Some states, like Connecticut, offer homeowners who are facing a foreclosure the opportunity to participate in a foreclosure mediation program. In general terms, "mediation" is a form of alternative dispute resolution. Foreclosure mediation, specifically, is a process in which a homeowner, the loan servicer (on the lender's behalf), and a neutral mediator get together to try to work out a loss mitigation option, like a loan modification, and avoid foreclosure. Participating in mediation doesn't guarantee you'll be able to avoid a foreclosure, but you might be able to figure out a way to keep your home or exit the property, like by completing a short sale or deed in lieu of foreclosure, under terms you can live with.
Connecticut established its foreclosure mediation program in 2008 in response to the record number of foreclosures happening in the state. The Connecticut legislature initially intended the mediation program to be a temporary solution to the foreclosure crisis at the time. But the program's end date has been extended several times. The program is now set to expire on June 30, 2029.
In Connecticut's statewide foreclosure mediation program, lenders have to participate in premediation and mediation efforts with homeowners who elect to participate in the process. The homeowner and the servicer work together with a neutral mediator who facilitates the process to resolve the mortgage delinquency.
If you choose to participate in mediation, you'll first go through a "premediation" process in which you'll meet with the mediator, without a lender's representative present, before the mediation occurs. (Later, at the mediation, you, the mediator, and the lender's representative will meet to try to resolve your mortgage delinquency.)
The mediator meets with you to get background information about what caused the mortgage default, your loss mitigation history, and whether you're interested in pursuing a home retention or exit option. During the premediation period, you and the lender exchange information, and the mediator reviews your completed financial forms and supporting documentation, and can also request corrections to the forms or ask for additional documentation. The mediator will discuss possible loss mitigation options that might be available and may refer you to state or local agencies for additional assistance.
At the mediation, the parties discuss the borrower's financial situation and various options to avoid foreclosure, including:
To qualify for foreclosure mediation in Connecticut, the servicer must have already initiated a foreclosure. In addition, you must own the property that's being foreclosed and occupy the home as your primary residence. The property has to be a one-, two-, three-, or four-family family residence located in Connecticut and, in most cases, you must be listed as a borrower on the promissory note secured by the mortgage that's being foreclosed. However, permitted successors in interest may participate in the program if they meet all other eligibility requirements. (A permitted successor-in-interest is either the spouse of a deceased borrower who now holds sole title to the property through an inheritance or survivor rights in the deed; or a spouse of a borrower who became an owner through a divorce judgment or a legal separation.) (Conn Gen. Stat. § 49-31l).
But actions to foreclose a tax lien or condominium lien aren't eligible for Connecticut's foreclosure mediation program.
In Connecticut, foreclosures are judicial (that is, they're either a strict foreclosure or a foreclosure by sale), which means the process goes through state court. The foreclosure starts when the lender's attorney files a complaint in court and then serves a copy of the complaint to the borrowers, along with a summons to appear in court. A notice about the foreclosure mediation program is included with the foreclosure complaint and summons. (Conn Gen. Stat. § 49-31l).
To participate in mediation, you have to file a Foreclosure Mediation Certificate within 15 days after the return date on the summons. (Conn Gen. Stat. § 49-31l). (The "return date" is a date that the court sets to keep track of deadlines for activity in a case. For more information about the return date and other legal terminology, see the State of Connecticut Judicial Branch's Common Legal Words page.)
Because of the limited time frame to opt into the mediation program, it's important to consult with an attorney as soon as you're served with the foreclosure complaint if you have questions about the process or how to opt-in to the program. A lawyer can also make sure you file all required paperwork. If you miss the deadline and don't file the Foreclosure Mediation Certificate on time, you might still be able to participate in mediation, but you'll need to get permission from the court first.
You don't have to participate in mediation, but you can prolong the foreclosure process if you do. The mediation period concludes on the earlier of seven months from the case's return date or three mediation sessions unless extended or shortened by a judge for good cause. (Conn Gen. Stat. § 49-31l).
You don't have to pay a fee to participate in Connecticut's foreclosure mediation program.
Here's who must attend the mediation:
Each mediation session is conducted in person unless the mediator elects to conduct the mediation session on a virtual platform or grants permission to a party, or to the party's lawyer, to appear at the mediation session on a virtual platform that the mediator approves (see below). (Conn Gen. Stat. § 49-31l).
The borrowers generally must bring to the mediation session:
Foreclosure cases in the mediation program are subject to a litigation hold for up to eight months from the case's return date. (Conn Gen. Stat. § 49-31l). During this time, neither the borrower nor the lender may make any motion, request, or demand of the other except those relating to the mediation program—except the borrower is allowed to file an answer, special defenses, and counterclaims. If the borrower files any other motion, request, or demand regarding the lender (other than a motion to dismiss contesting the court's jurisdiction), the eight-month postponement is no longer is in effect.
The court can't enter a judgment against the borrower unless the mediation period expires or ends, and if less than eight months elapse after the return date, it has been 15 days from the termination date, and there isn't a pending motion or request to extend the mediation period. (Conn Gen. Stat. § 49-31l).
A Connecticut law passed in 2021 extended the state's foreclosure mediation program's end date until June 30, 2029. So, the mediation program applies to foreclosure actions that have a return date up to June 30, 2029. (Conn Gen. Stat. § 49-31l).
Previously, the program was scheduled to expire on June 30, 2023.
According to a 2021 report, 26,481 premediation meetings and 67,777 mediation sessions were held in Connecticut from July 1, 2013 to December 31, 2020. (Though, meetings and sessions weren't scheduled or held from March 19, 2020 through the end of the reporting period because of the coronavirus pandemic.)
Homeowners in 14,918 cases completed mediation and, in 74% of those cases, the parties reached agreements resulting in the borrowers keeping their homes. In another 17% of cases, agreements were reached allowing homeowners to leave their homes as the result of a sale, short sale, deed in lieu of foreclosure, or negotiated departure date. So, altogether, the program's settlement rate was 91%. These results mean you've got a decent chance of avoiding foreclosure if you participate in and complete the program.
Even if mediation doesn't help you avoid a foreclosure, it doesn't hurt to participate, and you might be able to buy yourself some extra time to remain in the home without making any payments.
In Connecticut, again, the foreclosure mediation specialists are employees of the state's judicial branch. They're trained in mediation and federal and state foreclosure laws. They also know about different community-based resources and mortgage assistance programs that could be available to help homeowners facing foreclosure. Most of the mediators are lawyers who have years of mediation experience—but they don't represent either party in the process and they can't give legal advice. (Conn Gen. Stat. § 49-31m).
So, while you don't have to hire a lawyer to represent you in your foreclosure mediation, it's often a good idea. A lawyer can give you legal advice specific to your situation and advocate on your behalf, helping you negotiate a way to avoid foreclosure. A lawyer will also ensure that your legal rights are protected in the process. Also, if you're thinking about filing a response to the foreclosure lawsuit, or any other motion with the court, consider talking to an attorney beforehand to discuss the consequences of doing so and your various options.
You might also consider consulting with a HUD-approved housing counselor to learn more about foreclosure avoidance options.
For more information on Connecticut's foreclosure mediation program, go to the State of Connecticut Judicial Branch website.