In Bankruptcy

Below is a success story I would like to share.

Please note that this success story is not common. It is the exceptions, BUT there is a trend in this direction that I hope will continue to grow. What is more common today is the willingness of more and more lenders to work with financially troubled homeowners in an effort to reduce their monthly payments to a level that they can afford and by doing so, keep them in their home and out of foreclosure.

However, in all cases, including these, persistence and patience is required in heavy doses.  It is not as simple as asking the bank to reduce your payments and they reply, “Oh sure, no problem”. In most cases there are endless communications with the lender’s collection and / or loan mitigation departments. There are many disappointing responses, including eventually being served with foreclosure papers.

This is where the State Of Connecticut’s foresight has come to the rescue of so many. Connecticut was swift and first to allow homeowners the opportunity to mediate their loan terms. This is not a guarantee that all will succeed, but more and more are.

Shared Appreciation Loan Modification

A Connecticut couple owed approximately $300,000 and was seriously delinquent on their $2,000 Plus monthly mortgage payment with a large national mortgage company. There were many months of discussions and providing documentation and information, over and over and over again. All apparently in vein as the couple felt hopeless and desperate when a State Marshal left the dreaded Summons and Foreclosure Complaint.

Mr. Homeowner attended a foreclosure intervention clinic that I speak at each month and learned that, although there are no guarantees, there is a process and if managed properly he could buy a lot of time in an effort to explore every possible option to save his home, and if that failed, to leave on his terms and maybe with some money to start new.

I filed an appearance and request for mediation with the court. I did so within the time allowed by law, but not early. Timing is critical. We forwarded the required financials to the lender’s attorney and eventually the couple was offered and accepted a loan modification.


The terms reduced the principal balance on the loan by more than $170,000, reduced the interest rate to almost 2%, thus lowering payments more than $750.

If the property is sold or refinanced, the couple will have to share any appreciation by paying the lender 25% of the appreciation gained from the date of the modification. At no time will the homeowner have to share more than the approximately $170,000 deferred principal. At all times the homeowner gets to keep at least 75% of the appreciation.

If you are in need, or know someone who needs to modify the mortgage, please have them contact us at 203-304-9050 or learn more about how to stop foreclosure.

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