Foreclosure Law in Connecticut
In Durham, Connecticut, foreclosure is a legal process through which an entity which has issued a mortgage takes possession and/or ownership of the property that secured the mortgage, because the person who took out the mortgage has consistently failed to make payments on it. The property in question is usually a house.
When consumers have to deal with foreclosure, it almost always involves a home. The bank will usually take possession of the house, and then sell it at auction, to try to cover the balance of the mortgage. Banks normally want sell the property quickly, for as much money as possible.
In all states in the U.S., including Connecticut, borrowers have the option of foreclosure by judicial sale. This allows a court to oversee the sale of the property by the bank. The purpose of this is to get the house to sell for the highest price possible. While this might seem like something that would only benefit the bank, it is also a great benefit to the borrower, since it increases the likelihood that the sale will cover the full balance of the mortgage, preventing them from having to pay it.
Some states treat mortgages as "non-recourse loans." A non-recourse loan is one that is secured by the borrower's property, but for which the borrower is not personally liable. Basically, this means that a lender in a foreclosure can take the house that was mortgaged, but nothing else. If the house sells for less than the lender is owed, it cannot go after the borrower.
How to Possibly Avoid Foreclosure in Durham, Connecticut
It is absolutely necessary that you maintain a line of communication with your lender. Your can't expect your lender to accommodate your changed financial situation if they don't know about it. Ignoring the issue and hoping it will go away is the worst possible solution.
You must keep in mind that banks are in the business of lending money, not flipping property: the bank doesn't really want your house. To that end, they'll sometimes go to great lengths to accommodate your financial situation, whatever it may be. For banks, foreclosure is a last resort.
Because banks don't particularly enjoy foreclosing, they will probably be willing to work out an alternative payment plan with you, if necessary. However, if you think that this might be needed in the near future, you should contact your lender immediately. The sooner they know about it, the more options you have.
As a last resort, some borrowers consider a "short sale." In a short sale, the homeowner sells the house to the highest bidder, and uses the proceeds to pay off the remaining debt. If there is any extra from the sale, it goes to the borrower. If the sale price is worth less than what's left of the mortgage in Connecticut, the remaining debt is absolved.
Can a Durham, Connecticut real estate attorney help?
If you live in Durham, Connecticut and believe that your house is in danger of being foreclosed, you may have more options and protections than you think. You may not know what all of them are, but an accomplished real estate lawyer probably will.