What an interesting year 2025 was! I hope you made it through 2025 unscathed and are heading into 2026 strong.
This was quite a transformative year in the world of mortgages and foreclosures. Several trends caused changes in how foreclosures are handled and what I could do for clients.
MORTGAGE INTEREST RATES
With new mortgage interest rates up over 7% for most of the year, but most of my clients coming to me with interest rates below 5%, that meant if a client was behind on their (old) mortgage, and wanted to modify to get back on track, their new rate might be over 7%. That is heartbreaking– the idea of having a low interest rate and then being forced to accept a high rate just to get out of default. It might also make the new monthly payment unaffordable…. So this year I recommended many more homeowners than usual talk to bankruptcy attorneys, or suggested that the homeowners try to find the funds to get caught up on all the missed payments in order to save their current (low) interest rates. This meant I was not helping nearly as many homeowners with mortgage modifications. But that’s OK! Homeowners should choose the best path for themselves when in foreclosure.
— What does this mean for 2026? I am still here ready to talk to anyone behind on their mortgage or in any stage of foreclosure. Contact the office to discuss what my team and I can help you with.
FORECLOSURE AUCTIONS
Real estate values soared during the Covid years and in Connecticut, we are still seeing the benefits in the form of high home values. This means that when a home is in foreclosure, and the loan isn’t modified, paid off or otherwise managed, the courts have been scheduling foreclosure auctions. Having your house sold at foreclosure auction is usually a homeowner’s nightmare. This year I’ve seen the threat of auction motivate homeowners (or the heirs, if the homeowner has passed away) to get the house sold to get as much money out of the property as possible. One thing I spent a lot of time on this year was DELAYING the auction date– last-minute decisions to sell houses meant I was very busy asking the court to give the homeowner more time to get the house sold to private buyers before auctions happened. I was very successful in getting extensions, which meant a lot of money was put into my clients’ hands this year.
— What does this mean for 2026? Your home probably has a lot of equity! Don’t wait to make the tough decision– whether that is to sell, file for bankruptcy or to try to save the house some other way like applying to modify the mortgage. Time is not your friend- the sooner you take action, the more money you save and the more I can do to help.
CREDIT REPORTS AND CREDIT CARDS
I’m sorry to say that this was the year that I had to dial back my consultations when someone had credit card or credit report questions or issues. I have been referring those calls out to other professionals who could give clients more focus than I could. If you have any credit report, credit score or credit card problems, don’t hesitate to call the office and my assistant will refer you on to the appropriate person for help.
FORECLOSURE AUCTIONS, PART II- Surplus funds
When homes do go to foreclosure auction, in many cases there are funds left over that belong to the homeowner (or their heirs). I spent a lot of time this year filing motions to recoup these funds for my clients. If you are considering letting a home go to auction, or if the home has already been auctioned off, do not hesitate to contact me to discuss how much money will be left over to claim. No amount is too small! Let’s talk about it!
I hope 2026 starts off well for you. Call with any questions, watch my YouTube channel, or just send me a quick email to say hello and let me know how you are doing.
