a notice from the court with a date for your first one on one Pre-Mediation meeting with the Mediator.
• Do your best to complete the form and gather the information before the first meeting with the Mediator.
• The Mediator will talk to you more about your situation and help you figure out what else is needed. There may be more than one Pre-Mediation Meeting.
• Once the Mediator is satisfied that you have all of the information your lender needs, the Mediator will send your documents to the lender and you will enter the second phase.

Mediation Sessions with the Lender

• You’ll get your first Mediation appointment, i.e., a meeting with the Mediator and the Lender’s attorney to try to work something out.
• The Mediator has discretion not to refer cases to mediation. For example, if the homeowner is not participating. It is very important to go to your appointments and to gather the information the lender needs that you can stay in mediation, get the benefit of the hold on your foreclosure case, and make your best chance to work something out with your Lender.
• The vast majority of homeowners who participate in Foreclosure Mediation end up reaching an agreement with the lender to avoid Foreclosure.
• Most, but not all, will reach an agreement which keeps them in their home.
• Fewer than 25% of homeowners in Foreclosure Mediation have a lawyer representing them. If you are representing yourself then you certainly are not alone.
• Even if you had difficulty working with your lender in the past or if the Lender has previously told you there were no options for you, Mediation may result in you reaching an agreement.
• It is common for homeowners who have been denied for loan modification, sometimes even multiple times, to be approved for Mediation.
• Nothing is guaranteed, but Foreclosure Mediation is usually your best chance to work out a deal with your lender.

Return Date

• The Return Date starts the 15 days you have to get the two forms, Foreclosure Mediation Certificate and Appearance Form, back to the court.

Servicer Negotiating:

• Talking to lender about options
• Sending documents to request a loan modification
• Following up with lender about missing documents
• Continues throughout the foreclosure process even if the lender hires an attorney and sues you in court.
• Working with a housing counselor at this time is a huge help in gathering all of the paperwork your lender would need in negotiating with them.
• Keep notes of everyone you talk to, date and time
• Keep copies of everything received and sent to the lender, deadlines, making trial payments, options, etc. using a calendar, a notebook or a computer.

Notice of Intent to Accelerate

• First indication of a Foreclosure Lawsuit coming
• This is a letter from the lender asking you to pay all of the payments missed in 30 days or else the whole amount is coming due.
• But even if you are not able to pay, the lender still has to take you to court.
• You may also receive letters from the lender’s attorney but this doesn’t necessarily mean that you are in foreclosure yet.

SHORT CALENDAR

• When the judge makes a decision in many foreclosure cases which will all be scheduled for a court hearing at the same date and time. Unfortunately, a Short Calendar is not very short.
• You will get a notice in the mail telling you to go to court on a certain date, typically on Monday.
• On the Friday before your Short Calendar date, call the court clerk’s office and confirm that your case will actually be heard on your date.
• The reason is that cases automatically get scheduled for Short Calendar hearings when one side files something with the court, but if that side doesn’t call the court beforehand and affirm that they want the judge to hear their case that day, the Short Calendar hearing won’t happen. 
• Always call on the Friday before to confirm that you actually have a court date so that you don’t have to end up wasting a day in court for nothing. 

UNDERWATER

When a homeowner owes more on their mortgage than the home is worth, the home is said to be “underwater.” Being underwater on your mortgage can make it more difficult to avoid foreclosure, as you will need the Lender’s cooperation to sell the home for less than you owe. However, it is still possible to avoid foreclosure even if your home is underwater.

WORKOUT

A Workout is an agreement between you and your lender to change the terms of your mortgage to make it more affordable. This can include a loan modification, forbearance, or other options. A Workout can help you avoid foreclosure and stay in your home.

The avoid foreclosure glossary is a list of definitions and is not legal advice. The avoid foreclosure glossary is designed to assist you in understanding what takes place during the foreclosure process.