Connecticut Foreclosure Laws
Judicial Foreclosure Available: Yes
Non-Judicial Foreclosure Available: No
Security Instruments: Mortgage
Right of Redemption Period: Court’s Discretion
Deficiency Judgments Allowed: Yes
Time Frame: From 60-150 Days
Public Notice: Complaint
Connecticut is a lien theory state, in which the property acts as security for the loan. However, mortgage documents in the state serve the same legal purpose as a deed in trust in the sense that the creditor has a legal title to the property and the debtor has equitable title, which is also known as equity of redemption. In Connecticut, the document that places a lien on a property is a mortgage.
Foreclosure laws in Connecticut are different than those of other states. The state only allows for judicial foreclosures. The state does not have a specific post sale statutory right of redemption. After the sale of the property, the court will usually provide a short window period for redemption, in which a debtor may reclaim the property after it has been sold by paying the sum of the defaulted loan plus costs.
Deficiency judgments are permitted in Connecticut and may be obtained when the foreclosed property is sold at a public sale for less than the loan amount that the mortgage secures and within thirty (30) days of the end of the redemption period. The borrower will owe the lender the difference between the amount of the original loan and the sum of what the property sold for at auction. All applications for a deficiency judgment require that an appraisal process and hearing be held.
Types of Foreclosures Allowed in Connecticut
In Connecticut, only judicial foreclosures on defaulted property are permitted. This type of foreclosure, also known as foreclosure by judicial sale, involves selling the defaulted property under court supervision. In order for a judicial foreclosure to be possible, no power of sale clause may be present in the loan documents.
The state has two versions of judicial foreclosure. One version is known as strict foreclosure while the other is known as decree of sale. A strict foreclosure is a summary proceeding that typically involves a property with little or no equity. Borrowers are given a specific timeframe to pay the loan in full or redeem at the conclusion upon which the property will be passed to the lender without a sale if the conditions for redemption are not met. It usually takes between 65 to 75 days to carry out a strict foreclosure. However, the process may be delayed if the debtor decides to contest the action, seeks delays and adjournments of hearings, files for a motion for foreclosure by sale or files for bankruptcy. In this type of foreclosure, there is a cutoff period for redemption known as a law day, after which redemption is not allowed.
Decree of sale, also called foreclosure by sale, involves selling the defaulted property as part of a publicly noticed sale. To initiate the process, a complaint is filed in court along with a Lis Pendens, which is a recorded document that provides public notice that the property is being foreclosed upon. Then, a complaint for foreclosure must be issued to the borrower a minimum of twelve (12) days before the complaint can be filed in court. In the event that the borrower cannot be located, the notice may be publicized in a local newspaper where the property is located with the permission of the court.
The court will then determine the time and manner of the sale and will appoint a committee to sell the property. It will also appoint three appraisers to determine the value of the property. With decree of sale foreclosures, the court must issue a final judgment before foreclosure may occur. As with strict foreclosure, the borrower may stop the proceedings before the sale by paying the loan in full plus costs. The time period for redemption with this type of foreclosure varies and is at the sole discretion of the judge.
Hiring a Foreclosure Lawyer
Mortgagors in Connecticut that have defaulted on their loans should hire a top foreclosure lawyer to ensure that they do not lose their home. Foreclosure attorneys make it their mission to work out an agreement with lenders that does not involve repossession. With a skilled foreclosure attorney, you can rest easy knowing that your case will resolve with the best possible outcome.
Regardless of the reason behind the default, the important thing to remember is that there is help for mortgagors in Connecticut. If your property is being foreclosed upon, seek the help of a leading team of foreclosure lawyers right away to ensure that you do not lose your home.