Last Resort Options

1. Foreclosure / Do Nothing – Many homeowners take no steps to stop a foreclosure or sell their property.  This is because either they do not have any desire to do so or they are unaware of their options.  Some homeowners simply do not care about the property or the foreclosure. A study by Freddie Mac in 2005 discovered that over 65% of the homeowners who lost their homes to foreclosure were unaware that they had any options to save or to sell their property. A foreclosure is also devastating to your credit – it will stay on your credit history for seven years and will lower your FICO score approximately 250 points.

2. File Bankruptcy – If you file bankruptcy, the foreclosure is automatically and instantly stopped.  This is called the “automatic stay.”  Depending upon whether you file a Chapter 7 or a Chapter 13, this tactic can be used to give you additional time to close a transaction or even could allow you to retain your home while repaying the amount in default over a period of up to five years. Bankruptcy has the most devastating effect on your credit however, lower your FICO score 300 points or more, stays on your credit for up to 10 years, and you will have difficulty getting any loans during that time and you will pay higher interest rates.  In 2005, Congress substantially amended the Bankruptcy Code to stem abusive bankruptcy filings. This has made it more difficult to file for bankruptcy. Because of this and the resulting severe credit damage, filing a bankruptcy should usually be your last option to stop a foreclosure. 

​3.Government Programs – Please visit the Connecticut Department of Banking website for available programs: www.ct.gov/dcp. 

NMLS No. 847754