The Connecticut Mirror reports that as foreclosure filings in the state rise, prevention programs like BlueHub SUN are stepping in to help alleviate the burden on homeowners.
Trevor Johnie from Waterbury began facing difficulties in paying his mortgage in 2017 after he had to arrange a funeral for his older sister. By the time the pandemic hit, he was still behind on payments and then lost his job as a truck driver. Faced with the possibility of having to give up his home in a short sale, Johnie turned to BlueHub SUN for assistance. The program was able to buy his home and sell it back to him with a new, affordable mortgage, preventing foreclosure.
“I was just praying,” Johnie said. “They [the former mortgage servicer] were sending me letters and giving me days to get out of the house. It was just a godsend.”
Similarly, Donna Denby from Monroe faced financial hardship when the pandemic shut down her antique button business in 2020. As her savings dwindled, she fell behind on her mortgage payments but was shielded by pandemic-era protections. She feared foreclosure once these protections expired but found relief through the MyHomeCT program. Denby received about $50,000, the maximum allowable under the program, to help cover her mortgage debt. Despite initial hurdles and a lengthy process, she was able to keep her home with the support of housing counselors and nonprofit organizations.
Programs like MyHomeCT, funded by $123 million in federal ARPA money, have been crucial in aiding homeowners who faced financial setbacks due to COVID-19. The program, managed by the Connecticut Housing Finance Authority, offers either one-time payments to cover overdue bills or ongoing payments for those unable to meet future obligations. To qualify, applicants must demonstrate a COVID-19-related financial hardship and meet specific income criteria.
The state has seen a marked increase in the efficiency and outreach of these programs in recent months. The Connecticut Housing Finance Authority has quadrupled the number of homeowners assisted and funds disbursed by enhancing outreach and increasing staff. This effort has led to quicker review times and better access to funding during the mandatory mediation portion of Connecticut’s foreclosure process.
While finalized foreclosures are down compared to pre-pandemic levels, foreclosure filings have risen, reflecting a trend that housing experts attribute to homeowners who do not qualify for pandemic aid. This uptick has prompted programs like BlueHub SUN to step in, offering refinancing options to homeowners who can afford to resume payments but have struggled to renegotiate with their mortgage servicers.
Zombie debt, a term for old, forgotten debts that resurface after many years, has also contributed to foreclosure filings. Homeowners who took out second mortgages during the housing market bubble in the mid-2000s and later defaulted are now being pursued by lenders as property values rise. Programs and legal aid organizations are working to help these homeowners, often by getting the debts reduced or discharged.
Connecticut’s MyHomeCT program, although faced with challenges such as funding limits and eligibility criteria, continues to adapt and find ways to assist homeowners. Housing counselors and nonprofits play a vital role in guiding applicants through the process and advocating on their behalf.
These efforts highlight the importance of foreclosure prevention programs in maintaining housing stability for many families. With continued support and adaptation, programs like MyHomeCT and BlueHub SUN can help mitigate the impact of rising foreclosure filings and ensure that more homeowners can stay in their homes.
Trevor Johnie’s story, along with others like Donna Denby's, underscores the critical need for accessible and efficient foreclosure prevention programs to support those facing financial hardships and keep communities intact.