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Foreclosure happens in one of 2 ways, Strict Foreclosure or Foreclosure by Sale.
A Strict Foreclosure
is called by a judge when there is not enough equity between the market value and the debt on the property. A judge will then set a "law day". Until your law day you (or another party) can pay what is owed to bring the mortgage current again, or pay off the whole mortgage by refinancing or selling. If no one pays off the mortgage by the law day, the foreclosing party gets title to the property. You then loose all rights to the property and will be given notice to move out within 30 days after the law day. A Foreclosure by Sale happens when the judge, based on a drive-by appraisal and other debt information, concludes that the property is worth more than is currently owed. Until the "sale day" you (or another paryt) can pay what is owed to bring the mortgage current again, or pay off the whole mortgage by refinancing or selling. If the auction does take place, the property goes to the highest bidder. After the auction, first the costs of holding the auction get paid off, then the lender and any other liens, and if any money is left over, it goes to you.Unless you have a lot of equity in the property, you should NOT seek a Foreclosure by Sale. Generally, if you do not tell the Court which type of foreclosure you would like, the Court will order a Strict Foreclosure. If you want a Foreclosure by Sale, you should file a Motion For Foreclosure for Sale NOW. Defending yourself against foreclosure is complex and can be expensive. You must consider your options carefully, keeping in mind that you may end up responsible for additional legal and appraisal fees. In order to defend yourself in a foreclosure, you will need to pay close attention to court proceedings and deadlines. There are certain terms you need to know and steps you need to take. Hiring a lawyer in this situation might be the best thing to do. Ask upfront what he/she thinks is it going to cost you. CONCLUSION : You should seek Foreclosure by Sale only if you have a lot of equity in the property. Strict Foreclosure is more appropriate if you have little or no equity.Important Information : It is the Law Day or confirmed sale date of the property that ends your rights.A quick list of some of your options at this time: 1. You refinance the property with a new financial institution 2. You sell the mortgaged property to a new owner and pay off the mortgage 3. If you are unemployed, seek financial advice from HUD (1-800-527-0147) 4. If you had a significant loss of income beyond your control, you may be eligible for CHFA assistance (1-860-721-9501) 5. You may be eligible for a $1,000 grant from a Connecticut Foreclosure Intervention Program, if this resolves the problem and you can make payments in the future (1-860-560-588) NOTES : The above no. 3, 4 and 5 only apply to first mortgages. Therefore, if the lender who is foreclosing is not a first mortgagee, the law will not protect you. Also, you have just 25 days from the return date to file an application with the Court, if you feel that you are eligible for protection. Hire a lawyer to help you with this. |