Loss Mit Services

Step A: Missed payments → lender notices and “loss mitigation”

Foreclosure usually isn’t the first move. Most lenders will send notices, attempt contact, and may offer options like repayment plans, forbearance, or modification (collectively called loss mitigation). Starting early improves your leverage.

Step B: The lender files a foreclosure lawsuit (court case)

In CT, foreclosure is typically filed as a lawsuit in Superior Court. You’ll be served with foreclosure papers (Summons and Complaint).

Step C: You may be eligible for Connecticut’s Foreclosure Mediation Program

Connecticut has a Foreclosure Mediation Program for many owner-occupied 1–4 family homes (and certain other situations). It’s designed to help homeowners and lenders negotiate alternatives to foreclosure.

Critical deadline: To request mediation, homeowners generally must file an Appearance and a Foreclosure Mediation Certificate within 15 days of the return date on the summons.

Step D: The case moves through court → judgment enters

If the case isn’t resolved, the court can enter a foreclosure judgment. In Connecticut, that often means strict foreclosure (instead of a typical public auction), although foreclosure by sale is also possible.

Step E: Strict foreclosure and “Law Days” (your last chance to redeem)

With strict foreclosure, the judge sets one or more Law Days—dates tied to the legal right to “redeem” (pay the amount required to stop foreclosure). If you don’t redeem by your Law Day, title can transfer to the lender (or another party in priority order).

Step F: Deficiency judgment risk (sometimes)

If the lender claims the home’s value didn’t cover the debt, they may seek a deficiency judgment (a court judgment for the remaining balance). Connecticut law sets specific timing rules—for example, a motion for deficiency is generally filed within 30 days after the redemption period expires.

Bottom line: CT foreclosures have “points of no return.” The earlier you act—especially once served—the more options you can preserve.

2) Homeowner options to avoid foreclosure (from “keep it” to “exit cleanly”)

If your goal is to KEEP the home

These are typically explored first:

• Loan modification (change rate/term/payment)
• Forbearance (temporary pause or reduction)
• Repayment plan (catch up over time)
• Reinstatement (pay past-due amounts in a lump sum, if available)
• Refinance (harder when behind, but sometimes possible)
• Foreclosure Mediation Program (structured negotiation through CT courts)
• Housing counseling support (HUD-approved counselors can help you prep documents and understand options)

If your goal is to MOVE ON but avoid the worst outcomes

When the payment is no longer sustainable or equity is gone, these “exit” options can be better than a completed foreclosure:

• Traditional sale (if you have equity)
• Short sale (if you owe more than the home can sell for—or don’t have enough to close)
• Deed-in-lieu of foreclosure (you voluntarily transfer title to the lender; lender approval required)
• Bankruptcy (can pause foreclosure via the automatic stay; legal advice is essential)

3) Why short sales deserve a serious look (especially in CT)

A short sale is when you sell the home for less than what you owe, and the lender agrees to accept the sale rather than completing foreclosure.

Why short sales can be a smart “Plan B”

Compared to letting a foreclosure finish, a short sale can:

• Stop the foreclosure from reaching the end stage (if completed in time)
• Let you choose the buyer and often control move-out timing better than a lockout schedule
• Potentially reduce the chance of ongoing collection issues if your approval includes a clear deficiency/waiver arrangement (this is negotiable and depends on the lender and loan type)
• Often feel less disruptive for families than waiting for the court timeline to run out

Connecticut’s strict foreclosure process can move toward Law Days once judgment enters, so having a short sale strategy early—sometimes while simultaneously pursuing mediation or other loss mitigation—can preserve options.

What a short sale typically requires

Most lenders will want to see:

• A signed purchase offer
• Your financial package (income, hardship, expenses, bank statements, etc.)
• A hardship explanation (job loss, medical, divorce, rate reset, etc.)
• An internal value review (BPO/appraisal) and approval process
• Coordination with any second mortgage, HOA, or lienholders

The lender must approve the final numbers and terms; short sales aren’t “automatic,” but they’re common enough that most servicers have established workflows.

Watch-outs (be informed, not scared)

Short sales are powerful—but you should understand:

• Timing risk: If you wait until the case is too far along (especially near/after Law Days), you may run out of runway.
• Credit impact: A short sale can still harm credit, though it often compares favorably to a completed foreclosure (your exact outcome varies).
• Deficiency/collection: Don’t assume the debt is automatically forgiven. The approval letter matters. CT deficiency rules exist, and you should understand exposure.
• Tax/legal consequences: Occasionally there are tax issues or special situations (consult a pro).

4) A “short sale first” action plan (what to do this week)

If foreclosure is on the horizon and a short sale might be the best exit, here’s a practical checklist:

1. Confirm where you are in the court timeline
   Find your return date, filings, and whether judgment is pending/entered.
2. If eligible, request CT Foreclosure Mediation immediately
   Remember the typical 15-day deadline from the return date to file required forms.
3. Contact a professional experienced in short sales, like Loss Mit Services.
   You want someone who knows how to package offers, negotiate liens, and communicate with servicers.

Final thought

Foreclosure in Connecticut isn’t just a financial event—it’s a legal timeline with deadlines. If keeping the home is realistic, push hard on modification/mediation. But if it isn’t, a short sale can be a controlled, often less damaging exit than waiting for the foreclosure to complete—as long as you act early enough to finish the process before the court’s endgame.

Sean Wilder

Loss Mit Services

860-265-3727