CHAPTER 846*

MORTGAGES

*Cited. 202 C. 566. Cited. 240 C. 35. “Mortgages” cited. Id.

Table of Contents

Sec. 49-1. When foreclosure a bar to further action on debt.

Sec. 49-2. Inclusion of taxes and other items as part of mortgage debt. Open-end mortgage. Reverse annuity mortgage. Negative amortization.

Sec. 49-2a. Interest on funds held in escrow for payment of taxes and insurance.

Sec. 49-2b. (Formerly Sec. 37-10). Interest on escrow accounts; regulations of Banking Commissioner.

Sec. 49-2c. Exceptions.

Sec. 49-3. Mortgage securing future advancements.

Sec. 49-4. Mortgages by U.S. government and certain credit associations and banks to secure future advancements.

Sec. 49-4a. Open-end mortgages, United States or its instrumentalities and certain banks authorized to hold.

Sec. 49-4b. Open-end mortgage as security for guaranty of an open-end loan. Mortgage deed requirements. Description of loan and secondary liability.

Sec. 49-4c. Mortgage as security for obligations under an electricity purchase agreement.

Sec. 49-5. Mortgages on property of public service companies.

Sec. 49-5a. Master mortgage recording.

Sec. 49-5b. Required information in a mortgage contingency clause.

Sec. 49-6. Trust mortgages.

Sec. 49-6a. Definitions. Interim financing policy disclosure required.

Sec. 49-6b. Definitions.

Sec. 49-6c. Notice of late fee required. Exception.

Sec. 49-6d. Legal representation.

Sec. 49-7. Agreements concerning expenses and attorneys’ fees.

Sec. 49-7a. Lenders prohibited from requiring multiple original notes.

Secs. 49-7b to 49-7e. Reserved

Sec. 49-7f. Mortgage brokers and lenders prohibited from referring buyers of real property to a real estate broker, salesperson or attorney for a fee or commission. Suspension or revocation of licenses.

Sec. 49-8. Release of satisfied or partially satisfied mortgage or ineffective attachment, lis pendens or lien. Damages.

Sec. 49-8a. Release of mortgage. Affidavit. Recording of affidavit with town clerk. Penalty for recording false information.

Sec. 49-9. Release of mortgage, mechanic’s lien or power of attorney. Form of instrument. Index. Operation of executed release.

Sec. 49-9a. Validation of release of mortgage. Affidavit.

Sec. 49-10. Assignment of mortgage debt. Form of instrument. Requirements. Sufficient notice of assignment. Operation of executed assignment.

Sec. 49-10a. Request for payoff statement or reinstatement payment statement.

Sec. 49-10b. Residential real estate transaction involving payoff of mortgage loan. Disclosure statement prepared and sent to mortgage holder by notification agent. Form.

Sec. 49-11. Release of mortgage by executor, administrator, spouse, next of kin, guardian, conservator or other suitable person.

Sec. 49-12. Release of mortgage by foreign executor, administrator, trustee, conservator or guardian.

Sec. 49-13. Petition for discharge of mortgage or ineffective attachment, lis pendens or lien.

Sec. 49-13a. Undischarged mortgage invalid as further lien. Time periods. Tolling of time period by recording notice.

Sec. 49-14. Deficiency judgment.

Sec. 49-15. Opening of judgments of strict foreclosure.

Sec. 49-16. Foreclosure certificate. Penalty.

Sec. 49-17. Foreclosure by owner of debt without legal title.

Sec. 49-18. Foreclosure by executor, administrator or trustee.

Sec. 49-19. Title to vest in encumbrancer paying debt and costs.

Sec. 49-20. Redemption by holder of encumbrance on part of property foreclosed.

Sec. 49-21. Defendant to receive and file certificate of satisfaction or certificates of judgment of strict foreclosure or foreclosure by sale.

Sec. 49-22. Execution of ejectment on foreclosure judgment. Disposition of property.

Sec. 49-22a. Execution of ejectment on foreclosure judgment on mortgage guaranteed by Administrator of Veterans’ Affairs.

Sec. 49-23. Ejectment by mortgagee barred by tender of debt and costs.

Sec. 49-24. Court may foreclose lien or mortgage on land by sale.

Sec. 49-25. Appraisal of property.

Sec. 49-26. Conveyance; title of purchaser.

Sec. 49-27. Disposal of proceeds of sale.

Sec. 49-28. When proceeds of sale will not pay in full.

Sec. 49-29. Expenses of sale and costs.

Sec. 49-30. Omission of parties in foreclosure actions.

Sec. 49-31. Actions against the state.

Sec. 49-31a. Subordination clauses.

Sec. 49-31b. Information in deed sufficient notice as to nature and amount of obligation. Deed for variable rate mortgage loan.

Sec. 49-31c. When subordination not subject to statute of frauds and automatically effective.

Sec. 49-31d. Definitions.

Sec. 49-31e. Notice to homeowner of protections from foreclosure.

Sec. 49-31f. Application for protection from foreclosure action. Qualifications. Court determination of eligibility. Stay of foreclosure action.

Sec. 49-31g. Restructuring of mortgage debt by court.

Sec. 49-31h. Partial payment by homeowner mandated by court as condition for granting of restructuring order.

Sec. 49-31i. Determination of restructured mortgage debt. Limitations on amount of mortgage debt following restructuring. Computation of new mortgage debt.

Sec. 49-31j. Regulations.

Sec. 49-31k. Definitions.

Sec. 49-31l. Foreclosure mediation: Notice of foreclosure mediation program. Forms. Procedure. Stay of litigation.

Sec. 49-31m. Foreclosure mediation program.

Sec. 49-31n. Mediation period. Information required. Termination of program.

Sec. 49-31o. Consent of mortgagee required for changes. Disclosure of information submitted to mediator.

Sec. 49-31p. Successor in interest in foreclosed property secured by federally-related mortgage loan. Assumption of interest limited. Definitions.

Sec. 49-31q. Successor in interest in foreclosed property. Termination of tenant lease and assumption of interest subject to tenant lease.

Sec. 49-31r. Foreclosure mediation: Notice of community-based resources.


Sec. 49-1. When foreclosure a bar to further action on debt. The foreclosure of a mortgage is a bar to any further action upon the mortgage debt, note or obligation against the person or persons who are liable for the payment thereof who are made parties to the foreclosure and also against any person or persons upon whom service of process to constitute an action in personam could have been made within this state at the commencement of the foreclosure; but the foreclosure is not a bar to any further action upon the mortgage debt, note or obligation as to any person liable for the payment thereof upon whom service of process to constitute an action in personam could not have been made within this state at the commencement of the foreclosure. The judgment in each such case shall state the names of all persons upon whom service of process has been made as herein provided.

(1949 Rev., S. 7191; 1957, P.A. 443; P.A. 79-602, S. 74.)

History: P.A. 79-602 made minor changes in wording, substituting “the” for “such”, etc., but made no substantive changes.

See Sec. 49-14 re deficiency judgments.

Before the statute, foreclosure was a bar to further action on the mortgage debt. 1 R. 203; 3 C. 63; 5 C. 535; 18 C. 136; 91 C. 586. The provisions of section requiring persons liable for the mortgage debt to be made parties to the foreclosure applies only to foreclosure proceedings begun after the section was enacted. 56 C. 146. Section applies to mortgages of personalty. 58 C. 257. Consideration of separate action against endorser after foreclosure and deficiency judgment against maker only. 100 C. 710; 102 C. 648. Parties liable in separate action even though deficiency not claimed in foreclosure suit. 109 C. 333. Cited. 112 C. 611. Guarantors named in foreclosure allowed same credit as mortgagor. 113 C. 246. Cited. 116 C. 332. Failure to name one a party defendant merely bars the remedy. 119 C. 586. Cited. 120 C. 671. Effect of failing to name parties in foreclosure of prior mortgages 122 C. 314. Cited. 141 C. 179. Does not change requirements of Sec. 49-14. 154 C. 216. Cited. 185 C. 579; 199 C. 368; 216 C. 443; 220 C. 152; Id., 643; 228 C. 929. Section prohibits a personal remedy against mortgagor but does not eliminate the underlying mortgage debt and does not supersede bank’s continuing access to equitable foreclosure proceedings; judgment reversed. 244 C. 251. Statute did not apply because original common charges debt was not extinguished by foreclosure action based on a statutorily created lien. 247 C. 575.

Cited. 25 CA 159; 28 CA 809; 31 CA 80; Id., 476; 32 CA 309; 33 CA 388; 35 CA 81; 38 CA 198; 40 CA 434; 44 CA 588. Trustee’s sale of property in another state does not bar action here since defendant not a person on whom service of process in Connecticut could have been made at commencement of trustee’s sale in the other state. 48 CA 531. A foreclosure plaintiff who fails to file a timely motion for a deficiency judgment under Sec. 49-14 cannot recover additional damages from a guarantor based on the terms of a guaranty, the purpose of which was to secure the debt owed under the mortgage note. 137 CA 680.

Cited. 2 CS 98. When a mortgagee takes property on foreclosure, the taking of the property satisfies the debt only pro tanto to value of property on date it is appropriated. 3 CS 261. Distinction between this section and Sec. 49-14 discussed. 6 CS 123. Cited. Id., 300.

Sec. 49-2. Inclusion of taxes and other items as part of mortgage debt. Open-end mortgage. Reverse annuity mortgage. Negative amortization. (a) Premiums of insurance, taxes and assessments paid by the mortgagee and payments of interest or installments of principal due on any prior mortgage or lien by any subsequent mortgagee or lienor of any property to protect his interest therein, are a part of the debt due the mortgagee or lienor.

(b) Advancements may be made by a mortgagee for repairs, alterations or improvements and are a part of the debt due the mortgagee, provided (1) advancements for such repairs, alterations or improvements shall not be made if the indebtedness at the time of the advancement exceeds the amount of the original mortgage debt; (2) the advancements shall not exceed the difference between the indebtedness at the time of the advancement and the original mortgage debt, if the original mortgage debt is greater than the then indebtedness; (3) the total amount of all of the advancements for repairs, alterations and improvements outstanding at any time shall not exceed (A) one thousand dollars as to mortgages executed and recorded after October 1, 1947, but before October 1, 2004, or (B) five thousand dollars as to mortgages executed and recorded on or after October 1, 2004; and (4) the terms of repayment of the advancements shall not increase the time of repayment of the original mortgage debt.

(c) Advancements may also be made by a mortgagee, or the assignee of any mortgagee, under an open-end mortgage to the original mortgagor, or to the assign or assigns of the original mortgagor who assume the existing mortgage, or any of them, and any such mortgage debt and future advances shall, from the time such mortgage deed is recorded, without regard to whether the terms and conditions upon which such advances will be made are contained in the mortgage deed and, in the case of an open-end mortgage securing a commercial future advance loan, a consumer revolving loan or a letter of credit, without regard to whether the authorized amount of indebtedness shall at that time or any time have been fully advanced, be a part of the debt due such mortgagee and be secured by such mortgage equally with the debts and obligations secured thereby at the time of recording the mortgage deed and have the same priority over the rights of others who may acquire any rights in, or liens upon, the mortgaged real estate subsequent to the recording of such mortgage deed, provided: (1) The heading of any such mortgage deed shall be clearly entitled “Open-End Mortgage”; (2) the mortgage deed shall contain specific provisions permitting such advancements and, if applicable, shall specify that such advancements are made pursuant to a commercial future advance loan agreement, a consumer revolving loan agreement or a letter of credit; (3) the mortgage deed shall state the full amount of the loan therein authorized; (4) the terms of repayment of such advancements shall not extend the time of repayment beyond the maturity of the original mortgage debt, provided this subdivision shall not be applicable where such advancements are made or would be made pursuant to a commercial future advance loan agreement, a consumer revolving loan agreement or a letter of credit, and the mortgage deed specifies that such advancements are repayable upon demand or by a date which shall not be later than thirty years from the date of the mortgage; (5) such advancements shall be secured or evidenced by a note or notes signed by the original mortgagor or mortgagors or any assign or assigns of the original mortgagor or mortgagors who assume the existing mortgage, or any of them, but no note shall be required with respect to any advancements made pursuant to a commercial future advance loan agreement, a consumer revolving loan agreement or a letter of credit as long as such advancements are recorded in the books and records of the original mortgagee or its assignee; (6) the original mortgage shall be executed and recorded after October 1, 1955; (7) the original mortgagor or mortgagors, or any assign or assigns of the original mortgagor or mortgagors who assume the existing mortgage, or any of them, are hereby authorized to record a written notice terminating the right to make such optional future advances secured by such mortgage or limiting such advances to not more than the amount actually advanced at the time of the recording of such notice, provided a copy of such written notice shall also be sent by registered or certified mail, postage prepaid and return receipt requested, to the mortgagee, or a copy of such written notice shall be delivered to the mortgagee by a proper officer or an indifferent person and a receipt for the same received from the mortgagee, and such notice, unless a later date is recorded or specified in the notice, shall be effective from the time it is received by the mortgagee; (8) except that if any such optional future advance or advances are made by the mortgagee, or the assignee of any mortgagee, to the original mortgagor or mortgagors, or any assign or assigns who assume the existing mortgage, or any of them, after receipt of written notice of any subsequent mortgage, lien, attachment, lis pendens, legal proceeding or adjudication against such real property, then the amount of any such advance, other than an advance made pursuant to a commercial future advance loan agreement or a letter of credit, shall not be a priority as against any such mortgage, lien, attachment, lis pendens or adjudication of which such written notice was given; (9) any notice given to the mortgagee under the terms of subdivision (8) of this subsection shall be deemed valid and binding upon the original mortgagee or any assignee of the original mortgagee, in the case of a mortgagee other than a banking institution, on the next business day following receipt by such mortgagee of such notice sent by registered or certified mail, postage prepaid and return receipt requested, or by hand delivery with a signed receipt, and in the case of a mortgagee which is a banking institution, on the next business day following receipt at the main office of such banking institution of such notice sent by registered or certified mail, postage prepaid and return receipt requested, or by hand delivery with a signed receipt. For the purposes of this subsection: (A) “Banking institution” means a bank and trust company, a national banking association having its main office in this state, a savings bank, a federal savings bank having its main office in this state, a savings and loan association, a federal savings and loan association having its main office in this state, a credit union having assets of two million dollars or more, or a federal credit union having its main office in this state and having assets of two million dollars or more; (B) “commercial future advance loan” means a loan to a foreign or domestic corporation, partnership, limited liability company, sole proprietorship, association or entity, or any combination thereof, the proceeds of which are not intended primarily for personal, family or household purposes, which loan entails advances of all or part of the loan proceeds and repayments of all or part of the outstanding balance of the loan from time to time, and includes (i) a commercial revolving loan wherein all or part of the loan proceeds that have been repaid may be readvanced, and (ii) a commercial nonrevolving loan wherein previously advanced loan proceeds, once repaid, cannot be readvanced; and (C) “consumer revolving loan” means a loan to one or more individuals, the proceeds of which are intended primarily for personal, family or household purposes, which is secured by a mortgage on residential real property, and is made pursuant to an agreement between the mortgagor and mortgagee which (i) provides for advancements of all or part of the loan proceeds during a period of time which shall not exceed ten years from the date of such agreement and for repayments of the loan from time to time, (ii) provides for payments to be applied at least in part to the unpaid principal balance not later than ten years from the date of the loan, (iii) does not authorize access to the loan proceeds by a credit card or any similar instrument or device, whether known as a credit card, credit plate, or by any other name, issued with or without a fee by an issuer for the use of the cardholder in obtaining money, goods, services, or anything else of value on credit, and (iv) does not provide that such a revolving loan to more than one mortgagor will be immediately due and payable upon the death of fewer than all the mortgagors who signed the revolving loan agreement. Nothing in this subsection shall affect the validity or enforceability of any loan agreement which provides for future advancements by a lender to a borrower as between such parties or their heirs, successors or assigns, or shall affect the validity or enforceability of any mortgage securing any such loan that would be valid and enforceable without the provisions of this subsection.

(d) (1) Any mortgage to secure advancements made by a mortgagee or its assignee to a mortgagor pursuant to the terms of a mortgage securing a reverse annuity mortgage loan, as defined in subdivision (4) of subsection (a) of section 36a-265, shall be sufficiently definite and certain and valid to secure all money actually advanced pursuant to and in accordance with its terms, whether at or subsequent to closing of the loan, up to but not exceeding the full amount of the loan therein authorized with the same priority as if all such money had been advanced at the time such mortgage was delivered if such mortgage sets forth: (A) That it is a “reverse annuity mortgage loan” and contains a reference to subdivision (4) of subsection (a) of section 36a-265; (B) the full amount of the loan authorized; (C) a statement of the dates on which such advancements are to be made and the amounts of such advancements; and (D) the events which will give rise to the maturity of the loan.

(2) The mortgagee or its assignee and the mortgagor may subsequently modify the dates set forth in the mortgage for advancements by a writing setting forth such modification signed by the mortgagee or its assignee and the mortgagor and recorded upon the proper land records. Such modification shall in no way limit or otherwise affect the priority of such mortgage.

(e) Any mortgagee of real property located in this state may contract with the mortgagor in connection with the mortgage loan for interest to be paid currently or to accrue, and, if such interest is to accrue, for such accrued interest to be added to the principal mortgage debt on which interest may be charged and collected. Such accrued interest which is added to the principal mortgage debt shall be secured by the mortgage to the same extent as the original principal of such mortgage debt.

(1949 Rev., S. 7192; 1955, S. 2969d; P.A. 73-587; P.A. 79-158, S. 2; 79-359, S. 1; 79-602, S. 61; P.A. 80-423, S. 1, 3; 80-483, S. 130, 186; P.A. 81-251; P.A. 82-243, S. 1, 3; P.A. 88-271, S. 1; P.A. 89-84; P.A. 96-180, S. 160, 166; P.A. 99-36, S. 33; P.A. 04-132, S. 5; P.A. 06-156, S. 1; P.A. 09-161, S. 1.)

History: P.A. 73-587 replaced Subsec. (c)(3) which had stated that advancements “shall not exceed the difference between the indebtedness at the time of such advancement and the original mortgage debt” with provision prohibiting indebtedness from exceeding the stated amount of the mortgage; P.A. 79-158 added Subsec. (d); P.A. 79-359 amended Subsec. (c) to specify that mortgage debt and future advances are part of debt due “without regard to whether the terms ... upon which such advances will be made are contained in the mortgage deed, and, in the case of an open-end mortgage securing a commercial revolving loan, without regard to whether the stated amount of indebtedness shall ... have been fully advanced”, to add provision re advancements made pursuant to commercial revolving loan agreement in Subdivs. (2), (5) and (8) to rephrase Subdiv. (3) and to define “commercial revolving loan” for purposes of the Subsec.; P.A. 79-602 made minor changes in wording of Subsecs. (a) and (b); P.A. 80-423 added references to letters of credit in Subsec. (c) and made minor changes in wording; P.A. 80-483 made technical grammatical changes in Subsec. (a) and replaced numeric Subdiv. indicators with alphabetic indicators in Subsec. (d)(1); P.A. 81-251 amended Subsec. (c) by adding the words “partnership, association or entity, or any combination thereof” in the definition of a commercial revolving loan; P.A. 82-243 amended Subsec. (c) by providing that Subdiv. (4) is not applicable to certain advancements which are repayable upon demand, and by including a loan to a “sole proprietorship” in the definition of a commercial revolving loan and added Subsec. (e) authorizing a mortgagee to contract with the mortgagor for the accrual of interest and the addition of that accrued interest to the principal mortgage debt; P.A. 88-271 amended Subsec. (c) by extending the application of the section to consumer revolving loans; P.A. 89-84 amended Subsec. (c)(9) by adding Subpara. designations and adding Subpara. (B) re notice to a mortgagee which is a banking institution and made technical changes; P.A. 96-180 changed the first reference in Subsec. (d)(1) from “subdivision (5) of subsection (a) of section 36a-265” to “subdivision (4) of subsection (a) of section 36a-265”, effective June 3, 1996 (Revisor’s note: A second reference to Sec. 36a-265 (a)(5) was changed editorially by the Revisors for consistency); P.A. 99-36 made technical changes in Subsec. (c); P.A. 04-132 amended Subsec. (b) by increasing maximum amount of advancements for repairs, alterations and improvements from $1,000 to $5,000 as to mortgages executed and recorded on or after October 1, 2004, and by making technical and conforming changes; P.A. 06-156 amended Subsec. (c)(9) by making technical changes and redefining “commercial revolving loan” in Subpara. (B); P.A. 09-161 amended Subsec. (c) by changing “commercial revolving loan” to “commercial future advance loan” and redefining same.

See Sec. 49-4b re open-end mortgage as security for guarantor.

These payments give no right to foreclosure apart from debt. 75 C. 375; 124 C. 337. Provisions not exclusive; payments made by second mortgagee on principal of first mortgage and for appraisal after fire may be added to debt secured by second mortgage. 105 C. 176. Recovery for payments on prior mortgage by mortgagor from his grantee. 112 C. 611. Cited. 115 C. 655. Cited. 116 C. 334. Cited. 120 C. 671. Cited. 139 C. 373. Cited. 146 C. 523. Cited. 185 C. 463. Cited. 219 C. 772.

Cited. 2 CS 142. Cited. 3 CS 105. Inclusion of taxes and assessments in the mortgage debt allowed only if paid by mortgagee. 11 CS 454.

Subsec. (c):

Cited. 202 C. 566.

Sec. 49-2a. Interest on funds held in escrow for payment of taxes and insurance. (a) On and after July 1, 1993, each state bank and trust company, national banking association, state or federally chartered savings and loan association, savings bank, insurance company and other mortgagee or mortgage servicing company holding funds of a mortgagor in escrow for the payment of taxes and insurance premiums with respect to mortgaged property located in this state shall pay interest on such funds, except as provided in section 49-2c, at a rate of not less than the average rate paid, as of December 30, 1992, on savings deposits by insured commercial banks as published in the Federal Reserve Board Bulletin and rounded to the nearest one-tenth of one percentage point, except in no event shall the rate be less than one and one-half per cent. On and after January 1, 1994, until September 30, 2012, the rate for each calendar year shall be not less than the deposit index as defined in subsection (c) of this section for that year and rounded to the nearest one-tenth of one percentage point, except in no event shall the rate be less than one and one-half per cent. On and after October 1, 2012, the rate for each calendar year shall be not less than the deposit index as defined in subsection (c) of this section for that year and rounded to the nearest one-tenth of one percentage point. Interest payments shall be credited on the thirty-first day of December annually toward the payment of taxes or insurance premiums as the case may be, on such mortgaged property in the ensuing year. If the mortgage debt is paid prior to December thirty-first in any year, the interest to the date of payment shall be paid to the mortgagor. The provisions of this section shall apply only with respect to mortgages on owner-occupied residential property consisting of not more than four living units and housing cooperatives occupied solely by the shareholders thereof. Any mortgagee or mortgage servicing company violating the provisions of this section shall be fined not more than one hundred dollars for each offense.

(b) Each mortgagee or mortgage servicing company subject to the provisions of this section may contact the Department of Banking to ascertain the published deposit index to determine the minimum rate paid on funds of a mortgagor held in escrow for the payment of taxes and insurance premiums.

(c) The deposit index for each calendar year shall be equal to the average rate paid on savings deposits by insured commercial banks as last published in the Federal Reserve Board Bulletin in November of the prior year. The commissioner shall determine the deposit index for each calendar year and publish such deposit index in the Department of Banking news bulletin no later than December fifteenth of the prior year. For purposes of this section, “Federal Reserve Board Bulletin” means the monthly survey of selected deposits published as a special supplement to the Federal Reserve Statistical Release Publication H.6 published by the Board of Governors of the Federal Reserve System or, if such bulletin is superseded or becomes unavailable, a substantially similar index or publication.

(P.A. 73-607, S. 1; P.A. 75-385, S. 1; P.A. 77-355, S. 1; P.A. 85-368, S. 4; P.A. 92-4, S. 2; P.A. 93-198, S. 1, 2; P.A. 12-106, S. 1.)

History: P.A. 75-385 applied provisions to mortgage serving companies, changed date for initial credit of interest payment from September 30, 1974, to December 31, 1975, and correspondingly changed following date reference; P.A. 77-355 increased interest rate to 4% on and after January 1, 1978, and rephrased provisions to delete obsolete reference to December 31, 1975, and to specify applicability of provisions to housing cooperatives occupied solely by their shareholders; P.A. 85-368 increased the rate of interest paid on funds held in escrow from 4% to 5.25% as of October 1, 1985; P.A. 92-4 required interest paid on funds held in escrow at the rate of 4% on and after October 1, 1992, and at the rate of 5.25% on and after October 1, 1994; P.A. 93-198 required that the interest rate paid on funds held in escrow be based on the rate paid on savings deposits by insured commercial banks as published in the Federal Reserve Board Bulletin and rounded to the nearest 0.1%, added Subsec. (b) re mortgagee or mortgage servicing companies’ contacting the department of banking to ascertain the published deposit index to determine the minimum rate paid on funds of a mortgagor held in escrow for the payment of taxes and insurance premiums and added Subsec. (c) re calculation and application of the deposit index, effective July 1, 1993; P.A. 12-106 amended Subsec. (a) by adding “until September 30, 2012” re rate requirement applicable on and after January 1, 1994, and adding provision re rate not to be less than deposit index, rounded to nearest one-tenth of 1 percentage point, on and after October 1, 2012.

Sec. 49-2b. (Formerly Sec. 37-10). Interest on escrow accounts; regulations of Banking Commissioner. The Banking Commissioner shall adopt such regulations, in accordance with chapter 54, as are necessary to carry out the provisions of section 49-2a and shall specify the form mortgagees may use to report to mortgagors the interest due under the provisions of section 49-2a.

(P.A. 73-607, S. 4; P.A. 77-604, S. 30, 84; 77-614, S. 161, 610; P.A. 80-482, S. 337, 348; P.A. 86-403, S. 82, 132; P.A. 87-9, S. 2, 3; P.A. 03-84, S. 37; P.A. 05-46, S. 17.)

History: Sec. 37-10 transferred to Sec. 49-2b in 1977 and reference to Sec. 47-23a revised to reflect its transfer; P.A. 77-604 reiterated substitution of Sec. 47a-22 for Sec. 47-23a; P.A. 77-614 replaced bank commissioner with banking commissioner within the department of business regulation and made banking department a division within that department, effective January 1, 1979; P.A. 80-482 restored banking commissioner and division to prior independent status and abolished the department of business regulation; P.A. 86-403 deleted reference to regulations necessary to carry out provisions of Sec. 47a-22(a); (Revisor’s note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 03-84 changed “Commissioner of Banking” to “Banking Commissioner”, effective June 3, 2003; P.A. 05-46 specified that regulations be adopted in accordance with chapter 54 and required that regulations specify the form mortgagees may use to report interest due under Sec. 49-2a in lieu of requirement that commissioner furnish forms to mortgagees for the purpose of reporting interest due.

Sec. 49-2c. Exceptions. (a) In no event shall interest be required to be paid on escrow accounts where (1) there is a contract between the mortgagor and the mortgagee, entered into before October 1, 1975, which contains an express disclaimer of an obligation on the part of the mortgagee to pay interest on the accounts, (2) the payment of such interest would violate any federal law or regulation, (3) the accounts are maintained with a mortgage servicing company, neither affiliated with nor owned in whole or in part by the mortgagee, under a written contract or any mortgage agreements underlying the contracts, entered into before October 1, 1975, which contract does not permit the mortgage servicing company to earn or receive a return from the investment of the accounts or (4) the accounts are maintained in connection with mortgage loans entered into (A) on and after October 1, 1977, and before January 1, 1989, and which are serviced and held for sale for not more than one year by a mortgage servicing company, neither affiliated with nor owned in whole or in part by the purchaser of the mortgage loan, and (B) on and after January 1, 1989, and which are serviced and held for sale for not more than six months by any such mortgage servicing company, provided such mortgage servicing company shall pay interest on an escrow account maintained in connection with such mortgage loan if the loan is sold within such specified periods and the mortgage servicing company continues to service the loan.

(b) In no event shall interest be required to be paid at a rate in excess of two per cent per annum where (1) there is a contract between the mortgagor and the mortgagee entered into before October 1, 1977, which contains an express agreement to pay interest at the rate of two per cent per annum, or (2) such accounts are maintained in connection with mortgage loans entered into prior to October 1, 1977, and which are serviced and held for sale for not more than one year by a mortgage servicing company, neither affiliated with nor owned in whole or in part by the purchaser of the mortgage loan.

(P.A. 75-385, S. 2; P.A. 77-355, S. 2; P.A. 78-23; P.A. 79-602, S. 85; P.A. 88-271, S. 2, 3.)

History: P.A. 77-355 added Subdiv. (4) re accounts maintained in connection with mortgage loans entered into on and after October 1, 1977, and added Subsec. (b) re exceptions to 2% interest rate; P.A. 78-23 referred to accounts serviced “and” held for sale rather than accounts serviced “or” held for sale in Subsecs. (a)(4) and (b)(2); P.A. 79-602 substituted “the” for “such” throughout section; P.A. 88-271 amended Subdiv. (4) by adding the words “and before January 1, 1989” in Subpara. (A) and adding a new Subpara. (B) re payment of interest on escrow accounts by mortgage servicing company when the loan is sold within certain specified periods and the company continues to service the loan.

Sec. 49-3. Mortgage securing future advancements. (a) Any mortgage to secure future advancements of money for construction or repair of buildings or improvements on land in this state, including site improvements of every kind with or without the construction or repair of any buildings, is sufficiently definite and certain and valid to secure all money actually advanced under and in accordance with its provisions, up to but not exceeding the amount of the full loan therein authorized, with the same priority as if it had been advanced at the time the mortgage was delivered, (1) if the mortgage contains a description of the loan in substantially the following form: “Whereas buildings or improvements on said premises are in process of construction or repair, or to be erected or repaired; and whereas the said grantee has agreed to make the loan herein described to be paid over to said grantor in installments as the work progresses, the time and amount of each advancement to be at the sole discretion and upon the estimate of said grantee, so that when all of the work on said premises shall have been completed to the satisfaction of said grantee, said grantee shall then pay over to said grantor any balance necessary to complete the full loan of $....; and whereas the grantor agrees to complete the erection or repair of said buildings to the satisfaction of said grantee within a reasonable time from the date hereof or at the latest on or before .... months from this date”, or (2) whenever one or more advances are to be made when a certain event or condition occurs, if the mortgage contains the pertinent portions of the above clause, and such additional clauses as shall set forth with reasonable certainty and accuracy the particular sums which are to be advanced and the event or condition which determines when such sums are to be advanced to the grantor. A mortgage that otherwise complies with subdivision (1) of this subsection shall be valid notwithstanding any provision in any other agreement between the mortgagee and mortgagor that sets forth either particular sums which are to be advanced or the event or condition which determines when such sums are to be advanced, or both, whether or not such other agreement is recorded on the land records. Nothing herein invalidates any mortgage which would be valid without this subsection.

(b) The parties may subsequently modify the time set forth in the mortgage for the grantor to complete the erection or repair of said buildings or improvements as well as the payment dates for interest and principal necessitated by the change in the completion date by a writing to that effect, signed by the parties and recorded upon the proper land records. The modification shall in no way affect or limit the priority of the mortgage.

(c) If the mortgagor under a mortgage to secure future advances containing a description of the loan as specified in subsection (a) hereof is in default under the mortgage or note, the mortgagee may complete the erection or repair and the cost thereof shall be a part of the debt due the mortgagee and secured by the mortgage, provided in no such case may the total debt due exceed the face amount of the note.

(1949 Rev., S. 7194; 1949, S. 2970d; 1971, P.A. 809; P.A. 73-545; P.A. 79-178; 79-602, S. 62.)

History: 1971 act specifically included site improvements in previous provisions and added Subsecs. (b) to (d); P.A. 73-545 incorporated former Subsec. (b) in Subsec. (a) as Subdiv. (2), relettering as necessary; P.A. 79-178 added provision in Subsec. (a) validating mortgages which comply with Subdiv. (1) notwithstanding other agreements re particular sums to be advanced or conditions determining advances, etc.; P.A. 79-602 made minor changes in wording but made no substantive changes.

Statute does not annul Matz v. Arick, which still provides the test for future advances not framed in the form suggested by the statute. 143 C. 582. Cited. 146 C. 523. Cited. 185 C. 463. Cited. 202 C. 566. Cited. 219 C. 772. Cited. 232 C. 294.

Cited. 10 CA 251.

Cited. 17 CS 52.

Subsec. (a):

Cited. 33 CA 563.

Sec. 49-4. Mortgages by U.S. government and certain credit associations and banks to secure future advancements. Any mortgage upon real property to secure future advancements of money to the mortgagor to be made within one year of the date of the mortgage by the United States or any department, agency or instrumentality thereof, a production credit association, a bank for cooperatives organized under the Farm Credit Act of 1933, a federal intermediate credit bank or a federal land bank is sufficiently definite and certain and valid to secure all money actually advanced under and in accordance with its provisions up to but not exceeding the amount of the full loan therein stated with the same priority as if it had been advanced at the time the mortgage was delivered, if the mortgage contains a description of the loan in substantially the following form:

“Whereas a loan to the mortgagor has been authorized by the mortgagee in the amount of $.... to be paid over to the mortgagor in installments from time to time at the discretion of the mortgagee, and whereas, the mortgagee herein agrees to complete disbursement of the proceeds of this loan on or before ...., or on said date to apply any balance of said loan not then disbursed to the principal of said loan in inverse order of maturity.”

(November, 1955, S. N221; 1959, P.A. 553; P.A. 79-602, S. 63.)

History: 1959 act applied provisions of section to mortgages by product credit associations, banks for cooperatives, federal intermediate credit banks and federal land banks; P.A. 79-602 substituted “is” for “shall be” and “the” for “such” where appearing.

Sec. 49-4a. Open-end mortgages, United States or its instrumentalities and certain banks authorized to hold. (a) As used in this section, the term “mortgagee”, means the United States or any department, agency or instrumentality thereof, a production credit association, a bank for cooperatives organized under the Farm Credit Act of 1933, a federal intermediate credit bank or a federal land bank.

(b) Advancements may be made by a mortgagee, or the assignee of any mortgagee under an open-end mortgage to the original mortgagor, or to the assign or assigns of the original mortgagor who assumes the existing mortgage, or any of them, and the mortgage debt and future advances shall, from the time the mortgage deed is recorded, be a part of the debt due the mortgagee, and be secured by the mortgage equally with the debts and obligations secured thereby at the time of recording the mortgage deed for record and have the same priority over the rights of others who may acquire any rights in, or liens upon, the mortgaged real estate subsequent to the recording of the mortgage deed, provided: (1) The heading of the mortgage deed shall be clearly entitled “Open-End Mortgage”; (2) the mortgage deed shall state the full amount of the loan therein authorized; (3) the mortgage deed shall contain specific provisions permitting the advancements; (4) the advancements shall not exceed the difference between the indebtedness at the time of the advancement and the full amount of the loan authorized in the mortgage deed; (5) the advancements shall be secured or evidenced by the original note or notes signed by the original mortgagor, or original mortgagors, or any assign or assigns of the original mortgagor who assume the existing mortgage, or any of them; (6) the mortgage shall not secure any advances made after twenty years from the date of the original mortgage; (7) the original mortgagor or original mortgagors or any assign or assigns of the original mortgagor who assume the existing mortgage, or any of them, are hereby authorized to record a written notice terminating such optional future advances secured by the mortgage, or limiting the advances to not more than the amount actually advanced at the time of the recording of the notice, provided a copy of the written notice shall also be sent by registered or certified mail, postage prepaid and return receipt requested, to the mortgagee or a copy of the written notice shall be delivered to the mortgagee by a proper officer or an indifferent person and a receipt for the same received from the mortgagee, and the notice, unless otherwise specified in the notice, shall be effective from the time it is received by the mortgagee; (8) except that, if the optional future advance or advances are made by the mortgagee or the assignee of any mortgagee, to the original mortgagor, original mortgagors or any assign or assigns who assume the existing mortgage or any of them, after receipt of written notice of any subsequent mortgage, lien, attachment, lis pendens, legal proceeding or adjudication against the real property, then the amount of the advance shall not be a priority as against the mortgage, lien, attachment, lis pendens or adjudication of which the written notice was given; (9) any notice given to the mortgagee under the terms of this subsection shall be deemed valid and binding upon the original mortgagee or any assignee of the original mortgagee from the time of the receipt of the notice by the mortgagee or assignee.

(P.A. 74-320, S. 1, 2; P.A. 77-265; P.A. 79-602, S. 64.)

History: P.A. 77-265 specified in Subsec. (b)(5) that advancements to be secured by “the original” note or notes; P.A. 79-602 changed wording slightly but made no substantive changes.

Subsec. (b):

Cited. 202 C. 566.

Sec. 49-4b. Open-end mortgage as security for guaranty of an open-end loan. Mortgage deed requirements. Description of loan and secondary liability. (a) If an open-end mortgage meets the requirements of this section, such mortgage shall be deemed to give sufficient notice of the nature of the obligation to secure the obligation of any person who is secondarily liable for an open-end loan, including (1) a commercial future advance loan, as defined in subsection (c) of section 49-2, without regard to whether the authorized amount of indebtedness of such loan constituting the underlying obligation shall at that time or at any time have been fully advanced, (2) future advances under such open-end loan, to the extent that such mortgagor is secondarily liable for such future advances, and (3) a letter of credit. Such mortgagor’s secondary liability for such future advances shall be secured by such open-end mortgage equally with the obligation secured by such mortgage at the time of recording such mortgage deed and shall have the same priority over the rights of others who may acquire any rights in, or liens upon, the mortgaged real estate subsequent to the recording of such mortgage deed.

(b) The heading of such mortgage deed shall be clearly entitled “Open-End Mortgage”.

(c) The loan constituting the underlying obligation for which the mortgagor is secondarily liable, which secondary liability is secured by such open-end mortgage, shall be described in such open-end mortgage deed. A description of such loan meets the requirements of this subsection if such open-end mortgage deed states: (1) The name and address of the person who is primarily liable for such loan; (2) that such underlying obligation specifically permits such advancements and, if applicable, that such advancements are made pursuant to a revolving loan agreement; (3) the full amount of the loan authorized; and (4) the maximum term of the loan.

(d) The secondary liability of the mortgagor shall be described in such open-end mortgage deed. A description of such secondary liability meets the requirements of this subsection if such open-end mortgage deed states: (1) The full amount of the obligation of the mortgagor if such amount is different from the full amount of the loan authorized for the underlying obligation; and (2) the date, if any, on which the secondary liability of the mortgagor will terminate.

(e) As used in this section, “mortgagee” includes any assignee of the mortgagee, and “mortgagor” includes any assignee of the mortgagor, and “any person who is secondarily liable” includes any person who has guaranteed or endorsed an open-end loan.

(f) Nothing in this section, as in effect both before and after July 10, 1997, invalidates any mortgage that would be valid without this section.

(P.A. 79-359, S. 2; P.A. 80-423, S. 2, 3; P.A. 82-243, S. 2; P.A. 97-320, S. 2, 11; P.A. 09-161, S. 2.)

History: P.A. 80-423 included letters of credit in Subsec. (a) and made minor changes in wording; P.A. 82-243 amended Subsec. (e) by adding a definition of “any person who is secondarily liable”; P.A. 97-320 amended Subsec. (a) by adding “be deemed to give sufficient notice of the nature of the obligation”, deleted Subsec. (d)(3) and (4) and added Subsec. (f) providing nothing in effect before and after July 10, 1995, invalidates any mortgage, effective July 10, 1997; P.A. 09-161 amended Subsec. (a)(1) by changing “commercial revolving loan” to “commercial future advance loan”.

Cited. 202 C. 566. Legislature authorized a type of secured guaranty not enforced under common law of state; mortgage subject to this section enforceable only if deed satisfies the section’s requirements. 232 C. 294.

Sec. 49-4c. Mortgage as security for obligations under an electricity purchase agreement. Any mortgage entered into subsequent to July 1, 1986, between a private power producer, as defined in section 16-243b, or the owner or operator of a qualifying facility, as defined in Part 292 of Title 18 of the Code of Federal Regulations, or a guarantor of any of their respective obligations, as mortgagor, and an electric company, as defined in section 16-1, as mortgagee, shall be valid to secure all obligations then existing or thereafter arising of the mortgagor to the mortgagee under an electricity purchase agreement, including, without limitation, recovery of amounts paid to the private power producer or the owner or operator of a qualifying facility by the mortgagee in excess of the mortgagee’s avoided costs as defined in section 16-243a and all other damages for failure to deliver electric energy or capacity or other breach of an electricity purchase agreement, including, without limitation, the net replacement cost of the capacity being secured by such mortgage, together with accrued interest, if any, as computed in accordance with the terms of the electricity purchase agreement or the mortgage, and under a guarantee of such obligations or obligations created by the mortgage, and shall have priority over the rights of others who shall acquire any rights in the property covered by such mortgage subsequent to the recording of the mortgage in the land records of the town in which the mortgaged property is situated provided: (1) The electricity purchase agreement is substantially in the form approved by the Public Utilities Regulatory Authority pursuant to section 16-243a and shall have been entered into by the mortgagor and mortgagee prior to or simultaneously with or subsequent to the execution and delivery of the mortgage, (2) the caption to the mortgage shall contain the words “Open-End Mortgage” and “Electricity Purchase Agreement”, (3) the mortgage shall state that it is entered into to secure the mortgagor’s obligations to the mortgagee under an electricity purchase agreement or under a guarantee of any electricity purchase agreement obligations and shall recite either the address of an office of the mortgagee or its assignee in the state at which a copy of the electricity purchase agreement is on file and may be inspected by the public during normal business hours or that the electricity purchase agreement has been recorded, as an exhibit to the mortgage or otherwise, on or before the date the mortgage is recorded, in the land records of the town in which the mortgaged property is situated, provided the electricity purchase agreement shall be so recorded, (4) the amount of the obligation from time to time secured by the mortgage may be determined or reasonably approximated on the basis of records maintained by the mortgagee or its assignee in the state, which records and an estimate of the amount claimed by the mortgagee to be secured are made available to the public with reasonable promptness upon written request, and (5) the mortgage states the maximum amount which it shall secure. Nothing in this section shall invalidate any mortgage which would be valid without this section. For purposes of this section, “electricity purchase agreement” means a contract or agreement to purchase and sell electric energy or capacity by and between a private power producer, as defined in section 16-243b, or the owner or operator of a qualifying facility, as defined in Part 292 of Title 18 of the Code of Federal Regulations, and an electric company, as defined in section 16-1.

(P.A. 88-235; P.A. 11-80, S. 1.)

History: Pursuant to P.A. 11-80, “Department of Public Utility Control” was changed editorially by the Revisors to “Public Utilities Regulatory Authority” in Subdiv. (1), effective July 1, 2011.

Sec. 49-5. Mortgages on property of public service companies. (a) Any corporation doing a light, heat, gas, power, water, telephone or natural gas transmission business in, or owning property in, more than one town may secure its issue of bonds or other evidences of indebtedness by mortgage or deed of trust of all or any part of its plant and property, real, personal or mixed, wherever the same is situated, including, without limitation, its goods, documents, instruments, general intangibles, chattel paper, accounts, contract rights and franchises, whether owned by it at the time of the mortgage or deed of trust or thereafter to be acquired by it, or both, and the mortgage or deed of trust shall secure equally all such bonds as may be issued from time to time, under and in pursuance of the terms and provisions specified in the mortgage or deed of trust. In the mortgage or deed of trust it is sufficient to describe the plant, equipment, apparatus, transmission or pipe lines, distribution systems and the personal property of such company by general terms.

(b) The mortgage or deed of trust or, if the mortgage or deed of trust has been previously recorded, whether within or without this state, a copy of the record of the mortgage or deed of trust certified by the recording authority, may be recorded in the office of the Secretary of the State and when so recorded need not be recorded or filed in the records of the towns within which the property, plant or transmission or pipe lines or distribution systems included in the mortgage or deed of trust are situated, and shall be valid and effectual as respects all property therein included as aforesaid, provided a certificate shall be recorded in the office of the town clerk of each of such towns setting forth the names of the mortgagor and the mortgagee, the date of the mortgage or deed of trust and the fact that the mortgage or deed of trust is recorded in the office of the Secretary of the State.

(c) The provisions of sections 16-218 to 16-227, inclusive, concerning the foreclosure of mortgages of railroad companies, apply to all mortgages or bonds issued by companies doing a light, heat, gas, power, water, telephone or natural gas transmission business.

(1949 Rev., S. 7097; 1951, 1953, S. 2952d; 1963, P.A. 446; P.A. 73-367; P.A. 79-602, S. 65.)

History: 1963 act specified that corporation’s goods, documents, instruments, general intangibles, chattel paper, accounts and contract rights may be mortgaged as security for bonds or other indebtedness; P.A. 73-367 specified that copy of record of previously recorded mortgage or deed of trust may be recorded in office of secretary of the state; P.A. 79-602 divided section into Subsecs. and made minor changes in wording, substituting “the” for “such”, etc.

Sec. 49-5a. Master mortgage recording. (a) Any instrument containing a form or forms of covenants, conditions, obligations, powers and other clauses of a mortgage may be recorded in the land records of any town. The town clerk shall index such instrument under the name of the person, lending institution or corporation causing it to be recorded. Every such instrument shall be entitled on its face “Master form recorded by (name of person or lending institution in whose name the instrument is to be recorded).”

(b) After the recordation any of the provisions of such master form instrument may be incorporated by reference in any mortgage of real estate situated within such town, if such reference in the mortgage refers to the master form instrument and states the date when and the volume and page where such master form instrument was recorded. The recording of any mortgage which has so incorporated by reference in it any or all of the provisions of a master form instrument recorded as provided in this section shall have like effect as if such provisions of the master form had been set forth fully in the mortgage.

(c) Whenever a mortgage is presented for recording on which is set forth matter purporting to be a copy or reproduction of a master form instrument or part of it, identified by its title and recording information as provided in subsection (a) hereof, preceded by the words “do not record” or “not to be recorded” or words of similar import and plainly separated from the matter to be recorded as a part of the mortgage in such manner that it will not appear on a photographic or other reproduction of any page containing any part of the mortgage, such matter shall not be recorded by the town clerk to whom the instrument is presented for recording. The clerk shall record only the mortgage apart from that matter and shall not be liable for so doing, any other provisions of law to the contrary notwithstanding.

(d) The fee for recording any mortgage which has incorporated by reference any of the provisions of a master form instrument recorded as provided by this section shall be as provided in section 7-34a but not less than ten dollars.

(1971, P.A. 578, S. 1–4; P.A. 79-602, S. 36.)

History: P.A. 79-602 made minor changes in wording but did not make substantive changes.

Sec. 49-5b. Required information in a mortgage contingency clause. Any mortgage contingency clause included in a bond for deed or a written agreement for sale of real estate which conditions the purchaser’s performance on his obtaining a mortgage from a third party shall satisfy the provisions of section 52-550 if such mortgage contingency clause contains at least the following: (1) The principal amount in dollars of the loan the purchaser must obtain to fulfill such contingency; (2) the limit of the time period within which a commitment for such loan must be obtained, and (3) the term of the mortgage expressed in years.

(P.A. 76-69, S. 1, 2.)

Cited. 177 C. 569. Cited. 202 C. 566. Cited. 220 C. 553. Cited. 232 C. 294.

Cited. 23 CA 579.

Sec. 49-6. Trust mortgages. Section 49-6 is repealed.

(1949 Rev., S. 7104; P.A. 77-614, S. 161, 610; P.A. 79-602, S. 132.)

Sec. 49-6a. Definitions. Interim financing policy disclosure required. (a) For the purposes of this section:

(1) “Creditor” means any state bank and trust company or national banking association, state or federal savings bank, state or federal savings and loan association, state or federal credit union, licensed mortgage lender, mortgage correspondent lender or other financial institution.

(2) “Mortgage loan” means a loan which is secured by a first mortgage on one to four family residential real property located in this state;

(3) “Applicant” means any person who applies for a mortgage loan; and

(4) “Interim financing” means a short term loan, the proceeds of which are to be used by an applicant to purchase one to four family residential real property, which is due and payable upon the sale of the applicant’s current residence.

(b) Each creditor who has a policy of not offering interim financing shall disclose such policy to the applicant in writing in plain language at the time the mortgage loan application is filed. The applicant shall sign the disclosure statement to acknowledge its receipt.

(P.A. 86-160; P.A. 08-176, S. 76.)

History: P.A. 08-176 redefined “creditor” in Subdiv. (1) to include “mortgage correspondent lender” and make a conforming change, effective July 1, 2008.

Sec. 49-6b. Definitions. For the purposes of this section and sections 49-6c and 49-6d:

(1) “Person” includes individuals, partnerships, associations, limited liability companies and corporations;

(2) “Creditor” means any person or the assignee of any person who in the ordinary course of business extends credit to a consumer debtor residing in this state;

(3) “Consumer debtor” means any natural person to whom credit for personal, family or household purposes has been extended;

(4) The adjective “consumer” characterizes the transaction as one in which the party to whom credit is offered or extended is a natural person, and the money, property or services which are the subject of the transaction are primarily for personal, family, or household use.

(P.A. 86-268, S. 4; P.A. 95-79, S. 172, 189.)

History: P.A. 95-79 redefined “person” to include limited liability companies, effective May 31, 1995.

Sec. 49-6c. Notice of late fee required. Exception. A creditor shall mail to a consumer debtor a written notice of the imposition of any delinquency charge, late fee or similar assessment as a result of a late payment on a note, mortgage or installment sales contract unless the creditor issues a periodic statement which may include any delinquency charge, late fee, or similar assessment. Such notice shall be mailed within sixty days of the imposition of such charge.

(P.A. 86-268, S. 5.)

Sec. 49-6d. Legal representation. (a) Each creditor shall notify a consumer debtor in writing when a mortgage loan application is filed that such debtor:

(1) May have legal interests that differ from the creditor’s;

(2) May not be required by the creditor to be represented by the creditor’s attorney;

(3) May waive the right to be represented by an attorney;

(4) May direct any complaints concerning violations of this section to the Department of Banking.

(b) The notice shall be written in plain language and shall be signed by the consumer debtor to acknowledge its receipt.

(P.A. 86-268, S. 6; P.A. 87-9, S. 2, 3.)

History: (Revisor’s note: Pursuant to P.A. 87-9 “banking department” was changed editorially by the Revisors to “department of banking”).

Sec. 49-7. Agreements concerning expenses and attorneys’ fees. Any agreement contained in a bill, note, trade acceptance or other evidence of indebtedness, whether negotiable or not, or in any mortgage, to pay costs, expenses or attorneys’ fees, or any of them, incurred by the holder of that evidence of indebtedness or mortgage, in any proceeding for collection of the debt, or in any foreclosure of the mortgage, or in protecting or sustaining the lien of the mortgage, is valid, but shall be construed as an agreement for fair compensation rather than as a penalty, and the court may determine the amounts to be allowed for those expenses and attorneys’ fees, even though the agreement may specify a larger sum.

(1949 Rev., S. 7193; P.A. 79-602, S. 67.)

History: P.A. 79-602 substituted “is” for “shall be” and “those”, “that” or “the” for “such” where appearing.

Cited. 120 C. 671. Imposition of attorneys fee does not render note usurious as such fee is not interest within meaning of section 37-4. 141 C. 301. Attorneys’ fees properly awarded for defense of antitrust suit and in bankruptcy proceedings as well as for the foreclosure proceedings. 178 C. 640.

Cited. 1 CA 30.

Sec. 49-7a. Lenders prohibited from requiring multiple original notes. No lender shall require a borrower, as a condition of obtaining a loan, to sign multiple original notes to evidence such loan.

(P.A. 95-200.)

Secs. 49-7b to 49-7e. Reserved for future use.

Sec. 49-7f. Mortgage brokers and lenders prohibited from referring buyers of real property to a real estate broker, salesperson or attorney for a fee or commission. Suspension or revocation of licenses. (a) No mortgage broker or lender, as defined in subdivision (5) of section 49-31d, or any person affiliated with such mortgage broker or lender shall receive a fee, commission or other form of referral fee for the referral of any person to (1) a real estate broker, real estate salesperson, as defined in section 20-311, or any person affiliated with such broker or salesperson or any person engaged in the real estate business, as defined in said section 20-311, or (2) an attorney-at-law admitted to practice within this state or any person affiliated with such attorney.

(b) Any person who violates the provisions of subsection (a) of this section shall upon a verified complaint in writing of any person, provided such complaint, or such complaint together with evidence, documentary or otherwise, presented in connection therewith, shall make out a prima facie case, to the Banking Commissioner, who shall investigate the actions of any mortgage broker or lender, or any person who assumes to act in any of such capacities within this state. The Banking Commissioner shall have the power temporarily to suspend or permanently to revoke any license issued under the provisions of subpart (A) of part I of chapter 668 and, in addition to or in lieu of such suspension or revocation, may, in the commissioner’s discretion, impose a fine of not more than one thousand dollars for each offense for any violation of the provisions of subsection (a) of this section.

(P.A. 94-240, S. 13; P.A. 96-200, S. 26; P.A. 03-84, S. 38.)

History: P.A. 96-200 amended Subsec. (a) to substitute “salesperson” for “salesman”; (Revisor’s note: In 1997 a reference in Subsec. (b) to “chapter 660a” was changed editorially by the Revisors to “subdivision (A) of part I of chapter 668”. In 2003 the reference to “subdivision (A)” was changed editorially by the Revisors to “subpart (A)” for clarity of reference); P.A. 03-84 changed “Commissioner of Banking” to “Banking Commissioner” and made a technical change in Subsec. (b), effective June 3, 2003.

Sec. 49-8. Release of satisfied or partially satisfied mortgage or ineffective attachment, lis pendens or lien. Damages. (a) The mortgagee or a person authorized by law to release the mortgage shall execute and deliver a release to the extent of the satisfaction tendered before or against receipt of the release: (1) Upon the satisfaction of the mortgage; (2) upon a bona fide offer to satisfy the mortgage in accordance with the terms of the mortgage deed upon the execution of a release; (3) when the parties in interest have agreed in writing to a partial release of the mortgage where that part of the property securing the partially satisfied mortgage is sufficiently definite and certain; or (4) when the mortgagor has made a bona fide offer in accordance with the terms of the mortgage deed for such partial satisfaction on the execution of such partial release.

(b) The plaintiff or the plaintiff’s attorney shall execute and deliver a release when an attachment has become of no effect pursuant to section 52-322 or section 52-324 or when a lis pendens or other lien has become of no effect pursuant to section 52-326.

(c) The mortgagee or plaintiff or the plaintiff’s attorney, as the case may be, shall execute and deliver a release within sixty days from the date a written request for a release of such encumbrance (1) was sent to such mortgagee, plaintiff or plaintiff’s attorney at the person’s last-known address by registered or certified mail, postage prepaid, return receipt requested, or (2) was received by such mortgagee, plaintiff or plaintiff’s attorney from a private messenger or courier service or through any means of communication, including electronic communication, reasonably calculated to give the person the written request or a copy of it. The mortgagee or plaintiff shall be liable for damages to any person aggrieved at the rate of two hundred dollars for each week after the expiration of such sixty days up to a maximum of five thousand dollars or in an amount equal to the loss sustained by such aggrieved person as a result of the failure of the mortgagee or plaintiff or the plaintiff’s attorney to execute and deliver a release, whichever is greater, plus costs and reasonable attorney’s fees.

(1949 Rev., S. 7112; 1963, P.A. 590, S. 1; 1969, P.A. 595, S. 1; P.A. 79-10; 79-602, S. 68; P.A. 89-347, S. 18; P.A. 93-147; P.A. 95-102, S. 1; P.A. 03-19, S. 111.)

History: 1963 act applied provisions with respect to bona fide offers to satisfy mortgage wholly or partially upon execution of release or partial release and with respect to agreements for partial release; 1969 act applied provisions when an attachment has become of no effect pursuant to Sec. 52-322 or 52-324 and when lis pendens or other lien has become of no effect, required that request be sent to last-known address by registered or certified mail, postage prepaid and return receipt requested, and raised fine from $5 to $50 per week, imposing ceiling of $1,000; P.A. 79-10 raised fine to $100 per week, raised dollar amount of ceiling to $5,000 and provided for maximum payment of amount equal to loss sustained because of failure to execute and deliver release, if that amount is greater; P.A. 79-602 divided section into Subsecs. and restated provisions but made no substantive changes; P.A. 89-347 amended Subsec. (c) by increasing liability from $100 to $200 per week for failure to provide a release and removed the $5,000 ceiling; P.A. 93-147 amended Subsec. (c) to allow written request for release to be conveyed, carried or delivered by a private messenger or courier; P.A. 95-102 revised wording of Subsec. (c), changed time for release from 30 to 60 days and imposed maximum fine of $5,000 plus costs and reasonable attorney’s fees; P.A. 03-19 made technical changes in Subsecs. (a) and (c), effective May 12, 2003.

Tender of expense held excused. 76 C. 705. No tender or offer of release need be made until debt is paid. 93 C. 495. When mortgagor pays he is entitled to a release but not to an assignment. 95 C. 586. Cited. 122 C. 27. Cited. 162 C. 31. Section provided new, affirmative remedy and contains no express or implied intention to abrogate or supersede common-law remedy. Section provides additional, but not exclusive, remedy. 172 C. 152. Cited. 196 C. 172. Cited. 223 C. 419. A breach of section’s provisions is tortious in nature and not contractual and therefore the three-year statute of limitations set forth in Sec. 52-577 is applicable. 284 C. 193.

Cited. 18 CA 313. Action founded on section sounds in tort. 94 CA 593.

This section must be construed as expressly limiting the mortgagor to total damages of one thousand dollars in suit for damages for refusal to give a partial release of mortgage. 33 CS 41. Cited. 41 CS 130.

Subsec. (c):

Damages provision set forth in Subsec. is not akin to a liquidated damages clause but instead more analogous to a penalty provision. 284 C. 193.

Maximum amount under statute cannot be multiplied where more than one aggrieved party. 49 CS 43.

Sec. 49-8a. Release of mortgage. Affidavit. Recording of affidavit with town clerk. Penalty for recording false information. (a) For the purposes of this section and section 49-10a:

(1) “Mortgage loan” means a loan secured by a mortgage on one, two, three or four family residential real property located in this state, including, but not limited to, a residential unit in any common interest community, as defined in section 47-202.

(2) “Person” means an individual, corporation, limited liability company, business trust, estate, trust, partnership, association, joint venture, government, governmental subdivision or agency, or other legal or commercial entity.

(3) “Mortgagor” means the grantor of a mortgage.

(4) “Mortgagee” means the grantee of a mortgage; provided, if the mortgage has been assigned of record, “mortgagee” means the last person to whom the mortgage has been assigned of record; and provided further, if the mortgage has been serviced by a mortgage servicer, “mortgagee” means the mortgage servicer.

(5) “Mortgage servicer” means the last person to whom the mortgagor has been instructed by the mortgagee to send payments of the mortgage loan. The person who has transmitted a payoff statement shall be deemed to be the mortgage servicer with respect to the mortgage loan described in that payoff statement.

(6) “Attorney-at-law” means any person admitted to practice law in this state and in good standing.

(7) “Title insurance company” means any corporation or other business entity authorized and licensed to transact the business of insuring titles to interests in real property in this state.

(8) “Institutional payor” means any bank or lending institution that, as part of making a new mortgage loan, pays off the previous mortgage loan.

(9) “Payoff statement” means a statement of the amount of the unpaid balance on a mortgage loan, including principal, interest and other charges properly assessed pursuant to the loan documentation of such mortgage and a statement of the interest on a per diem basis with respect to the unpaid principal balance of the mortgage loan.

(b) If a mortgagee fails to execute and deliver a release of mortgage to the mortgagor or to the mortgagor’s designated agent within sixty days from receipt by the mortgagee of payment of the mortgage loan (1) in accordance with the payoff statement furnished by the mortgagee, or (2) if no payoff statement was provided pursuant to a request made under section 49-10a, in accordance with a good faith estimate by the mortgagor of the amount of the unpaid balance on the mortgage loan using (A) a statement from the mortgagee indicating the outstanding balance due as of a date certain, and (B) a reasonable estimate of the per diem interest and other charges due, any attorney-at-law or duly authorized officer of either a title insurance company or an institutional payor may, on behalf of the mortgagor or any successor in interest to the mortgagor who has acquired title to the premises described in the mortgage or any portion thereof, execute and cause to be recorded in the land records of each town where the mortgage was recorded, an affidavit which complies with the requirements of this section.

(c) An affidavit pursuant to this section shall state that:

(1) The affiant is an attorney-at-law or the authorized officer of a title insurance company, and that the affidavit is made on behalf of and at the request of the mortgagor or the current owner of the interest encumbered by the mortgage;

(2) The mortgagee has provided a payoff statement with respect to the mortgage loan or the mortgagee has failed to provide a payoff statement requested pursuant to section 49-10a;

(3) The affiant has ascertained that the mortgagee has received payment of the mortgage loan (A) in accordance with the payoff statement, or (B) in the absence of a payoff statement requested pursuant to section 49-10a, in accordance with a good faith estimate by the mortgagor of the amount of the unpaid balance on the mortgage loan calculated in accordance with subdivision (2) of subsection (b) of this section, as evidenced by a bank check, certified check, attorney’s clients’ funds account check or title insurance company check, which has been negotiated by the mortgagee or by other documentary evidence of such receipt of payment by the mortgagee, including a confirmation of a wire transfer;

(4) More than sixty days have elapsed since payment was received by the mortgagee; and

(5) At least fifteen days prior to the date of the affidavit, the affiant has given the mortgagee written notice by registered or certified mail, postage prepaid, return receipt requested, of intention to execute and cause to be recorded an affidavit in accordance with this section, with a copy of the proposed affidavit attached to such written notice; and that the mortgagee has not responded in writing to such notification, or that any request for additional payment made by the mortgagee has been complied with at least fifteen days prior to the date of the affidavit.

(d) Such affidavit shall state the names of the mortgagor and the mortgagee, the date of the mortgage, and the volume and page of the land records where the mortgage is recorded. The affidavit shall provide similar information with respect to every recorded assignment of the mortgage.

(e) The affiant shall attach to the affidavit (1) photostatic copies of the documentary evidence that payment has been received by the mortgagee, including the mortgagee’s endorsement of any bank check, certified check, attorney’s clients’ funds account check, title insurance company check, or confirmation of a wire transfer, and (2) (A) a photostatic copy of the payoff statement, or (B) in the absence of a payoff statement requested pursuant to section 49-10a, a copy of a statement from the mortgagee that is in the possession of the mortgagor indicating the outstanding balance due on the mortgage loan as of a date certain and a statement setting out the mortgagor’s basis for the estimate of the amount due, and shall certify on each that it is a true copy of the original document.

(f) Such affidavit, when recorded, shall constitute a release of the lien of such mortgage or the property described therein.

(g) The town clerk shall index the affidavit in the name of the original mortgagee and the last assignee of the mortgage appearing of record as the grantors, and in the name of the mortgagors and the current record owner of the property as grantees.

(h) Any person who causes an affidavit to be recorded in the land records of any town in accordance with this section having actual knowledge that the information and statements therein contained are false shall be fined not more than five thousand dollars or imprisoned not less than one year or more than five years, or both fined and imprisoned.

(P.A. 86-341, S. 1; P.A. 95-79, S. 173, 189; 95-102, S. 2; P.A. 03-19, S. 112; 03-196, S. 21; P.A. 10-32, S. 144.)

History: P.A. 95-79 amended Subsec. (a) to redefine “person” to include a limited liability company, effective May 31, 1995; P.A. 95-102 amended Subsec. (a) to replace definition of “mortgage” with “mortgage loan”, amended Subsec. (b) by changing time for release from 30 to 60 days and adding Subdiv. (2) re remedy if no payoff statement was provided pursuant to request made under Sec. 49-10a, amended Subsec. (c) to include current owner of interest encumbered by mortgage as person who may request affidavit, to include provision re failure to provide payoff statement requested pursuant to Sec. 49-10a, to change time for release from 30 to 60 days and require that written notice by affiant be sent to mortgagee by registered or certified mail, postage prepaid, return receipt requested, amended Subsec. (e) re requirements re affidavit and amended Subsec. (h) changing “knowing” to “having actual knowledge that” and increasing penalty for false statements from $500 to $5,000 or imprisonment of not less than one nor more than five years or both fine and imprisonment; P.A. 03-19 made technical changes in Subsecs. (a), (b), (c), (e) and (h), effective May 12, 2003; P.A. 03-196 amended Subsec. (a) by defining “institutional payor” in new Subdiv. (8) and redesignating existing Subdiv. (8) as Subdiv. (9), and amended Subsec. (b) by adding provisions re institutional payors and making technical changes, effective July 1, 2003; P.A. 10-32 made a technical change in Subsec. (c)(1), effective May 10, 2010.

Sec. 49-9. Release of mortgage, mechanic’s lien or power of attorney. Form of instrument. Index. Operation of executed release. (a) A mortgage of real or personal property, a mechanic’s lien or a power of attorney for the conveyance of land may be released by an instrument in writing executed, attested and acknowledged in the same manner as deeds of land, setting forth that the mortgage, mechanic’s lien or power of attorney for the conveyance of land is discharged or that the indebtedness or other obligation secured thereby has been satisfied. That instrument vests in the person or persons entitled thereto such legal title as is held by virtue of the mortgage, or mechanic’s lien. An instrument in substantially the form following is sufficient for the release:

Know all Men by these Presents, That .... of .... in the county of .... and state of .... do hereby release and discharge a certain (mortgage, mechanic’s lien or power of attorney for the conveyance of land) from .... to .... dated .... and recorded in the records of the town of .... in the county of .... and state of Connecticut, in book .... at page ....

In Witness Whereof .... have hereunto set .... hand and seal, this .... day of ...., A.D. ....

Signed, sealed and delivered

in the presence of

(Seal)

(Acknowledgment)

(b) In the case of partial releases of mortgages as provided for in section 49-8, the instrument shall state the extent to which the mortgage is partially released and a sufficiently definite and certain description of that part of the property securing the mortgage which is being released therefrom.

(c) Town clerks shall note the discharge or partial release as by law provided and shall index the record of each such instrument under the name of the releasor and of the mortgagor.

(d) A release of mortgage executed in accordance with this section shall operate to release the interest of the releasor in the mortgage which is the subject of the release, even if such interest is, in fact, acquired by the releasor after executing such release or does not appear of record until after the execution of such release. Nothing in this subsection shall be construed to limit the effect of any release of mortgage recorded before, on or after October 1, 2006.

(1949 Rev., S. 7113; 1963, P.A. 590, S. 2; 1967, P.A. 120, S. 1; P.A. 79-602, S. 69; P.A. 06-156, S. 2.)

History: 1963 act applied provisions to power of attorney for the conveyance of land, designated previous provisions as Subsecs. (a) and (c) and inserted new Subsec. (b) re partial release of mortgages; 1967 act removed judgment liens from purview of section; P.A. 79-602 made minor changes in wording; P.A. 06-156 added Subsec. (d) re operation of release executed in accordance with section.

See Sec. 7-34a re town clerks’ fees.

See Sec. 52-380d re release of judgment lien on real or personal property.

Sec. 49-9a. Validation of release of mortgage. Affidavit. (a) Notwithstanding the provisions of this chapter, a release of mortgage executed by any person other than an individual that is invalid because it is not issued or executed by, or fails to appear in the name of the record holder of the mortgage on one, two, three or four-family residential real property located in this state, including, but not limited to, a residential unit in any common interest community, as defined in section 47-202, shall be as valid as if it had been issued or executed by, or appeared in the name of, the record holder of the mortgage unless an action challenging the validity of the release is commenced and a notice of lis pendens is recorded in the land records of the town where the release is recorded within five years after the release is recorded, provided an affidavit is recorded in the land records of the town where the mortgage was recorded which states the following:

(1) The affiant has been the record owner of the real property described in the mortgage for at least two years prior to the date of the affidavit;

(2) The recording information for the mortgage, any assignment of the mortgage and the release;

(3) Since the date of the recording of the release, the affiant has received no demand for payment of all or any portion of the debt secured by the mortgage and has received no notice or communication that would indicate that all or any portion of the mortgage debt remains due and owing; and

(4) To the best of the affiant’s knowledge and belief, the mortgage debt has been paid in full.

(b) The provisions of subsection (a) of this section shall not apply to any release obtained by forgery or fraud.

(P.A. 04-67, S. 1; P.A. 10-36, S. 7.)

History: P.A. 04-67 effective July 1, 2004; P.A. 10-36 made technical changes, effective July 1, 2010.

Sec. 49-10. Assignment of mortgage debt. Form of instrument. Requirements. Sufficient notice of assignment. Operation of executed assignment. (a) As used in this section, “mortgage debt” means a debt or other obligation secured by mortgage, assignment of rent or assignment of interest in a lease.

(b) Whenever any mortgage debt is assigned by an instrument in writing containing a sufficient description to identify the mortgage, assignment of rent or assignment of interest in a lease, given as security for the mortgage debt, and that assignment has been executed, attested and acknowledged in the manner prescribed by law for the execution, attestation and acknowledgment of deeds of land, the title held by virtue of the mortgage, assignment of rent or assignment of interest in a lease, shall vest in the assignee. An instrument substantially in the following form is sufficient for such assignment:

Know all Men by these Presents, That .... of .... in the county of .... and state of .... does hereby grant, bargain, sell, assign, transfer and set over a certain (mortgage, assignment of rent or assignment of interest in a lease) from .... to .... dated .... and recorded in the records of the town of .... county of .... and state of Connecticut, in book .... at page ....

In Witness Whereof .... have hereunto set .... hand and seal, this .... day of .... A.D. ....

Signed, sealed and delivered

in the presence of

(SEAL)

(Acknowledged)

(c) In addition to the requirements of subsection (b) of this section, whenever an assignment of any residential mortgage loan (1) made by a lending institution organized under the laws of or having its principal office in any other state, and (2) secured by mortgage on residential real estate located in this state is made in writing, the instrument shall contain the name and business or mailing address of all parties to such assignment.

(d) If a mortgage debt is assigned, a party obliged to pay such mortgage debt may discharge it, to the extent of the payment, by paying the assignor until the party obliged to pay receives sufficient notice in accordance with subsection (f) of this section that the mortgage debt has been assigned and that payment is to be made to the assignee. In addition to such notice, if requested by the party obliged to pay, the assignee shall furnish reasonable proof that the assignment has been made, and until the assignee does so, the party obliged to pay may pay the assignor. For purposes of this subsection, “reasonable proof” means (1) written notice of assignment signed by both the assignor and the assignee, (2) a copy of the assignment instrument, or (3) other proof of the assignment as agreed to by the party obliged to pay such mortgage debt.

(e) If a mortgage debt is assigned, a party obliged to pay such mortgage debt who, in good faith and without sufficient notice of the assignment in accordance with subsection (f) of this section, executes with the assignor a modification or extension of the mortgage, assignment of rent or assignment of interest in a lease, shall have the benefit of such modification or extension, provided, the assignee shall acquire corresponding rights under the modified or extended mortgage, assignment of rent or assignment of interest in a lease. The assignment may provide that modification or extension of the mortgage, assignment of rent or assignment of interest in a lease, signed by the assignor after execution of the assignment, is a breach by the assignor of the assignor’s contract with the assignee.

(f) Notice of assignment is sufficient for purposes of subsections (d) and (e) of this section if the assignee notifies a party obliged to pay the mortgage debt (1) by mailing to the party obliged to pay, at the party’s last billing address, a notice of the assignment identifying the instrument and mortgage debt assigned, the party obliged to pay such debt, the names of the assignor and assignee, the date of the assignment, and the name and address of the person to whom payments should be made, (2) by giving notice of the assignment pursuant to 12 USC Section 2605, Section 6 of the federal Real Estate Settlement Procedures Act of 1974 and the regulations promulgated pursuant to said section, as from time to time amended, or (3) by giving actual notice of the assignment, reasonably identifying the rights assigned, in any other manner. No signature on any such notice is necessary to give sufficient notice of the assignment under this subsection and such notice may include any other information.

(g) Recordation of an assignment of mortgage debt is not sufficient notice of the assignment to the party obliged to pay for purposes of subsection (d) or (e) of this section.

(h) An assignment executed in accordance with this section shall operate to assign the interest of the assignor in the mortgage which is the subject of the assignment, even if such interest is, in fact, acquired by the assignor after executing such assignment or does not appear of record until after the execution of such assignment. Nothing in this subsection shall be construed to limit the effect of any assignment of mortgage debt recorded before, on or after October 1, 2006.

(1949 Rev., S. 7114; P.A. 75-24; P.A. 79-602, S. 70; P.A. 83-564, S. 1; P.A. 98-147, S. 1; June Sp. Sess. P.A. 98-1, S. 88; P.A. 06-156, S. 3.)

History: P.A. 75-24 applied provisions with respect to assignment of rent or assignment of interest in lease and added form for instrument of assignment; P.A. 79-602 substituted “is” for “shall be” and “that” or “the” for “such” where appearing; P.A. 83-564 added Subsec. (b) concerning the assignment of residential mortgage loans; P.A. 98-147 added new Subsec. (a) defining “mortgage debt”, redesignated existing Subsecs. (a) and (b) as Subsecs. (b) and (c), and added new Subsecs. (d), (e), (f) and (g) requiring sufficient notice of assignment by assignee and reasonable proof of assignment before party obliged to pay assignee; June Sp. Sess. P.A. 98-1 made technical changes in Subsec. (c); P.A. 06-156 added Subsec. (h) re operation of assignment executed in accordance with section.

See Sec. 7-34a re town clerks’ fees.

Cited. 121 C. 267. Assignment held valid even though assignee gave no consideration and did not know of assignment until after the death of the assignor. 148 C. 466. Cited. 202 C. 566.

Cited. 2 CA 98. Section does not indicate that a flaw in the instrument or its recordation would make it inadmissible as evidence. 51 CA 733. Assignment of note evidencing a debt automatically carries with it assignment of the mortgage even when mortgage is in the hands of another. 52 CA 374. There is no requirement that a party use the exact language or form provided for in Subsec. (b). 134 CA 699.

Validating act of 1933 cured the assignment of a mortgage which was defective because it was not under seal. 3 CS 321.

Sec. 49-10a. Request for payoff statement or reinstatement payment statement. (a) A mortgagee shall, upon written request of the mortgagor or the mortgagor’s attorney or other authorized agent provide a payoff statement or reinstatement payment statement in writing to the person requesting the payoff statement or reinstatement payment statement on or before the date specified in such request, provided such request date is at least seven business days after the date of receipt of the written request. If the request is made in connection with a default, the mortgagor’s attorney may make such written request directly to the mortgagee, provided such written request contains a representation that the person requesting the payoff statement or reinstatement payment statement is the mortgagor’s attorney and that the mortgagor has authorized the request.

(b) If the mortgagee fails to provide the payoff statement or reinstatement payment statement on or before such request date, the mortgagee shall not be entitled to the payment of any interest on the mortgage loan which is secured by such mortgage which accrues after the expiration of such request date. If the mortgagee provides the payoff statement or reinstatement payment statement to the person requesting such statement after the expiration of such request date, interest on the mortgage loan which accrues after the receipt of the payoff statement or the reinstatement payment statement by the person who has requested it shall again be payable. The burden of proof shall be on the mortgagor with respect to the receipt by the mortgagee of the mortgagor’s request for a payoff statement or a reinstatement payment statement of the mortgage loan, and thereafter shall be on the mortgagee with respect to the receipt of the payoff statement or reinstatement payment statement by the mortgagor or the mortgagor’s attorney or other authorized agent.

(c) The mortgagee shall not impose any fee or charge for the first payoff statement or reinstatement payment statement requested within a calendar year, unless the mortgagor or the mortgagor’s attorney or other authorized agent requests expedited delivery of such statement, agrees to pay a fee for such expedited delivery and the statement is provided by the agreed upon date.

(d) For the purposes of this section, “reinstatement payment statement” means a statement setting forth the total sum owed by a mortgagor to a mortgagee, which, if paid, will cause the loan to be reinstated, provided any other contractual conditions for reinstatement are satisfied.

(e) Nothing in this section shall create an obligation on the part of the mortgagee to provide a reinstatement payment statement if a right to cure the payment default and reinstate the mortgage loan does not exist under the mortgage loan documents or at law.

(P.A. 83-564, S. 2; P.A. 86-341, S. 2; P.A. 95-102, S. 3; P.A. 01-34, S. 15; P.A. 07-210, S. 2; P.A. 08-58, S. 1.)

History: P.A. 86-341 deleted former provisions and added new provision re request for payoff statement for mortgage on real estate located in this state which has been assigned; P.A. 95-102 deleted condition limiting applicability of provisions to assignments of mortgages on real estate located within state; P.A. 01-34 added provisions re fee or charge for the first payoff statement provided in a calendar year; P.A. 07-210 inserted Subsec. designators (a), (b) and (c), amended Subsec. (a) to make technical changes and add provision authorizing mortgagor’s attorney to make written request directly to mortgagee if request is made in connection with a default and contains a representation that the requester is mortgagor’s attorney and mortgagor has authorized request, and amended Subsec. (b) to make technical changes; P.A. 08-58 added provisions re reinstatement payment statements, made conforming changes, amended Subsec. (a) to change request date requirement from 10 to 7 business days and added Subsec. (d) re definition of “reinstatement payment statement” and Subsec. (e) re limitation on provision of reinstatement payment statement when right to cure payment default and reinstate mortgage loan does not exist.

Sec. 49-10b. Residential real estate transaction involving payoff of mortgage loan. Disclosure statement prepared and sent to mortgage holder by notification agent. Form. (a) For the purposes of this section:

(1) “Date of completion of the closing” means the date that payoff funds become available for transmittal to the mortgage holder;

(2) “Notification agent” means: (A) The buyer’s attorney, where the buyer is represented by an attorney and the seller is represented by a separate attorney who assumes the responsibility for transmitting the mortgage payoff funds to the mortgage holder; (B) the new lender, in a refinance situation where the attorney representing the mortgagor is also the attorney representing the new lender; (C) the seller, where the seller is not represented by an attorney and the attorney representing the buyer has taken the responsibility for transmitting the payoff funds to the mortgage holder; or (D) the seller’s attorney, where the buyer is represented by a separate attorney who assumes the responsibility for disbursing the mortgage payoff funds to the mortgage holder;

(3) “Mortgage holder” or “holder of the mortgage” means the owner of the mortgage or the mortgage servicer as set forth in the mortgage payoff letter provided to the notification agent;

(4) “Residential real estate transaction” means any real estate transaction involving a one-to-four family dwelling.

(b) At any residential real estate transaction involving the payoff of a mortgage loan, a disclosure statement shall be prepared by the notification agent and shall be sent by the notification agent by certified mail, return receipt requested or by confirmed facsimile transmission or by overnight carrier, to the holder of the mortgage which is to be paid off, within two business days from the date of completion of the closing. The disclosure statement shall include a copy of the payoff statement or other written authorization provided by the mortgage holder. The person or entity charged with the responsibility of securing the mortgage payoff statement shall transmit a copy of such payoff statement in a timely manner to the notification agent but, in any event, not later than the date of closing. To the extent not shown on the payoff statement, the disclosure statement shall identify the mortgage, the names of the mortgagors or borrowers, the loan number, the property address and the date of completion of the closing. The disclosure statement shall direct that, if funds are not received by the mortgage holder within five business days from the date of completion of the closing, notice of that fact shall be given to the notification agent. Such statement shall include the name, address, telephone and fax number, if available, of the notification agent. Such disclosure statement may be in substantially the following form:

NOTIFICATION

Please be advised that a loan from ..., (lender) to .... (mortgagor) dated .... and recorded in the land records in the town of .... in volume .... at page .... bearing loan number .... secured by a mortgage on .... (address), or as otherwise shown on the attached payoff statement, was paid at closing on .... (date of completion of the closing). If you do not receive the mortgage payoff funds within five business days of the date of completion of the closing, you are directed to notify this office immediately as follows:

Notification agent’s name ....

Address ....

Telephone number ....

Fax number ....

(P.A. 97-267, S. 2; P.A. 98-49; June 12 Sp. Sess. P.A. 12-2, S. 85.)

History: P.A. 98-49 amended Subsec. (a) by adding definition of “date of completion of the closing” and amended Subsec. (b) by deleting requirement that disclosure statement shall be executed by all parties or their attorneys, permitting disclosure statement to be sent by confirmed facsimile transmission, changing “mortgage lender” to “mortgage holder” and “pay off date” to “date of completion of the closing” (Revisor’s note: Opening and closing parentheses were inserted editorially by the Revisors around the words “date of completion of the closing” in the notification form in Subsec. (b)); June 12 Sp. Sess. P.A. 12-2 made a technical change in Subsec. (a)(1).

Sec. 49-11. Release of mortgage by executor, administrator, spouse, next of kin, guardian, conservator or other suitable person. The executor of the will or administrator of the estate of any deceased mortgagee, or the spouse or next of kin, or other suitable person whom the court considers to have a sufficient interest, to whom a decree is issued under section 45a-273, and any guardian whose ward, or conservator whose conserved person, as defined in section 45a-644, is a mortgagee, may, on the payment, satisfaction or sale of the mortgage debt, release the legal title to the party entitled thereto.

(1949 Rev., S. 7115; P.A. 79-193, S. 2; P.A. 80-483, S. 131, 186; P.A. 81-82, S. 2; P.A. 07-116, S. 30.)

History: P.A. 79-193 authorized spouse or next of kin to release legal title; P.A. 80-483 made slight change in wording for clarity; P.A. 81-82 permitted any suitable person deemed to have a sufficient interest by the court to release a mortgage of a deceased mortgagee; P.A. 07-116 substituted “considers” for “deems”, added “or conservator whose conserved person, as defined in section 45a-644” and made a conforming change.

Mortgage title does not revest by payment of mortgage money after law day. 17 C. 146. Under this section part of the land may be released on payment of part of the debt. 50 C. 266.

Sec. 49-12. Release of mortgage by foreign executor, administrator, trustee, conservator or guardian. The executor of the will or the administrator or trustee of the estate of any deceased nonresident, or the conservator or guardian of any nonresident person, may, by a release or assignment executed in the manner required for the execution of instruments conveying title to real estate in this state, release or assign any mortgage of real estate held by such deceased or nonresident person in this state, provided the executor, administrator, trustee, guardian or conservator shall file for record, with the town clerk of the town in which the real estate is situated, a certificate of his appointment and qualification, issued by the court having jurisdiction of the settlement of the estate of the deceased or the estate of the nonresident person.

(1949 Rev., S. 7116; 1953, S. 2953d; P.A. 79-602, S. 71.)

History: P.A. 79-602 substituted “the” for “such” where appearing.

Sec. 49-13. Petition for discharge of mortgage or ineffective attachment, lis pendens or lien. (a) When the record title to real property is encumbered (1) by any undischarged mortgage, and (A) the mortgagor or those owning the mortgagor’s interest therein have been in undisturbed possession of the property for at least six years after the expiration of the time limited in the mortgage for the full performance of the conditions thereof, and for six years next preceding the commencement of any action under this section, or (B) the promissory note or other written evidence of the indebtedness secured by the mortgage is payable on demand and seventeen years have passed without any payment on account of such note or other written evidence of indebtedness, or (C) the mortgage does not disclose the time when the note or indebtedness is payable or disclose the time for full performance of the conditions of the mortgage and ten years have passed without any payment on account of the promissory note or other written evidence of indebtedness, or (D) the note or evidence of indebtedness has been paid or a bona fide offer and tender of the payment has been made pursuant to section 49-8, or (E) the mortgage has become invalid, and in any of such cases no release of the encumbrance to secure such note or evidence of indebtedness has been given, or (2) by a foreclosed mortgage and the mortgagor has made a bona fide offer and tender of payment of the foreclosure judgment on or before the mortgagor’s law day and the mortgagee has refused to accept payment, or (3) by an attachment, lis pendens or other lien which has become of no effect, the person owning the property, or the equity in the property, may bring a petition to the superior court for the judicial district in which the property is situated, setting forth the facts and claiming a judgment as provided in this section. The plaintiff may also claim in the petition damages as set forth in section 49-8 if the plaintiff is aggrieved by the failure of the defendant to execute the release prescribed in said section.

(b) The petition shall be served upon all persons interested in the mortgage, attachment, lis pendens or other lien in the manner provided by law for process in civil actions and, in any action where the parties who may have an interest in the property and should be made parties thereto cannot be located by and are unknown to the petitioner in the action, the petitioner or the petitioner’s attorney shall annex to the petition in the action an affidavit stating that the petitioner does not know who the interested parties are or where they reside, or, if the party interested in the property is a corporation whose corporate existence has been legally terminated, or the corporation is no longer in existence or doing business, and the petitioner or the petitioner’s attorney states that fact in an affidavit, the court to which the action is brought or the clerk, assistant clerk or any judge thereof may make such order relative to the notice which shall be given in the cause as the court, clerk, assistant clerk or judge deems reasonable.

(c) Such notice having been given according to the order and duly proven, the court may proceed to a hearing of the cause at such time as it deems proper, and, if no evidence is offered of any payment on account of the debt secured by the mortgage within a period set out in subsection (a) of this section, or of any other act within such a period as provided in said subsection (a) in recognition of its existence as a valid mortgage, or if the court finds the mortgage has been satisfied but no release given as evidence of such satisfaction, or if the court finds that a bona fide offer and tender of payment of the foreclosure judgment or mortgage has been made and refused, or if the court finds the attachment, lis pendens or other lien has become of no effect, the court may render a judgment reciting the facts and its findings in relation thereto and declaring the mortgage, foreclosure judgment, attachment, lis pendens or other lien invalid as a lien against the real estate, and may order payment of any balance of indebtedness due on the mortgage or foreclosure judgment to the clerk of the court to be held for the benefit of the mortgagee or the persons interested and to be paid to the mortgagee by the clerk of the court upon application of the mortgagee or persons interested following the execution of a release of mortgage.

(d) Upon deposit of the balance of indebtedness with the clerk, such judgment shall issue, which judgment shall, within thirty days thereafter, be recorded in the land records of the town in which the property is situated, and the encumbrance created by the mortgage, foreclosure judgment, attachment, lis pendens or other lien shall be null and void and totally discharged. The town clerk of the town in which the real estate is situated shall, upon the request of any person interested, record a discharge of such encumbrance in the land records.

(1949 Rev., S. 7123; 1959, P.A. 425; 1969, P.A. 595, S. 2; 1971, P.A. 536; P.A. 78-280, S. 2, 127; P.A. 79-602, S. 72; P.A. 95-102, S. 4; P.A. 03-74, S. 1; P.A. 09-213, S. 5.)

History: 1959 act added provision re invalidity of mortgage as lien against real estate when title remains encumbered by undischarged mortgage and mortgagor or those owning his interest have been in possession of property for 60 years after time limited in mortgage for performance of its conditions; 1969 act clarified provisions re passage of 17 years, re failure to give release and re attachments, lis pendens or other liens of no effect and deleted provision added by 1959 act; 1971 act added provisions re foreclosure and clarified provisions re court action; P.A. 78-280 replaced “county” with “judicial district”; P.A. 79-602 divided section into Subsecs. and restated provisions but made no substantive changes; P.A. 95-102 changed requirement of undisturbed possession from 17 to 6 years and made technical changes; P.A. 03-74 amended Subsec. (a)(1)(C) by changing time period from 17 years to 10 years and made technical changes; P.A. 09-213 amended Subsec. (d) to replace requirement that town clerk “endorse on the record of the encumbrance or lien the words ‘discharged by judgment of the Superior Court’, and list the volume and page number in the land records where the judgment is recorded” with requirement that town clerk “record a discharge of such encumbrance in the land records”.

See Sec. 7-34a re town clerks’ fees.

Does not declare mortgage invalid; merely gives court right to declare it invalid under proper circumstances. 131 C. 38. This is not a statute of limitations. Id. Plaintiff held entitled to have mortgage declared invalid. 134 C. 420. Cited. 140 C. 474. Statute does not apply to those who recognize existence and validity of encumbering mortgage. 156 C. 49. Inequitable release of lis pendens, when. 162 C. 26. The procedure used by defendant in seeking to have his lis pendens discharged and the granting by the court of defendant’s motion does not meet the essential conditions prescribed. 165 C. 675. Cited. 188 C. 477. Cited. 223 C. 419.

It is six years of undisturbed possession that is crucial to obtaining relief under section, not six years of possession by one owner; therefore tacking prior owner’s period of possession to party’s period of possession is permitted to fulfill the six-year requirement. 81 CA 808.

Cited. 16 CS 257.

Subsec. (c):

Because plaintiffs’ properties were not encumbered by the notices of lis pendens, they could not properly invoke court’s authority under Subsec. to discharge the lis pendens as liens against the properties. 77 CA 276.

Sec. 49-13a. Undischarged mortgage invalid as further lien. Time periods. Tolling of time period by recording notice. (a) When record title to real property remains encumbered by any undischarged mortgage, and the mortgagor or those owning the mortgagor’s interest therein have been in undisturbed possession of the property for at least twenty years after the expiration of the time limited in the mortgage for the full performance of the conditions thereof, or for at least forty years from the recording of the mortgage if the mortgage does not disclose the time when the note or indebtedness is payable or the time for full performance of the conditions of the mortgage, unless a notice is recorded pursuant to subsection (b) of this section, the mortgage shall be invalid as a further lien against the real property, provided an affidavit, subscribed and sworn to by the party in possession, stating the fact of such possession, is recorded on the land records of the town in which the property is situated.

(b) The record holder of an undischarged mortgage on real property may, prior to the expiration of the applicable time period specified in subsection (a) of this section, record a notice, on the land records of the town in which the property is situated, that contains: (1) The name or names of the mortgagors; (2) the recording information for the mortgage and any assignment of the mortgage; and (3) a statement of the reasons why the mortgage is valid and effective. Upon the recording of such notice in accordance with this subsection, the applicable time period after which the mortgage shall be invalid as a further lien against the real property as provided in subsection (a) of this section shall be tolled for a period of ten years from the recording of such notice. Any such notice shall be indexed in the grantor’s index under the name or names of the mortgagors and in the grantee’s index under the name of the record holder of the mortgage.

(1969, P.A. 595, S. 3; P.A. 79-602, S. 73; P.A. 95-102, S. 5; P.A. 06-156, S. 4.)

History: P.A. 79-602 substituted “the” for “such” where appearing; P.A. 95-102 required 40 rather than 60 years of undisturbed possession and deleted reference to “presumed” invalidity of mortgage; P.A. 06-156 designated existing provisions as Subsec. (a) and amended same by replacing 40 years with 20 years re expiration of time limited in mortgage for full performance, adding provision re 40-year time period if mortgage does not disclose time payable or for full performance, inserting provision re notice recorded pursuant to Subsec. (b) and making technical changes, and added Subsec. (b) re tolling of applicable time period by recording notice.

Sec. 49-14. Deficiency judgment. (a) At any time within thirty days after the time limited for redemption has expired, any party to a mortgage foreclosure may file a motion seeking a deficiency judgment. Such motion shall be placed on the short calendar for an evidentiary hearing. Such hearing shall be held not less than fifteen days following the filing of the motion, except as the court may otherwise order. At such hearing the court shall hear the evidence, establish a valuation for the mortgaged property and shall render judgment for the plaintiff for the difference, if any, between such valuation and the plaintiff’s claim. The plaintiff in any further action upon the debt, note or obligation, shall recover only the amount of such judgment.

(b) Upon the motion of any party and for good cause shown, the court may refer such motion to a state referee, who shall have and exercise the powers of the court with respect to trial, judgment and appeal in such case.

(c) Any party to a mortgage foreclosure who has moved for an appraisal of property for the purpose of obtaining a deficiency judgment, but has not been granted a deficiency judgment, or has not received full satisfaction of any deficiency judgment obtained subsequent to the filing of such motion, may make a motion to the court for a deficiency judgment as set forth in subsection (a) of this section. If such motion is made on or before November 1, 1979, such moving party shall be deemed to have complied with all of the requirements of subsection (a) of this section and shall be entitled to the benefit of any deficiency judgment rendered pursuant to said subsection (a).

(d) Any appeal pending in the Supreme Court with regard to any deficiency judgment or proceedings relating thereto shall be stayed until a hearing is held pursuant to subsection (a) of this section. Any appellant in such an appeal shall have the right for a period of thirty days after the rendering of judgment pursuant to subsection (a) of this section to amend his appeal. There shall be no stay of such an appeal if no motion has been filed pursuant to this section on or before November 1, 1979.

(1949 Rev., S. 7195; P.A. 79-110, S. 1, 2.)

History: P.A. 79-110 entirely replaced previous provisions re appraisal of property and use of appraised value in determining awards to mortgage creditor and plaintiff in foreclosure proceedings.

A mortgage may be foreclosed for interest overdue on the mortgage note, where the principal is not yet due. 45 C. 159. Appraisers should report whole value of mortgaged property without reference to prior mortgages. 50 C. 292. Where creditor had a mortgage and a judgment lien on different lands for the same debt, debtor could not have appraisal of mortgaged property, and collection of balance of debt only from lien property; this section is not applicable. 54 C. 106. This remedy for collection of deficiency not exclusive. 55 C. 443; 91 C. 587; 102 C. 648; 109 C. 329; 128 C. 695. Effect of requirement as to crediting one-half the difference between the appraisal and the debt upon rights of subsequent mortgages. 89 C. 103. Deficiency judgment not proper if appraisal exceeds debt; reduction in value by prior encumbrances must be pleaded. 90 C. 618. If all three appraisers consider appraisal, and two concur in written report, statute is satisfied. 107 C. 275. However, all appraisers must have opportunity to participate in consideration of appraisal. 111 C. 492. Applies to purchase money mortgage. 116 C. 332. Appraisers act in quasi-judicial capacity and their report is final. 107 C. 272; 116 C. 333; However, a remonstrance will lie against their report for irregularity. 117 C. 239; 122 C. 455. Appraisal may not be made before the law day. 118 C. 570. Cited. 120 C. 671. Principles governing appraisal and limited function of court on review of same. 122 C. 455. Mistake of single appraiser insufficient to invalidate appraisal reached by all three. Id., 458. Date title vests in plaintiff controlling. Id., 459. Under former statute, judgment rendered after ninety days erroneous unless objection waived. 123 C. 583. Amount of deficiency against purchaser giving second mortgage as affected by his failure to assume first mortgage. 124 C. 604. Cited. 128 C. 693. Cited. 133 C. 154. Cited. 153 C. 274. Fact that statute does not require appraisers to hold hearings and receive evidence not violative of due process. Id., 292, 293. Trial court not in error in refusing to deduct from appraised value a contingent sewer assessment in such amount as should ultimately be determined to be due upon completion of the constructions. Id., 457. Appointment of appraisers pursuant to this statute necessary to obtain a deficiency judgment. Section 49-1 does not affect this section. 154 C. 216. Cited. 168 C. 554. To determine property value, statute does not bar court-appointed appraiser from consulting outside sources, including text books, public records and realtors or professional appraisers. 174 C. 77. Cited. Id., 268. Section held unconstitutional since it provides no statutory hearing and defendant deprived of right to be heard at a meaningful time and in a meaningful manner; violative of due process clauses of both state and federal constitutions. 176 C. 563. Cited. Id., 578. Cited. 180 C. 71. Cited. 183 C. 85. Cited. 184 C. 569. Cited. 190 C. 60. By its terms statute applicable only to claims by foreclosing plaintiffs. 199 C. 368. Cited. 216 C. 443. Cited. 222 C. 784. Cited. 227 C. 270. Cited. 228 C. 766; Id., 929. Cited. 233 C. 153. Cited. 241 C. 269. Statute applies only where title has vested in a foreclosing plaintiff. Because plaintiff did not acquire possession of units in foreclosure action, trial court in that action could not have made required determination that value of units was insufficient to satisfy plaintiff’s debt. 247 C. 575. Deficiency judgment provisions of section do not apply to tax lien foreclosure actions brought pursuant to Sec. 12-181. 255 C. 379. Deficiency judgment rendered pursuant to this section may be obtained in judgment lien foreclosure actions pursuant to Sec. 52-380a(c). Id. Deficiency judgment rendered pursuant to this section may be obtained in condominium lien foreclosure actions pursuant to Sec. 47-258(j). Id.

The fact that this statute makes no provision for attorneys’ fees is not controlling. The mandate of Sec. 49-7 is crystal clear so that such provision in this statute would be unnecessary and repetitive. Legal fees for services not yet performed discussed. 1 CA 30. Cited. 4 CA 426. Cited. 6 CA 691. Cited. 19 CA 291. Cited. 20 CA 638. Cited. 23 CA 266; Id., 159. Cited. 28 CA 809. Cited. 31 CA 1; Id., 80; Id., 260; Id., 266; Id., 476; Id., 621. Cited. 32 CA 309. Cited. 33 CA 388; Id., 401. Cited. 34 CA 204. Cited. 35 CA 81. Cited. 38 CA 198. Cited. 39 CA 684; Id., 829. Cited. 40 CA 115. Cited. 41 CA 324. Cited. 44 CA 439; Id., 588. In determining value, trier must consider everything that might legitimately affect value; failure requires a new deficiency hearing. 49 CA 452. Statute does not preclude recovery where a foreclosing mortgagee complies with the statutory provisions and seeks a deficiency judgment against guarantor who is obligated pursuant to a limited guarantee. 70 CA 341.

Rule of People’s Holding Co. v. Bray, 118 C. 568, upheld. 1 CS 45. A remonstrance to such a report alleging an irregularity as a matter of law should be joined by demurrer or answer. 3 CS 232. Cited. Id., 261. In the third sentence, the word “may” is permissive and not mandatory except as to the period of time in which the appraisal is to be made. Purpose of appraisal. Id., 395. No particular form for appraiser’s oath is provided. 4 CS 427. The action of two of the three appraisers acting without notice to the third could not make a legal determination of the value unless the third appraiser had knowledge of the meeting and an opportunity to be present. 5 CS 358. The fact that both causes, one seeking foreclosure and one on the mortgage debt, can be brought in one proceeding takes nothing away from the fundamental distinction between them. The complaint must allege facts descriptive of the essential elements of an action in equity in rem and one in personam at law. 6 CS 121. Appraisal made before time limited for redemption is invalid. Id., 398. On motion for deficiency judgment following foreclosure, it was not a valid objection that the report of the appraisers failed to give any indication that its compilation followed a public hearing, the reception of testimony or notice to the defendant. 12 CS 402. Section, to extent that it permits deficiency judgment, is in derogation of common law. It becomes increasingly more suspect as violative of due process clause. Since its appraisal provisions are for benefit of mortgagor, it must therefore be strictly construed. 34 CS 147. Cited. 41 CS 587.

Subsec. (a):

Application of procedures of this section effectively and constitutionally empowered by Sec. 49-14(d). 184 C. 569. Pursuant to Sec. 52-380a(c) provisions of this section concerning deficiency judgments apply to strict foreclosures on judgment liens. 220 C. 643. Thirty-day time limitation is inapplicable to motion for deficiency judgment following a judgment of foreclosure by sale. 222 C. 784. Cited. 234 C. 905. Cited. 237 C. 378.

Cited. 25 CA 159. Cited. 37 CA 423.

Cited erroneously as Sec. 49-14a. 42 CS 302.

Subsec. (d):

This section effectively and constitutionally empowered the trial court to apply the procedures of Sec. 49-14(a). 184 C. 569.

Sec. 49-15. Opening of judgments of strict foreclosure. (a)(1) Any judgment foreclosing the title to real estate by strict foreclosure may, at the discretion of the court rendering the judgment, upon the written motion of any person having an interest in the judgment and for cause shown, be opened and modified, notwithstanding the limitation imposed by section 52-212a, upon such terms as to costs as the court deems reasonable, provided no such judgment shall be opened after the title has become absolute in any encumbrancer except as provided in subdivision (2) of this subsection.

(2) Any judgment foreclosing the title to real estate by strict foreclosure may be opened after title has become absolute in any encumbrancer upon agreement of each party to the foreclosure action who filed an appearance in the action and any person who acquired an interest in the real estate after title became absolute in any encumbrancer, provided (A) such judgment may not be opened more than four months after the date such judgment was entered or more than thirty days after title became absolute in any encumbrancer, whichever is later, and (B) the rights and interests of each party, regardless of whether the party filed an appearance in the action, and any person who acquired an interest in the real estate after title became absolute in any encumbrancer, are restored to the status that existed on the date the judgment was entered.

(3) If a judgment is opened pursuant to this subsection, the person who filed the written motion pursuant to subdivision (1) of this subsection shall record a certified copy of the court’s order to open such judgment on the land records in the town in which the real estate is situated.

(b) Upon the filing of a bankruptcy petition by a mortgagor under Title 11 of the United States Code, any judgment against the mortgagor foreclosing the title to real estate by strict foreclosure shall be opened automatically without action by any party or the court, provided, the provisions of such judgment, other than the establishment of law days, shall not be set aside under this subsection, provided no such judgment shall be opened after the title has become absolute in any encumbrancer or the mortgagee, or any person claiming under such encumbrancer or mortgagee. The mortgagor shall file a copy of the bankruptcy petition, or an affidavit setting forth the date the bankruptcy petition was filed, with the clerk of the court in which the foreclosure matter is pending. Upon the termination of the automatic stay authorized pursuant to 11 USC 362, the mortgagor shall file with such clerk an affidavit setting forth the date the stay was terminated.

(1949 Rev., S. 7196; 1967, P.A. 286; P.A. 75-11; P.A. 79-602, S. 75; P.A. 02-93, S. 2; P.A. 03-202, S. 9; P.A. 04-127, S. 6; 04-257, S. 76; P.A. 09-209, S. 37.)

History: 1967 act deleted provision which specified that modification of foreclosure judgment is to be made “at the same term or the term next following that at which it was rendered”; P.A. 75-11 specified that modification of judgment may be made “notwithstanding that the term of court may have expired”; P.A. 79-602 replaced reference to expiration of term of court with reference to limitation imposed by Sec. 52-212a; P.A. 02-93 designated existing provisions as Subsec. (a) and added Subsec. (b) re automatic opening of judgment of strict foreclosure upon the filing of a bankruptcy petition by the mortgagor, effective June 3, 2002; P.A. 03-202 amended Subsec. (b) by adding provisions re the filing of a copy of the bankruptcy petition and affidavits by the mortgagor; P.A. 04-127 amended Subsec. (b) by deleting reference to Chapter 13 and making a technical change; P.A. 04-257 made a technical change in Subsec. (b), effective June 14, 2004; P.A. 09-209 designated existing provisions of Subsec. (a) as Subsec. (a)(1), added Subsec. (a)(2) and (3) re opening judgments of strict foreclosure, and made technical changes.

Error in opening judgment after law day may be waived. 115 C. 623. Petition for new trial by way of equitable relief after law day has passed. 118 C. 226; 128 C. 700. Plaintiff may move to open judgment if appropriation on day prejudicial or undesirable. 120 C. 26. Reopening as affected by bankruptcy proceedings. 123 C. 9. Whether or not “term” is construed to mean “session” immaterial. Id. Denial of motion to reopen correct when title had become absolute in plaintiff. 124 C. 610. In absence of waiver reopening after law day erroneous. 128 C. 700. Cited. 130 C. 77. Title held not absolute in any encumbrancer so as to nullify court’s right to open judgment. 137 C. 277. Cited. 179 C. 246. Cited. 181 C. 141; Id., 367. Cited. 187 C. 333. Cited. 193 C. 128. Cited. 216 C. 341. Cited. 219 C. 314. Appellate court should have found abuse of discretion in trial court’s refusal to implement purpose of statute; judgment of appellate court in Society for Savings v. Stramaglia, 25 CA 688, reversed. 225 C. 105. Section did not deprive trial court of jurisdiction to exercise its equitable discretion to open the judgment of strict foreclosure to correct an inadvertent omission in mortgage foreclosure complaint; judgment reversed. 244 C. 251.

Cited. 3 CA 508. Cited. 10 CA 160. Cited. 20 CA 163. Cited. 22 CA 396; Id., 468. Cited. 24 CA 42; Id., 469; Id., 688. Cited. 29 CA 508; Id., 541; Id., 628. Cited. 30 CA 541. Cited. 31 CA 1; Id., 80; Id., 621. Cited. 33 CA 401. Cited. 40 CA 115. Cited. 44 CA 588. Trial court action will not be disturbed on appeal unless a clear abuse of discretion. 48 CA 807. Legislature intended the phrase “after the title has become absolute in any encumbrancer,” to contemplate period commencing immediately after cessation of last day on which another party may redeem, not a full business day later. 66 CA 606. Trial court incorrectly determined that section prevented plaintiff from obtaining a judgment of strict foreclosure on second property absent a motion to open the judgment of strict foreclosure, and nothing in text of section prohibits plaintiff from proceeding on portion of complaint that remained after partial judgment of strict foreclosure. 105 CA 806. Under Subsec. (a), because title to the subject property had become absolute in plaintiff, the court did not have authority to grant defendant’s motion to open the judgment of strict foreclosure without a specific finding that it lacked personal jurisdiction over defendant. 129 CA 429. Where proceeding was equitable in nature, parties had notice of pending motions, and court pronounced an order to stay the law days, court had authority to open judgment despite court clerk’s failure to issue notice of the order to stay. 131 CA 471.

Rule of City Lumber v. Murphy, 120 C. 16, discussed. 2 CS 55. Action to open judgment of foreclosure is precluded if title has vested in the defendant. 14 CS 311. While motion to open judgment after title had become absolute in tax lienor town must be denied, foreclosed heirs may bring action in equity for relief from operation of judgment where enforcement of it would be against conscience. 27 CS 504.

Sec. 49-16. Foreclosure certificate. Penalty. When any mortgage of real estate has been foreclosed, and the time limited for redemption has passed, and the title to the mortgaged premises has become absolute in the mortgagee, or any person claiming under him, he shall, either in person or by his agent or attorney, forthwith make and sign a certificate describing the premises foreclosed, the deed of mortgage on which the foreclosure was had, the book and page where the same was recorded and the time when the mortgage title became absolute. The certificate shall be recorded in the records of the town where the premises are situated and shall be substantially in the form following:

To all whom it may concern. This certifies that a mortgage from .... of the town of ...., county of ...., in the state of ...., to .... of the town of ...., county of ...., and state of ...., bearing date the .... day of ...., A.D. ...., and recorded in the land records of the town of ...., book ...., page ...., was foreclosed upon the complaint of .... against ...., the owner of the equity of redemption in said mortgaged premises, and against ...., having an interest therein, in the .... court .... held at .... within and for the county of .... and the state of Connecticut on the .... day of ...., A.D. 20... The premises foreclosed are described as follows, viz.: .... The time limited for redemption in said judgment of foreclosure has passed and the title to said premises became absolute in the said .... on the .... day of ...., A.D. 20...

Dated at ...., this .... day of ...., 20...

If such person neglects to lodge the certificate for one month after the title becomes absolute, he shall be fined not more than five dollars.

(1949 Rev., S. 7197; P.A. 79-602, S. 76.)

History: P.A. 79-602 made minor changes in wording but made no substantive changes; (Revisor’s note: In 2001 the references in this section to the date “19..” were changed editorially by the Revisors to “20..” to reflect the new millennium).

Penalties for only one year before suit can be collected; filing of certificate before action no bar to action. 57 C. 52. Filing certificate does not extinguish mortgage debt unless premises are actually appropriated to its satisfaction; what constitutes such appropriation. 102 C. 648. Cited. 202 C. 566.

Cited. 20 CA 163.

Sec. 49-17. Foreclosure by owner of debt without legal title. When any mortgage is foreclosed by the person entitled to receive the money secured thereby but to whom the legal title to the mortgaged premises has never been conveyed, the title to such premises shall, upon the expiration of the time limited for redemption and on failure of redemption, vest in him in the same manner and to the same extent as such title would have vested in the mortgagee if he had foreclosed, provided the person so foreclosing shall forthwith cause the decree of foreclosure to be recorded in the land records in the town in which the land lies.

(1949 Rev., S. 7198.)

Failure to produce mortgage, if it is admitted in the pleadings, held of no consequence. 81 C. 422. Under section, the holder of a promissory note is presumed to be the owner of the debt and, unless the presumption is rebutted, the holder may foreclose the mortgage. 303 C. 224.

Section provides avenue for holder of note to foreclose on property when mortgage has not been assigned to him. 75 CA 791. Statute codifies common law principle of long standing that “the mortgage follows the note”, pursuant to which only note’s rightful owner has right to enforce the mortgage. 95 CA 390. Plaintiff had authority to bring foreclosure action where principals designated plaintiff as the payee and holder of a negotiable promissory note documenting defendants’ indebtedness, thereby unequivocally manifesting intention to authorize plaintiff to exercise rights that law of negotiable instruments confers on holder of promissory note. 135 CA 58.

Sec. 49-18. Foreclosure by executor, administrator or trustee. When any executor, administrator or trustee obtains a decree of foreclosure, the premises foreclosed, or the proceeds thereof if sold by him, shall be held by him in the same manner and for the benefit of the same persons and to be used for the same purposes and subject to the same rules as the money secured by the mortgage would have been if collected without foreclosure. If such premises are not sold by him, the same shall be distributed, or otherwise disposed of, to the persons who would have been entitled to the money if collected.

(1949 Rev., S. 7199; P.A. 79-602, S. 77.)

History: P.A. 79-602 substituted “proceeds” for “avails” and made another minor change in wording, creating two sentences from single previously existing sentence.

The heirs of a mortgage cannot sustain a bill for a foreclosure. 5 C. 139. Cited. 120 C. 671.

Sec. 49-19. Title to vest in encumbrancer paying debt and costs. In actions of foreclosure, when a judgment of strict foreclosure is rendered and there are subsequent encumbrances, the judgment may provide that, upon the payment of the debt and costs by any encumbrancer, after all subsequent parties in interest have been foreclosed, the title to the property shall vest absolutely in such encumbrancer making such payment, subject to such unpaid encumbrances, if any, as precede him.

(1949 Rev., S. 7200.)

Right of junior encumbrancer, not a party to foreclosure, to redeem. 68 C. 298. Effect of foreclosure decree in determining priorities among junior mortgagees. 78 C. 475. Right of attaching creditor to redeem. 83 C. 514; 89 C. 59; 102 C. 434. Effect of provision in judgment vesting title in subsequent encumbrancer who redeems; title of redeeming encumbrancer where there is no such provision. 95 C. 4. Foreclosing mortgagee gets no better title than mortgagor had at time mortgage was given. 96 C. 539. Statute does not require that judgment shall vest title in an encumbrancer who redeems, but it authorizes such a judgment. A judgment of foreclosure, as regards the lien of an attaching creditor, may condition title secured by lien. 134 C. 395. Cited. 188 C. 286. Cited. 216 C. 443.

Cited. 20 CA 163.

Cited. 25 CS 516. Cloud on title agreement effecting strict foreclosure, when. 30 CS 56.

Sec. 49-20. Redemption by holder of encumbrance on part of property foreclosed. When a strict foreclosure judgment contains a provision that title to the real estate being thereby foreclosed shall vest in the encumbrancer who redeems pursuant to the judgment, or specifies that the title shall vest in any particular person or persons who redeem as therein provided, the validity and effect of the judgment and of the provision therein shall not be limited or otherwise affected by the fact that the encumbrance or interest of the person so redeeming applies to or covers only a portion of the property described and being foreclosed in the judgment. In such case, if the foreclosure judgment requires that person to pay the entire amount thereof or be foreclosed of all equity to redeem the premises described in the judgment, the person shall, by the judgment, acquire all the rights and title of the foreclosing party granted by the judgment, as fully as if his interest or encumbrance covered all of the property described in the judgment.

(1949 Rev., S. 7201; P.A. 79-602, S. 78.)

History: P.A. 79-602 made minor changes in wording, substituting “the” for “such” where appearing, etc.

Cited. 25 CA 688.

Sec. 49-21. Defendant to receive and file certificate of satisfaction or certificates of judgment of strict foreclosure or foreclosure by sale. When, in any action of foreclosure, any defendant has paid the debt and costs and the title to the mortgaged premises has become absolute in such defendant, or any person claiming under him, in accordance with the provisions of sections 49-19 and 49-20, the plaintiff or person receiving such payment, either in person or by his agent or attorney, shall sign and deliver to the defendant a certificate of satisfaction of the judgment of foreclosure stating the name and residence of the defendant. The certificate shall be filed by him forthwith with the clerk of the court in which the judgment was rendered. A certified copy of the certificate of satisfaction of judgment, and of the judgment, or of a certificate of judgment of strict foreclosure or a certificate of judgment of foreclosure by sale shall be forthwith filed by the defendant for record in the land records of the town where such premises are situated.

(1949 Rev., S. 7202; 1949, S. 2971d; P.A. 79-602, S. 79; P.A. 92-38, S. 1.)

History: P.A. 79-602 changed wording slightly but made no substantive changes; P.A. 92-38 required that certified copies of certificates of judgment of strict foreclosure and certificates of judgment of foreclosure by sale be filed by defendant on land records.

A certificate foreclosure merely evidential of title. 111 C. 507.

Where defendant owner redeems, title need not become absolute in defendant owner as a condition precedent to applicability of section. 77 CA 276.

Sec. 49-22. Execution of ejectment on foreclosure judgment. Disposition of property. (a) In any action brought for the foreclosure of a mortgage or lien upon land, or for any equitable relief in relation to land, the plaintiff may, in his complaint, demand possession of the land, and the court may, if it renders judgment in his favor and finds that he is entitled to the possession of the land, issue execution of ejectment, commanding the officer to eject the person or persons in possession of the land and to put in possession thereof the plaintiff or the party to the foreclosure entitled to the possession by the provisions of the decree of said court, provided no execution shall issue against any person in possession who is not a party to the action except a transferee or lienor who is bound by the judgment by virtue of a lis pendens. The officer shall eject the person or persons in possession and may remove such person’s possessions and personal effects and deliver such possessions and effects to the place of storage designated by the chief executive officer of the town for such purposes.

(b) Before any such removal, the state marshal charged with executing upon the ejectment shall give the chief executive officer of the town twenty-four hours notice of the ejectment, stating the date, time and location of such ejectment as well as a general description, if known, of the types and amount of property to be removed from the land and delivered to the designated place of storage. Before giving such notice to the chief executive officer of the town, the state marshal shall use reasonable efforts to locate and notify the person or persons in possession of the date and time such ejectment is to take place and of the possibility of a sale pursuant to subsection (c) of this section and shall provide clear instructions as to how and where such person or persons may reclaim any possessions and personal effects removed and stored pursuant to this section, including a telephone number that such person or persons may call to arrange release of such possessions and personal effects.

(c) Whenever a mortgage or lien upon land has been foreclosed and execution of ejectment issued, and the possessions and personal effects of the person in possession thereof are removed by a state marshal under this section, such possessions and effects shall be delivered by such marshal to the designated place of storage. Such removal, delivery and storage shall be at the expense of such person. If the possessions and effects are not reclaimed by such person and the expense of the storage is not paid to the chief executive officer within fifteen days after such ejectment, the chief executive officer shall sell the same at public auction, after using reasonable efforts to locate and notify such person of the sale and after posting notice of the sale for one week on the public signpost nearest to the place where the ejectment was made, if any, or at some exterior place near the office of the town clerk. The chief executive officer shall deliver to such person the net proceeds of the sale, if any, after deducting a reasonable charge for storage of such possessions and effects. If such person does not demand the net proceeds within thirty days after the sale, the chief executive officer shall turn over the net proceeds of the sale to the town treasury.

(1949 Rev., S. 7203; 1955, S. 2972d; P.A. 79-602, S. 80; P.A. 82-234; P.A. 84-146, S. 17; 84-539; P.A. 00-99, S. 99, 154; P.A. 10-171, S. 2.)

History: P.A. 79-602 substituted “the” for “such” where appearing; P.A. 82-234 authorized an officer to remove the possessions and personal effects of a person ejected from the land and set them out on the adjacent sidewalk, street or highway, and added Subsecs. (b) and (c) concerning the procedure for the removal and disposition of such possessions and personal effects; P.A. 84-146 included a reference to posting of notice on a place other than a signpost; P.A. 84-539 amended Subsec. (a) with respect to persons against whom execution may issue by replacing “unless the person” with “except a transferee or lienor who”; P.A. 00-99 replaced reference to sheriff and deputy sheriff with state marshal in Subsec. (b), effective December 1, 2000 (Revisor’s note: A second reference in Subsec. (b) to “sheriff or deputy” was changed editorially by the Revisors to “state marshal” to conform with P.A. 00-99); P.A. 10-171 amended Subsec. (a) to authorize state marshal to deliver possessions and personal effects of persons in possession to place of storage designated by chief executive officer and delete provision re setting such possessions and effects out on the adjacent sidewalk, amended Subsec. (b) to add provision re delivery to designated place of storage and require state marshal charged with executing upon ejectment to provide instructions re how and where person in possession may reclaim removed possessions and effects, and made conforming changes in Subsec. (c), effective July 1, 2010.

This section not unconstitutional as infringing right of trial by jury. 46 C. 513. Action of administrator of deceased mortgagee who foreclosed in taking out execution after his death irregular. 79 C. 682. Right of mortgagee to possession of property; 75 C. 369; 83 C. 159; 87 C. 405; effect of stay of execution; 74 C. 683; appeal stays execution; 89 C. 413; if law day has passed, supreme court may extend time. 70 C. 92; 85 C. 383. Illegal ejectment against tenant not a party to foreclosure. 102 C. 437; 114 C. 93. Actual possession can be secured only by this method or by supplementary proceedings. 102 C. 649. Officer holding execution of ejectment need not make demand for payment of debt. 114 C. 438. Care which officer must exercise in handling personal property. Id. Sec. 47a-23c shields tenants who qualify for its protections from executions of judgments of ejectment pursuant to this section. 237 C. 679.

Injunction issued against execution of ejectment determined to be in violation of constitutional due process rights of tenants who were given no notice of the foreclosure action against owner of property occupied by the tenants. 38 CS 70. Cited. 43 CS 467.

Subsec. (a):

Prohibits issuance of an execution of ejectment against tenant who was not named as a party to the foreclosure action. 265 C. 741.

Sec. 49-22a. Execution of ejectment on foreclosure judgment on mortgage guaranteed by Administrator of Veterans’ Affairs. In any action brought for the foreclosure of a mortgage upon land where the court may, in accordance with the provisions of section 49-22, issue execution of ejectment to the plaintiff and the mortgage loan has been guaranteed by the Administrator of Veterans’ Affairs pursuant to Title III of an Act of Congress entitled “Servicemen’s Readjustment Act of 1944”, the court may issue execution of ejectment to put in possession of such land the Administrator of Veterans’ Affairs, upon the filing by the plaintiff of an affidavit that (1) the guarantee has been honored by the Administrator of Veterans’ Affairs, (2) the plaintiff’s title to the property has been conveyed to the Administrator of Veterans’ Affairs who has become subrogated to all the rights of the plaintiff in the property and (3) the foreclosure judgment has been assigned to the Administrator of Veterans’ Affairs.

(1971, P.A. 251.)

Sec. 49-23. Ejectment by mortgagee barred by tender of debt and costs. In any action brought by a mortgagee of real estate, or any person holding title under him, against the mortgagor, or any person holding title to the estate under him, to obtain possession of the estate by virtue of title derived by mortgage, a tender by the defendant of the amount of the debt, with interest and the costs of the suit, is a bar to its further prosecution.

(1949 Rev., S. 7204; P.A. 79-602, S. 81.)

History: P.A. 79-602 substituted “is” for “shall be” and “the” for “such” where appearing.

Sec. 49-24. Court may foreclose lien or mortgage on land by sale. All liens and mortgages affecting real property may, on the written motion of any party to any suit relating thereto, be foreclosed by a decree of sale instead of a strict foreclosure at the discretion of the court before which the foreclosure proceedings are pending.

(1949 Rev., S. 7205.)

Nature of sale. 98 C. 152. Procedure where one of two mortgages foreclosed is invalid in part. 103 C. 743. Whether foreclosure by sale will be ordered rests in discretion of court; refusal to order held proper. 108 C. 30. Remedy of second mortgagee order of sale and not apportionment. 119 C. 455. Cited. 179 C. 232. Cited. 196 C. 172. Cited. 199 C. 368.

Cited. 11 CA 53. Cited. 13 CA 239. Cited. 21 CA 275. Cited. 23 CA 192. Cited. 35 CA 81. In the absence of motion requesting foreclosure by sale, court did not err in ordering strict foreclosure; in Connecticut, strict foreclosure is the rule, foreclosure by sale the exception. 121 CA 554.

Cited. 25 CS 516.

Sec. 49-25. Appraisal of property. When the court in any such proceeding is of the opinion that a foreclosure by sale should be decreed, it shall, in its decree, appoint a person to make the sale and fix a day therefor, and shall direct whether the property shall be sold as a whole or in parcels, and how the sale shall be made and advertised; but, in all cases in which such sale is ordered, the court shall appoint one disinterested appraiser who shall, under oath, appraise the property to be sold and make return of the appraisal to the clerk of the court. Upon motion of the owner of the equity of redemption, the court shall appoint a second appraiser in its decree. If the plaintiff is the purchaser at sale, or if the property is redeemed at any time prior to the approval of the sale, or if for any reason the sale does not take place, the expense of the sale and appraisal or appraisals shall be paid by the plaintiff and be taxed with the costs of the case. If, after judgment has been rendered, the amount found to be due and for which foreclosure is decreed, together with the interest and the costs, is paid to the plaintiff before the sale, all further proceedings in the suit shall be stayed.

(1949 Rev., S. 7206; P.A. 79-602, S. 82; P.A. 91-50.)

History: P.A. 79-602 substituted “the” for “such” where appearing; P.A. 91-50 changed requirement of appointment of three appraisers to appointment of one appraiser and deleted language concerning acceptance by court of amount agreed upon by majority if lack of agreement by appraisers and substituted “Upon motion of the owner of the equity of redemption, the court shall appoint a second appraiser in its decree. If the plaintiff is the purchaser at sale, or if the property is redeemed at any time prior to the approval of the sale, or if for any reason the sale does not take place ...”.

See note to Sec. 49-28 re 113 C. 241. Appraisal upon a foreclosure by sale not conclusive as to value of property. 128 C. 694. Cited. 153 C. 269, 274. Cited. 157 C. 594. Cited. 189 C. 490. Cited. 220 C. 643. Cited. 222 C. 784. Cited. 227 C. 270. Cited. 241 C. 269. Statute recognizes that foreclosed property may be redeemed at any time prior to confirmation of the sale by the trial court; judgment of appellate court in Washington Trust Co. v. Smith, 42 CA 330, reversed. Id., 734. Conduct of judicial sale. 252 C. 623.

“Of such sale” not limited to ratified sales. 13 CA 239. Cited. 20 CA 638. Cited. 21 CA 275. Cited. 22 CA 396. Cited. 27 CA 549. Cited. 36 CA 313. Trial court is not bound to accept appraised value but may use the appraisal to assist in the exercise of its discretion in accepting or rejecting proposed sale. 75 CA 355. Statute does not permit court to order defendant to pay expenses of the sale. 80 CA 399. Court did not err in confirming foreclosure by sale without conducting evidentiary hearing because, although court may grant an evidentiary hearing upon request, defendant did not request such a hearing properly. 95 CA 279.

Sec. 49-26. Conveyance; title of purchaser. When a sale has been made pursuant to a judgment therefor and ratified by the court, a conveyance of the property sold shall be executed by the person appointed to make the sale, which conveyance shall vest in the purchaser the same estate that would have vested in the mortgagee or lienholder if the mortgage or lien had been foreclosed by strict foreclosure, and to this extent such conveyance shall be valid against all parties to the cause and their privies, but against no other persons. The court, at the time of or after ratification of the sale, may order possession of the property sold to be delivered to the purchaser and may issue an execution of ejectment after the time for appeal of the ratification of the sale has expired.

(1949 Rev., S. 7207; P.A. 90-280; P.A. 92-38, S. 2.)

History: P.A. 90-280 amended section to permit court to issue an execution of ejectment at the time of or after ratification of sale, effective after time for appeal of the ratification of sale has expired; P.A. 92-38 changed provision re issuance of execution of ejectment by permitting issuance after the time for appeal of ratification of the sale has expired.

Purchaser does not get title which will prevent redemption by subsequent encumbrancer not made party to foreclosure. 89 C. 64. Necessity and effect of ratification by court. 98 C. 153. Right of committee to require deposit without court order. Id., 154. Procedure where purchaser defaults. Id., 155 ff. Cited. 235 C. 741.

Cited. 9 CA 446. Cited. 13 CA 239. Cited. 22 CA 396. Motion to open and set aside approval of sale filed during an appeal period stays proceedings until court rules on the motion. 98 CA 72.

Cited. 43 CS 467.

Sec. 49-27. Disposal of proceeds of sale. The proceeds of each such sale shall be brought into court, there to be applied if the sale is ratified, in accordance with the provisions of a supplemental judgment then to be rendered in the cause, specifying the parties who are entitled to the same and the amount to which each is entitled. If any part of the debt or obligation secured by the mortgage or lien foreclosed or by any subsequent mortgage or lien was not payable at the date of the judgment of foreclosure, it shall nevertheless be paid as far as may be out of the proceeds of the sale as if due and payable, with rebate of interest where the debt was payable without interest, provided, if the plaintiff is the purchaser at any such sale, he shall be required to bring into court only so much of the proceeds as exceed the amount due upon his judgment debt, interest and costs.

(1949 Rev., S. 7208; P.A. 79-602, S. 83.)

History: P.A. 79-602 made minor changes in wording but made no substantive changes.

Procedure. 98 C. 154 ff. Rights of parties to fund realized from sale should be determined by a supplementary judgment. 103 C. 744. Cited. 120 C. 671. The decree of foreclosure by sale should not adjudicate the rights of the parties to the funds realized; those rights should be determined by way of supplemental judgment. 142 C. 200. On sale of four mortgaged parcels as one tract, after satisfying first mortgage debt, proceeds remaining were apportioned between second mortgagees according to the respective values of their securities and not according to a rule of priority in time. 153 C. 267. Cited. 166 C. 195. Cited. 195 C. 418. Cited. 219 C. 620. Cited. 235 C. 741.

Cited. 27 CA 549. Court’s order with respect to funds from foreclosure sale was not a garnishment of funds held by court clerk and court had authority to order the clerk to hold rather than to distribute the funds pending the outcome of appeal. 87 CA 321.

Claim of mechanic’s lienor which has not expired at time of mortgage sale is transferred to proceeds of sale. 20 CS 460.

Sec. 49-28. When proceeds of sale will not pay in full. If the proceeds of the sale are not sufficient to pay in full the amount secured by any mortgage or lien thereby foreclosed, the deficiency shall be determined, and thereupon judgment may be rendered in the cause for the deficiency against any party liable to pay the same who is a party to the cause and has been served with process or has appeared therein, and all persons liable to pay the debt secured by the mortgage or lien may be made parties; but all other proceedings for the collection of the debt shall be stayed during the pendency of the foreclosure suit, and, if a deficiency judgment is finally rendered therein, the other proceedings shall forthwith abate. If the property has sold for less than the appraisal provided for in section 49-25, no judgment shall be rendered in the suit or in any other for the unpaid portion of the debt or debts of the party or parties upon whose motion the sale was ordered, nor shall the same be collected by any other means than from the proceeds of the sale until one-half of the difference between the appraised value and the selling price has been credited upon the debt or debts as of the date of sale; and, when there are two or more debts to which it is to be applied, it shall be apportioned between them.

(1949 Rev., S. 7209; P.A. 79-602, S. 84.)

History: P.A. 79-602 substituted “the” for “such” where appearing.

Provision for crediting one-half difference between appraisal and sale price not applicable against subsequent encumbrancer. 89 C. 101. Liability of endorsers for balance of deficiency judgment in separate action. 100 C. 711. Guarantor of note allowed same statutory credit as mortgagor. 113 C. 241. Cited. 120 C. 671. See note to Sec. 49-25 re 128 C. 694. Cited. 220 C. 152; Id., 643. Cited. 222 C. 784. Cited. 227 C. 270. Cited. 235 C. 741. Cited. 241 C. 269.

Cited. 23 CA 266. Cited. 28 CA 809. Cited. 31 CA 1; Id., 621. Cited. 36 CA 313. Cited. 38 CA 240.

Sec. 49-29. Expenses of sale and costs. The court shall order the judgment and costs of the plaintiff to be first paid out of the proceeds of such sale and shall allow, to such of the parties as receive the balance of such proceeds, the costs usually allowed to successful parties, which costs shall be paid in addition to their respective claims and in the same order.

(1949 Rev., S. 7210.)

Sec. 49-30. Omission of parties in foreclosure actions. When a mortgage or lien on real estate has been foreclosed and one or more parties owning any interest in or holding an encumbrance on such real estate subsequent or subordinate to such mortgage or lien has been omitted or has not been foreclosed of such interest or encumbrance because of improper service of process or for any other reason, all other parties foreclosed by the foreclosure judgment shall be bound thereby as fully as if no such omission or defect had occurred and shall not retain any equity or right to redeem such foreclosed real estate. Such omission or failure to properly foreclose such party or parties may be completely cured and cleared by deed or foreclosure or other proper legal proceedings to which the only necessary parties shall be the party acquiring such foreclosure title, or his successor in title, and the party or parties thus not foreclosed, or their respective successors in title.

(1949 Rev., S. 7211.)

Does not change common law rights of those parties who had been omitted from the first foreclosure and thus does not create substantive rights. 278 C. 219.

Cited. 37 CA 764. Section establishes procedure for foreclosing an encumbrance that is omitted in the original foreclosure. Term “encumbrance” refers to recorded encumbrances. Section intended to benefit foreclosing party who, through mistake or oversight, omitted an encumbrance; it is not intended to be used as a sword by the omitted party. 63 CA 624. Section unconditionally imposes the risk of undisclosed liens on the purchaser of property at a foreclosure sale, and imposes no duty to warn prospective purchasers of the risk of an undisclosed lien, although equity requires reasonable cautionary instructions to prospective purchasers. 130 CA 692.

Sec. 49-31. Actions against the state. In any action to foreclose a mortgage or lien on any land in which the state, or any officer or agent thereof, claims to have an interest subordinate to that of the party seeking the foreclosure, the state, or such officer or agent, as the case may be, may be made a party defendant, and such interest may be foreclosed in the same manner and with the same effect as if such interest were held by an individual, except that no judgment may be rendered against the state or any officer or agent for money or costs of suit.

(1949 Rev., S. 7212.)

Cited. 206 C. 484. Section does not waive sovereign immunity so as to permit foreclosure of state-owned real property; term “interest” should be construed narrowly so as not to include the state’s ownership interest in real property because to conclude otherwise would lead to the unreasonable and bizarre result of the state losing title and possession of state-owned properties critical to the administration of state government, contrary to the fundamental public policy that underlies the principle of sovereign immunity. 273 C. 287.

Cited. 11 CA 53.

Sec. 49-31a. Subordination clauses. Section 49-31a is repealed.

(P.A. 76-357, S. 1, 3; P.A. 78-89, S. 2, 3.)

Sec. 49-31b. Information in deed sufficient notice as to nature and amount of obligation. Deed for variable rate mortgage loan. (a) A mortgage deed given to secure payment of a promissory note, which furnishes information from which there can be determined the date, principal amount and maximum term of the note, shall be deemed to give sufficient notice of the nature and amount of the obligation to constitute a valid lien securing payment of all sums owed under the terms of such note.

(b) With regard to a mortgage deed given to secure payment of a promissory note which contains a provision expressly providing that the interest rate set forth in the note may vary one or more times during the life of the note and that such changes in rate may cause the term of the note to change, the “maximum term” shall be adequately disclosed if the mortgage deed furnishes information from which can be determined: (1) A statement that the interest rate is subject to variation, (2) the conditions under which such rate may vary, (3) the manner, including changes in payment amounts, number of scheduled periodic payments, or change in the amount due at maturity, in which any increase and decrease in the rate may be effected, and (4) the date, if applicable, by which according to the terms of the note, remaining amounts of principal and interest, if any, shall be due and payable in full, regardless of changes in the interest rate. The mortgagee shall give written notice of any change in the interest rate to a second or subsequent encumbrancer, provided such encumbrancer has given written notice by registered mail, return receipt requested, of its encumbrance to the mortgagee. The provisions of this section shall not invalidate any mortgage which would be valid without this section.

(P.A. 76-357, S. 2, 3; P.A. 81-391, S. 1.)

History: P.A. 81-391 added Subsec. (b) concerning the information required in a mortgage deed to adequately disclose the maximum term of a note with a variable interest rate and requiring the mortgagee to give notice of any change in the interest rate to a second or subsequent encumbrancer.

Cited. 202 C. 566. Cited. 232 C. 294.

Subsec. (a):

Supplements but does not supplant relevant common law standards for validity of mortgages. 202 C. 566. Cited. 210 C. 221. Cited. 230 C. 828.

Sec. 49-31c. When subordination not subject to statute of frauds and automatically effective. A subordination agreement which provides that a mortgage, lease or other interest in real property shall be subordinated to one or more future mortgages is not subject to the provisions of section 52-550 and is valid and binding notwithstanding that the subordination agreement does not contain any of the terms or provisions of the future mortgage or mortgages. If the subordination agreement so provides, the subordination is automatically effective at such time or times as the future mortgage or mortgages come into existence without the necessity for the subordinating party to execute any further instruments, provided the mortgage does not violate the terms of the original subordination agreement.

(P.A. 78-89, S. 1, 3; P.A. 79-602, S. 66.)

History: P.A. 79-602 rephrased provisions but made no substantive changes.

Sec. 49-31d. Definitions. For the purposes of sections 49-31d to 49-31i, inclusive:

(1) “Unemployed person” means a person who is unemployed for purposes of chapter 567.

(2) “Homeowner” means a person who has an ownership interest in residential real property secured by a mortgage which is the subject of a foreclosure action, and who has owned and occupied such property as his principal residence for a continuous period of not less than two years immediately preceding the commencement of such foreclosure action.

(3) “Restructured mortgage debt” means the adjustment by a court of a mortgage debt to give protection from a foreclosure action.

(4) “Protection from foreclosure” means a court-ordered restructuring of a mortgage debt designed to eliminate an arrearage in payments on such debt and to provide a period not to exceed six months during which foreclosure is stayed.

(5) “Lender” means any person who makes or holds mortgage loans in the ordinary course of business and who is the holder of any first mortgage on residential real estate which is the subject of a foreclosure action.

(6) “Underemployed person” means a person whose earned income during the twelve-month period immediately preceding the commencement of the foreclosure action is (A) less than fifty thousand dollars and (B) less than seventy-five per cent of his average annual earned income during the two years immediately preceding such twelve-month period.

(P.A. 83-547, S. 6; June Sp. Sess. P.A. 83-29, S. 71; P.A. 84-373, S. 1; 84-546, S. 107, 173.)

History: June Sp. Sess. P.A. 83-29 revised section, changed definition of “homeowner”, deleted definition of “financial institution”, added definitions of “lender” and “underemployed person” and made technical changes; P.A. 84-373 amended Subsec. (6) to require an “underemployed person” to have an earned income which is less than $50,000; P.A. 84-546 made technical change; (Revisor’s note: In 1995 the indicators (1) and (2) in Subdiv. (6) were changed editorially by the Revisors to (A) and (B) respectively for consistency with statutory usage).

Only persons who have been employed previously may be considered “unemployed” as defined in this section. 245 C. 744.

Cited. 29 CA 541. Cited. 31 CA 260. Cited. 34 CA 138.

Sec. 49-31e. Notice to homeowner of protections from foreclosure. (a) In an action by a lender for the foreclosure of a mortgage of residential real property, such lender shall give notice to the homeowner of the availability of the provisions of sections 49-31d to 49-31i, inclusive, at the time the action is commenced.

(b) A homeowner who is given notice of the availability of the provisions of sections 49-31d to 49-31i, inclusive, must make application for protection from foreclosure within twenty-five days of the return day.

(c) No judgment foreclosing the title to real property by strict foreclosure or by a decree of sale shall be entered unless the court is satisfied from pleadings or affidavits on file with the court that notice has been given to the homeowner against whom the foreclosure action is commenced of the availability of the provisions of sections 49-31d to 49-31i, inclusive.

(d) If a homeowner against whom the foreclosure action is commenced was not given notice of the availability of the provisions of sections 49-31d to 49-31i, inclusive, at the time the action was commenced, and such homeowner was eligible to apply for protection from foreclosure at such time, the court, upon its own motion or upon the written motion of such homeowner, may issue an order staying the foreclosure action for fifteen days during which period the homeowner may apply to the court for protection from foreclosure by submitting an application together with a financial affidavit as required by subsection (a) of section 49-31f.

(P.A. 83-547, S. 7; June Sp. Sess. P.A. 83-29, S. 72; P.A. 84-373, S. 2, 5; 84-546, S. 108, 173; P.A. 97-320, S. 1.)

History: June Sp. Sess. P.A. 83-29 deleted references to “financial institution” and substituted “lender” in lieu thereof; P.A. 84-373, S. 2, made technical clarifications (Revisor’s note: The Revisors editorially designated said section 2 as Subsec. (a) and added section 5 of the act as Subsecs. (b), (c) and (d) concerning a homeowner’s deadline for making application, assurances that notice of availability of protection have been given and failure to give notice); P.A. 84-546 made technical clarifications; P.A. 97-320 amended Subsec. (b) by increasing time for application from 15 to 25 days of the return day.

Cited. 29 CA 541. Cited. 31 CA 260. Cited. 34 CA 138.

Sec. 49-31f. Application for protection from foreclosure action. Qualifications. Court determination of eligibility. Stay of foreclosure action. (a) Subject to the provisions of subsection (b) of this section, a homeowner who is underemployed or unemployed against whom a foreclosure action is brought may make application, together with a financial affidavit, to the court having jurisdiction over the foreclosure action for protection from foreclosure if: (1) The mortgage being foreclosed encumbers the residential real property, which property has served as such homeowner’s principal residence, for a period of not less than two years, (2) such homeowner has not had a foreclosure action commenced against such homeowner in the preceding seven-year period, and (3) such homeowner has not received an emergency mortgage assistance loan and has not applied for emergency mortgage assistance for two years before the application under the provisions of sections 8-265cc to 8-265ii, inclusive.

(b) If the residential real property which is the subject of a foreclosure action is owned by more than one person, (1) no homeowner shall be deemed an unemployed person or an underemployed person, for the purposes of sections 49-31d to 49-31i, inclusive, unless the aggregate earned income of all the homeowners of the residential real property which is the subject of such foreclosure action during the twelve-month period immediately preceding the commencement of the foreclosure action is less than fifty thousand dollars and less than seventy-five per cent of the average aggregate annual earned income during the two years immediately preceding such twelve-month period for all such homeowners, and (2) all homeowners of such property other than the homeowner making application in accordance with subsection (a) of this section shall file a financial affidavit in connection with such application.

(c) The court shall determine the eligibility of such homeowner for protection from foreclosure pursuant to the provisions of sections 49-31d to 49-31i, inclusive.

(d) In determining the eligibility of a homeowner for protection from foreclosure under the provisions of sections 49-31d to 49-31i, inclusive, the court may consider any relevant facts and shall consider:

(1) The likelihood that the homeowner will be able to make timely payments on the restructured mortgage commencing at the end of the restructuring period; and

(2) The presence of any substantial prejudice to the lender or any subordinate lienor or encumbrancer which would result from a restructuring of the mortgage debt.

(e) If the court determines the equity the homeowner has in the property and hears testimony from an appraiser produced by the lender in connection with such determination, (1) the reasonable cost of the appraisal and the appraiser’s appearance as a witness shall be part of the court costs to be added to the principal balance pursuant to subdivision (4) of subsection (a) of section 49-31i if a restructuring order is granted, and (2) the reasonable cost of such appraiser’s appearance as a witness shall be part of the taxable costs of the action, in addition to the taxable costs for such appraisal and the appraiser’s appearance as a witness at a subsequent hearing for a judgment of foreclosure if such order is not granted.

(f) If the court approves the application for protection from foreclosure and restructures the mortgage debt, the foreclosure action shall be stayed for the restructuring period. If, for a period of three months following the end of the restructuring period, there are no further proceedings to continue the foreclosure proceedings based upon a default on the mortgage as restructured, the foreclosure action shall be dismissed. The restructured mortgage debt shall have the same priority as if it had been advanced at the time the mortgage was delivered.

(g) No homeowner who files a defense to any action for foreclosure shall be eligible to make application for protection from such foreclosure pursuant to the provisions of this section.

(P.A. 83-547, S. 8; June Sp. Sess. P.A. 83-29, S. 73; P.A. 84-373, S. 3; 84-546, S. 109, 173; P.A. 93-414, S. 8, 10; P.A. 07-217, S. 182.)

History: June Sp. Sess. P.A. 83-29 revised section, making various technical changes, inserting “homeowner who is underemployed or unemployed” for “person” in Subsec. (a) and “lender or any subordinate lienor or encumbrancer” for “financial institution” in Subsec. (c)(5), and adding provisions in Subsec. (d) re dismissal of foreclosure action and priority of restructured mortgage debt; P.A. 84-373 inserted new Subsec. (b) to establish eligibility requirements for real property owned by more than one homeowner, relettered former Subsecs. (b) and (c) accordingly and deleted duration of unemployment, record of payment and amount of equity as criteria to determine eligibility, inserted new Subsec. (e) to provide for payment of appraisal costs, relettered former Subsec. (d) as (f) and added Subsec. (g) to deny availability of protection for persons who file any defense to the foreclosure action; P.A. 84-546 made technical changes; P.A. 93-414 added Subsec. (a)(3) making mortgagors who received emergency mortgage assistance loans and applied for such assistance within two years ineligible for protection, effective July 1, 1993; P.A. 07-217 made technical changes, effective July 12, 2007.

Cited. 29 CA 541. Cited. 31 CA 260. Cited erroneously as Sec. 49-31(f). Id., 939. Cited. 34 CA 138. Cited. 43 CA 467. Trial court properly denied defendants’ application for protection from foreclosure where defendants’ future earnings were speculative, they had no equity in the property, it was unlikely they would be able to make timely payments on restructured mortgage and plaintiff would be prejudiced by restructuring the mortgage. 54 CA 529. Granting of defendant’s application for protection is not an appealable final judgment. 85 CA 120.

Subsec. (a):

Clear language of subsec. denies foreclosure protection to anyone who has had a foreclosure action filed against him or her within prior 7-year period regardless of reason for its commencement and even if it was subsequently withdrawn. 103 CA 264.

Sec. 49-31g. Restructuring of mortgage debt by court. (a) If it determines that a homeowner who is an underemployed person is eligible for protection from foreclosure pursuant to subsections (a) and (c) of section 49-31f, the court in its discretion may order the restructuring of the mortgage debt of such homeowner so as to eliminate any arrearage in payments on the mortgage debt and may allow a restructuring period not to exceed six months.

(b) If it determines that a homeowner who is an unemployed person is eligible for protection from foreclosure pursuant to subsection (a) of section 49-31f, the court shall order the restructuring of the mortgage debt to eliminate any arrearage in payments on the mortgage debt and shall order a restructuring period not to exceed six months.

(P.A. 83-547, S. 9; June Sp. Sess. P.A. 83-29, S. 74.)

History: June Sp. Sess. P.A. 83-29 revised section and added provisions requiring determination of court that homeowner who is underemployed or unemployed is eligible for foreclosure protection pursuant to Sec. 49-31f prior to ordering restructuring of mortgage debt.

Cited. 29 CA 541. Cited. 31 CA 260. Cited. 34 CA 138. Cited. 43 CA 467.

Sec. 49-31h. Partial payment by homeowner mandated by court as condition for granting of restructuring order. (a) As a condition to the granting of a restructuring order, the court may order the homeowner to pay to the lender during the restructuring period an amount not to exceed twenty-five per cent of his net income per month as a means of demonstrating the homeowner’s good faith effort to reduce his mortgage indebtedness.

(b) For purposes of this section, “net income” shall include any unemployment benefit received by the homeowner in accordance with chapter 567.

(P.A. 83-547, S. 10; June Sp. Sess. P.A. 83-29, S. 75.)

History: June Sp. Sess. P.A. 83-29 deleted reference to “financial institution” and substituted “lender during the restructuring period” in lieu thereof.

Cited. 29 CA 541. Cited. 31 CA 260. Cited. 34 CA 138.

Sec. 49-31i. Determination of restructured mortgage debt. Limitations on amount of mortgage debt following restructuring. Computation of new mortgage debt. (a) In determining the restructured mortgage debt, the court shall add the following to the existing principal balance of the mortgage debt: (1) All interest then due the lender and any interest that will be earned to the end of any restructuring period, including interest on any payments advanced by the lender during the restructuring period, such interest to be computed at the rate provided in the mortgage note, (2) real property taxes, (3) premiums for Federal Housing Administration, Veterans’ Administration and private mortgage insurance, and (4) court costs, legal fees and any other sums the court determines to be due under the terms of the mortgage indebtedness by the court. The court shall then apply the composite interest rate as provided in subsection (c) of this section to such total restructured debt over the remaining term of the loan.

(b) The amount of the mortgage debt at the end of any period of restructuring shall in no event exceed either the amount of the original mortgage debt or ninety per cent of the fair market value of the property as determined by an accredited real estate appraiser at the time of restructuring, whichever is greater. The provisions for restructuring the mortgage debt and staying the foreclosure shall apply only if the debt as restructured would not exceed such amount. Any sums added to the existing mortgage debt as a result of a restructuring order shall accrue interest at prevailing market rates after the conclusion of the restructuring period, which rate shall be either fixed or variable depending upon the underlying mortgage note.

(c) At the conclusion of the restructuring period, the new mortgage debt shall be computed based upon a composite rate of interest. The composite rate of interest shall be a weighted average of the original mortgage interest rate as to the principal balance and the prevailing interest rate as to all sums added to the principal balance to establish the total restructured mortgage debt, except that in the case of a flexible rate, variable rate or similar adjustable rate mortgage note, the provisions of the underlying mortgage note for the redetermination of the interest rate on the mortgage shall continue to apply and remain in full force and effect during the remainder of the term of the mortgage.

(P.A. 83-547, S. 11; June Sp. Sess. P.A. 83-29, S. 76; P.A. 84-373, S. 4; P.A. 85-591.)

History: June Sp. Sess. P.A. 83-29 revised section, adding new provisions in Subsec. (a) re method of determination of restructured mortgage debt, adding provisions re applicability of provisions for restructuring mortgage debt and staying foreclosure and rate of interest on sums adding to existing mortgage note in Subsec. (b), and adding provisions in Subsec. (c) re composite rate of interest; P.A. 84-373 amended Subsec. (a) to include interest on advancements made during the restructuring period in the restructured debt; P.A. 85-591 amended Subsec. (b) to permit the restructured mortgage debt to exceed the greater of the original mortgage debt or 90% of the fair market value of the property.

Cited. 29 CA 541. Cited. 31 CA 260. Cited. 34 CA 138.

Sec. 49-31j. Regulations. The Banking Commissioner shall adopt such regulations, in accordance with chapter 54, as the commissioner deems necessary specifying (1) the manner in which a composite interest rate shall be computed for the new mortgage debt pursuant to subsection (c) of section 49-31i, (2) the method or standard by which prevailing market rates of interest are to be determined, and (3) a form a lender may use to give notice pursuant to section 49-31e to a homeowner of the availability of the provisions of sections 49-31d to 49-31i, inclusive.

(June Sp. Sess. P.A. 83-29, S. 77; P.A. 87-9, S. 2, 3; P.A. 03-84, S. 39; P.A. 04-8, S. 12; P.A. 05-46, S. 18.)

History: (Revisor’s note: Pursuant to P.A. 87-9 “banking commissioner” was changed editorially by the Revisors to “commissioner of banking”); P.A. 03-84 changed “Commissioner of Banking” to “Banking Commissioner” and made a technical change, effective June 3, 2003; P.A. 04-8 made technical changes, effective April 16, 2004; P.A. 05-46 added Subdiv. (3) requiring commissioner to adopt regulations specifying a form that lender may use to give notice pursuant to Sec. 49-31e to homeowner of the availability of the provisions of Secs. 49-31d to 49-31i, inclusive.

Cited. 34 CA 138.

Sec. 49-31k. Definitions. As used in this section and sections 49-31l to 49-31o, inclusive:

(1) “Mortgagor” means: (A) The owner-occupant of one-to-four family residential real property located in this state who is also the borrower under a mortgage encumbering such residential real property, which is the primary residence of such owner-occupant, or (B) a religious organization that is (i) the owner of real property located in this state, and (ii) the borrower under a mortgage encumbering such real property;

(2) “Residential real property” means a one-to-four family dwelling occupied as a residence by a mortgagor;

(3) “Mortgagee” means the original lender or servicer under a mortgage, or its successors or assigns, who is the holder of any mortgage on residential real property or real property owned by a religious organization securing a loan made primarily for personal, family, religious or household purposes that is the subject of a foreclosure action;

(4) “Authority” means the Connecticut Housing Finance Authority created under section 8-244;

(5) “Mortgage assistance programs” means the mortgage assistance programs developed and implemented by the authority in accordance with sections 8-265cc to 8-265kk, inclusive, 8-265rr and 8-265ss; and

(6) “Religious organization” means an organization that meets the religious purposes test of Section 501(c)(3) of the Internal Revenue Code of 1986.

(P.A. 08-176, S. 15; P.A. 11-201, S. 1.)

History: P.A. 08-176 effective July 1, 2008; P.A. 11-201 redefined “mortgagor” in Subdiv. (1) and “mortgagee” in Subdiv. (3) and added Subdiv. (6) defining “religious organization”, effective July 1, 2011.

Sec. 49-31l. Foreclosure mediation: Notice of foreclosure mediation program. Forms. Procedure. Stay of litigation. (a) Prior to July 1, 2014: (1) Any action for the foreclosure of a mortgage on residential real property with a return date during the period from July 1, 2008, to June 30, 2009, inclusive, shall be subject to the provisions of subsection (b) of this section, and (2) any action for the foreclosure of a mortgage on (A) residential real property with a return date during the period from July 1, 2009, to June 30, 2014, inclusive, or (B) real property owned by a religious organization with a return date during the period from October 1, 2011, to June 30, 2014, inclusive, shall be subject to the provisions of subsection (c) of this section.

(b) (1) Prior to July 1, 2012, when a mortgagee commences an action for the foreclosure of a mortgage on residential real property with a return date during the period from July 1, 2008, to June 30, 2009, inclusive, the mortgagee shall give notice to the mortgagor of the foreclosure mediation program established in section 49-31m by attaching to the front of the foreclosure complaint that is served on the mortgagor: (A) A copy of the notice of the availability of foreclosure mediation, in such form as the Chief Court Administrator prescribes, and (B) a foreclosure mediation request form, in such form as the Chief Court Administrator prescribes.

(2) Except as provided in subdivision (3) of this subsection, a mortgagor may request foreclosure mediation by submitting the foreclosure mediation request form to the court and filing an appearance not more than fifteen days after the return date for the foreclosure action. Upon receipt of the foreclosure mediation request form, the court shall notify each appearing party that a foreclosure mediation request form has been submitted by the mortgagor.

(3) The court may grant a mortgagor permission to submit a foreclosure mediation request form and file an appearance after the fifteen-day period established in subdivision (2) of this subsection, for good cause shown, except that no foreclosure mediation request form may be submitted and no appearance may be filed more than twenty-five days after the return date.

(4) No foreclosure mediation request form may be submitted to the court under this subsection on or after July 1, 2012.

(5) If at any time on or after July 1, 2008, but prior to July 1, 2012, the court determines that the notice requirement of subdivision (1) of this subsection has not been met, the court may, upon its own motion or upon the written motion of the mortgagor, issue an order that no judgment may enter for fifteen days during which period the mortgagor may submit a foreclosure mediation request form to the court.

(6) Notwithstanding any provision of the general statutes or any rule of law to the contrary, prior to July 1, 2012, no judgment of strict foreclosure nor any judgment ordering a foreclosure sale shall be entered in any action subject to the provisions of this subsection and instituted by the mortgagee to foreclose a mortgage on residential real property unless: (A) Notice to the mortgagor has been given by the mortgagee in accordance with subdivision (1) of this subsection and the time for submitting a foreclosure mediation request form has expired and no foreclosure mediation request form has been submitted, or if such notice has not been given, the time for submitting a foreclosure mediation request form pursuant to subdivision (2) or (3) of this subsection has expired and no foreclosure mediation request form has been submitted, or (B) the mediation period set forth in subdivision (b) of section 49-31n has expired or has otherwise terminated, whichever is earlier.

(7) None of the mortgagor’s or mortgagee’s rights in the foreclosure action shall be waived by the mortgagor’s submission of a foreclosure mediation request form to the court.

(c) (1) Prior to July 1, 2014, when a mortgagee commences an action for the foreclosure of a mortgage on residential real property with a return date on or after July 1, 2009, or, with respect to real property owned by a religious organization, a return date on or after October 1, 2011, the mortgagee shall give notice to the mortgagor of the foreclosure mediation program established in section 49-31m by attaching to the front of the writ, summons and complaint that is served on the mortgagor: (A) A copy of the notice of foreclosure mediation, in such form as the Chief Court Administrator prescribes, (B) a copy of the foreclosure mediation certificate form described in subdivision (3) of this subsection, in such form as the Chief Court Administrator prescribes, (C) a blank appearance form, in such form as the Chief Court Administrator prescribes, and (D) with respect to an action for the foreclosure of a mortgage on residential real property with a return date on or after October 1, 2011, a mediation information form and a notice containing contact information for authority-approved consumer credit counseling agencies, which form and notice shall be in such form as the Chief Court Administrator prescribes. Such mediation information form shall be designed to elicit current financial information and such other nonfinancial information from the mortgagor as the Chief Court Administrator, in consultation with representatives from the banking industry and consumer advocates, determines will be useful to the mediation process. The instructions to the mediation information form shall explain that the completed mediation information form, along with accompanying documentation reasonably requested from the mortgagor by way of such instructions, shall be delivered to the mortgagee’s counsel not later than fifteen business days prior to the date of the initial mediation session, as identified in the notice provided pursuant to subdivision (2) of subsection (c) of section 49-31n.

(2) The court shall issue a notice of foreclosure mediation described in subdivision (3) of this subsection to the mortgagor not later than the date three business days after the date the mortgagee returns the writ to the court.

(3) The notice of foreclosure mediation shall instruct the mortgagor to file the appearance and foreclosure mediation certificate forms with the court not later than the date fifteen days from the return date for the foreclosure action. Such notice shall remind the mortgagor to deliver the completed mediation information form and the accompanying documentation described in subdivision (1) of this subsection and encourage such delivery in advance of the required date. The mediation information form and accompanying documentation shall not, without the explicit written instruction of the mortgagor, be publicly available. Such notice shall be accompanied by materials from the Department of Banking, as prescribed by the Chief Court Administrator, which shall describe the community-based resources available to the mortgagor, including authority-approved housing counseling agencies that may assist with preparation of the mediation information form and application for mortgage assistance programs. The foreclosure mediation certificate form shall require the mortgagor to provide sufficient information to permit the court to confirm that the defendant in the foreclosure action is a mortgagor, and to certify that said mortgagor has sent a copy of the mediation certificate form to the plaintiff in the action.

(4) Upon receipt of the mortgagor’s appearance and foreclosure mediation certificate forms, and provided the court confirms the defendant in the foreclosure action is a mortgagor and that said mortgagor has sent a copy of the mediation certificate form to the plaintiff, the court shall schedule a date for foreclosure mediation in accordance with subsection (c) of section 49-31n. The court shall issue notice of such mediation date to all appearing parties not earlier than the date five business days after the return date or by the date three business days after the date on which the court receives the mortgagor’s appearance and foreclosure mediation certificate forms, whichever is later, except that if the court does not receive the appearance and foreclosure mediation certificate forms from the mortgagor by the date fifteen days after the return date for the foreclosure action, the court shall not schedule such mediation.

(5) Notwithstanding the provisions of this subsection, the court may refer a foreclosure action brought by a mortgagee to the foreclosure mediation program at any time, provided the mortgagor has filed an appearance in said action and further provided the court shall, not later than the date three business days after the date on which it makes such referral, send a notice to each appearing party scheduling the first foreclosure mediation session for a date not later than the date thirty-five days from the date of such referral.

(6) Notwithstanding any provision of the general statutes or any rule of law, prior to July 1, 2014, (A) for the period of time which shall not exceed eight months from the return date, no mortgagee or mortgagor shall make any motion, request or demand with respect to the other, except those motions, requests or demands that relate to the mediation program described in section 49-31m and the mediation sessions held pursuant to such program, provided (i) a mortgagor seeking to contest the court’s jurisdiction may file a motion to dismiss and the mortgagee may object to such motion to dismiss in accordance with applicable law and the rules of the courts, and (ii) if the mortgagor elects to make any other motion, request or demand with respect to the mortgagee, the eight-month limit shall no longer apply to either party; and (B) no judgment of strict foreclosure nor any judgment ordering a foreclosure sale shall be entered in any action subject to the provisions of this subsection and instituted by the mortgagee to foreclose a mortgage on residential real property or real property owned by a religious organization unless: (i) The mediation period set forth in subsection (c) of section 49-31n has expired or has otherwise terminated, whichever is earlier, and, if fewer than eight months has elapsed from the return date at the time of termination, fifteen days have elapsed since such termination, or (ii) the mediation program is not otherwise required or available. Nothing in this subdivision shall affect any motion made or any default or judgment entered on or before June 30, 2011.

(7) With respect to foreclosure actions with a return date on or after July 1, 2011, notwithstanding any provision of the general statutes or any rule of law to the contrary, the mortgagee shall be permitted, on or before July 1, 2014, and following the eight-month or fifteen-day period described in subdivision (6) of this subsection, to simultaneously file, as applicable, (A) a motion for default, and (B) a motion for judgment of strict foreclosure or a motion for judgment of foreclosure by sale with respect to the mortgagor in the foreclosure action.

(8) None of the mortgagor’s or mortgagee’s rights in the foreclosure action shall be waived by participation in the foreclosure mediation program.

(P.A. 08-176, S. 16; P.A. 09-209, S. 34; Sept. Sp. Sess. P.A. 09-7, S. 95; P.A. 10-181, S. 1; P.A. 11-51, S. 31; 11-201, S. 2.)

History: P.A. 08-176 effective July 1, 2008; P.A. 09-209 added new Subsec. (a) which divided foreclosure mediation program into provisions applicable to foreclosures of certain mortgages with a return date from July 1, 2008, to June 30, 2009, and provisions applicable to foreclosures of certain mortgages with a return date from July 1, 2009, to June 30, 2010, redesignated existing Subsecs. (a) to (e) as Subsecs. (b)(1) to (b)(7), added new Subsec. (c) and made conforming changes, effective July 1, 2009; Sept. Sp. Sess. P.A. 09-7 amended Subsec. (c)(2) by changing “not later than three days after the mortgagee” to “not later than the date three business days after the date the mortgagee”, amended Subsec. (c)(4) by adding “or by the date three business days after the date on which the court receives the mortgagor’s appearance and foreclosure mediation certificate forms, whichever is later, except that if”, and amended Subsec. (c)(5) by adding scheduling and notice requirements for first foreclosure mediation session when court makes referral, effective October 5, 2009; P.A. 10-181 extended termination date of foreclosure mediation program to July 1, 2012, and made a technical change in Subsec. (c)(6), effective June 9, 2010; P.A. 11-51 substituted “2014” for “2012” in Subsecs. (a) and (c), inserted “under this subsection” in Subsec. (b)(4), and made technical changes, effective July 1, 2011; P.A. 11-201 extended termination date of foreclosure mediation program to July 1, 2014, added provisions re actions for foreclosure of a mortgage on real property owned by a religious organization, made technical changes, added Subsec. (c)(1)(D) requiring mortgagee to attach a mediation information form and notice containing contact information for authority-approved consumer credit counseling agencies to the writ, summons and complaint and setting forth purpose of information form and requirements re instructions, amended Subsec. (c)(3) to require that notice remind mortgagor to deliver completed mediation information form and accompanying documentation in advance of required date and include materials from Department of Banking describing available community-based resources, amended Subsec. (c)(5) to extend from 15 business days to 35 days from date of referral the deadline for holding the first mediation session, amended Subsec. (c)(6) to add provisions re stay of litigation for 8 months from return date while the mediation period is ongoing, and to prohibit judgment from entering unless mediation period has expired or terminated and, if fewer than 8 months has elapsed from return date, 15 days have elapsed since termination, added Subsec. (c)(7) permitting mortgagee, following 8-month stay, to simultaneously file a motion for default and a motion for judgment of strict foreclosure or for judgment of foreclosure by sale, and redesignated existing Subsec. (c)(7) as Subsec. (c)(8), effective July 1, 2011.

Sec. 49-31m. Foreclosure mediation program. The Chief Court Administrator shall establish in each judicial district a foreclosure mediation program in actions to foreclose mortgages on residential real property or real property owned by a religious organization. Such foreclosure mediation shall (1) address all issues of foreclosure, including, but not limited to, reinstatement of the mortgage, assignment of law days, assignment of sale date, restructuring of the mortgage debt and foreclosure by decree of sale, and (2) be conducted by foreclosure mediators who (A) are employed by the Judicial Branch, (B) are trained in mediation and all relevant aspects of the law, as determined by the Chief Court Administrator, (C) have knowledge of the community-based resources that are available in the judicial district in which they serve, and (D) have knowledge of the mortgage assistance programs. Such mediators may refer mortgagors who participate in the foreclosure mediation program to community-based resources when appropriate and to the mortgage assistance programs.

(P.A. 08-176, S. 17; P.A. 11-201, S. 3.)

History: P.A. 08-176 effective June 12, 2008; P.A. 11-201 deleted program establishment date of July 1, 2008, and added reference to real property owned by a religious organization.

Sec. 49-31n. Mediation period. Information required. Termination of program. (a) Prior to July 1, 2014: (1) Any action for the foreclosure of a mortgage on residential real property with a return date during the period from July 1, 2008, to June 30, 2009, inclusive, shall be subject to the provisions of subsection (b) of this section, and (2) any action for the foreclosure of a mortgage on (A) residential real property with a return date during the period from July 1, 2009, to June 30, 2014, inclusive, or (B) real property owned by a religious organization with a return date during the period from October 1, 2011, to June 30, 2014, inclusive, shall be subject to the provisions of subsection (c) of this section.

(b) (1) For any action for the foreclosure of a mortgage on residential real property with a return date during the period from July 1, 2008, to June 30, 2009, inclusive, the mediation period under the foreclosure mediation program established in section 49-31m shall commence when the court sends notice to each appearing party that a foreclosure mediation request form has been submitted by a mortgagor to the court, which notice shall be sent not later than three business days after the court receives a completed foreclosure mediation request form. The mediation period shall conclude not more than sixty days after the return date for the foreclosure action, except that the court may, in its discretion, for good cause shown, (A) extend, by not more than thirty days, or shorten the mediation period on its own motion or upon motion of any party, or (B) extend by not more than thirty days the mediation period upon written request of the mediator.

(2) The first mediation session shall be held not later than fifteen business days after the court sends notice to all parties that a foreclosure mediation request form has been submitted to the court. The mortgagor and mortgagee shall appear in person at each mediation session and shall have authority to agree to a proposed settlement, except that (A) if the mortgagee is represented by counsel, the mortgagee’s counsel may appear in lieu of the mortgagee to represent the mortgagee’s interests at the mediation, provided such counsel has the authority to agree to a proposed settlement and the mortgagee is available (i) during the mediation session by telephone, and (ii) to participate in the mediation session by speakerphone, provided an opportunity is afforded for confidential discussions between the mortgagee and mortgagee’s counsel, and (B) following the initial mediation session, if there are two or more mortgagors, only one mortgagor shall appear in person at each subsequent mediation session unless good cause is shown, provided the other mortgagors are available (i) during the mediation session, and (ii) to participate in the mediation session by speakerphone, provided an opportunity is afforded for confidential discussions among the mortgagors and such mortgagors’ counsel. The court shall not award attorney’s fees to any mortgagee for time spent in any mediation session if the court finds that such mortgagee has failed to comply with this subdivision, unless the court finds reasonable cause for such failure.

(3) Not later than two days after the conclusion of the first mediation session, the mediator shall determine whether the parties will benefit from further mediation. The mediator shall file with the court a report setting forth such determination and mail a copy of such report to each appearing party. If the mediator reports to the court that the parties will not benefit from further mediation, the mediation period shall terminate automatically. If the mediator reports to the court after the first mediation session that the parties may benefit from further mediation, the mediation period shall continue.

(4) If the mediator has submitted a report to the court that the parties may benefit from further mediation pursuant to subdivision (3) of this subsection, not more than two days after the conclusion of the mediation, but not later than the termination of the mediation period set forth in subdivision (1) of this subsection, the mediator shall file a report with the court describing the proceedings and specifying the issues resolved, if any, and any issues not resolved pursuant to the mediation. The filing of the report shall terminate the mediation period automatically. If certain issues have not been resolved pursuant to the mediation, the mediator may refer the mortgagor to any appropriate community-based services that are available in the judicial district, but any such referral shall not cause a delay in the mediation process.

(5) The Chief Court Administrator shall establish policies and procedures to implement this subsection. Such policies and procedures shall, at a minimum, provide that the mediator shall advise the mortgagor at the first mediation session required by subdivision (2) of this subsection that: (A) Such mediation does not suspend the mortgagor’s obligation to respond to the foreclosure action; and (B) a judgment of strict foreclosure or foreclosure by sale may cause the mortgagor to lose the residential real property to foreclosure.

(6) In no event shall any determination issued by a mediator under this program form the basis of an appeal of any foreclosure judgment.

(7) Foreclosure mediation request forms shall not be accepted by the court under this subsection on or after July 1, 2012, and the foreclosure mediation program shall terminate when all mediation has concluded with respect to any applications submitted to the court prior to July 1, 2014.

(8) At any time during the mediation period, the mediator may refer a mortgagor who is the owner-occupant of one-to-four family residential real property to the mortgage assistance programs, except that any such referral shall not prevent a mortgagee from proceeding to judgment when the conditions specified in subdivision (6) of subsection (b) of section 49-31l have been satisfied.

(c) (1) For any action for the foreclosure of a mortgage on residential real property with a return date during the period from July 1, 2009, to June 30, 2014, inclusive, or for any action for the foreclosure of a mortgage on real property owned by a religious organization with a return date during the period from October 1, 2011, to June 30, 2014, inclusive, the mediation period under the foreclosure mediation program established in section 49-31m shall commence when the court sends notice to each appearing party scheduling the first foreclosure mediation session. The mediation period shall conclude not later than the date sixty days after the return date for the foreclosure action, except that the court may, in its discretion, for good cause shown, (A) extend, by not more than thirty days, or shorten the mediation period on its own motion or upon motion of any party, or (B) extend by not more than thirty days the mediation period upon written request of the mediator.

(2) The first mediation session shall be held not later than fifteen business days after the court sends notice to each appearing party in accordance with subdivision (4) of subsection (c) of section 49-31l. On and after October 1, 2011, the first mediation session shall be held not later than thirty-five days after the court sends notice to each appearing party in accordance with subdivision (4) of subsection (c) of this section. On and after October 1, 2011, not later than fifteen business days prior to the date of the initial mediation session, the mortgagee shall deliver to the mortgagor (A) an account history identifying all credits and debits assessed to the loan account in the immediately preceding twelve-month period, and (B) the name, business mailing address, electronic mail address, facsimile number and direct telephone number of an individual able to process requests to refinance or modify the mortgage loan at issue or otherwise take action to avoid foreclosure of the mortgage. Any updates to the information provided pursuant to subparagraph (B) of this subdivision shall be provided reasonably promptly to the mortgagor and such mortgagor’s counsel. The mortgagor and mortgagee shall appear in person at each mediation session and shall have authority to agree to a proposed settlement, except that (i) if the mortgagee is represented by counsel, the mortgagee’s counsel may appear in lieu of the mortgagee to represent the mortgagee’s interests at the mediation, provided such counsel has the authority to agree to a proposed settlement and the mortgagee is available (I) during the mediation session by telephone, and (II) to participate in the mediation session by speakerphone, provided an opportunity is afforded for confidential discussions between the mortgagee and mortgagee’s counsel, and (ii) following the initial mediation session, if there are two or more mortgagors, only one mortgagor shall appear in person at each subsequent mediation session unless good cause is shown, provided the other mortgagors are available (I) during the mediation session, and (II) to participate in the mediation session by speakerphone, provided an opportunity is afforded for confidential discussions among the mortgagors and such mortgagors’ counsel. The court shall not award attorney’s fees to any mortgagee for time spent in any mediation session if the court finds that such mortgagee has failed to comply with this subdivision, unless the court finds reasonable cause for such failure.

(3) Not later than two days after the conclusion of the first mediation session, the mediator shall determine whether the parties will benefit from further mediation. The mediator shall file with the court a report setting forth such determination and mail a copy of such report to each appearing party. If the mediator reports to the court that the parties will not benefit from further mediation, the mediation period shall terminate automatically. If the mediator reports to the court after the first mediation session that the parties may benefit from further mediation, the mediation period shall continue. Either party’s failure to comply with the documentation requirements of this section or section 49-31l shall not be grounds for terminating the mediation period before a second mediation session is conducted.

(4) If the mediator has submitted a report to the court that the parties may benefit from further mediation pursuant to subdivision (3) of this subsection, not more than two days after the conclusion of the mediation, but not later than the termination of the mediation period set forth in subdivision (1) of this subsection, the mediator shall file a report with the court describing the proceedings and specifying the issues resolved, if any, and any issues not resolved pursuant to the mediation. The filing of the report shall terminate the mediation period automatically. If certain issues have not been resolved pursuant to the mediation, the mediator may refer the mortgagor to any appropriate community-based services that are available in the judicial district, but any such referral shall not cause a delay in the mediation process.

(5) The Chief Court Administrator shall establish policies and procedures to implement this subsection. Such policies and procedures shall, at a minimum, provide that the mediator shall advise the mortgagor at the first mediation session required by subdivision (2) of this subsection that: (A) Such mediation does not suspend the mortgagor’s obligation to respond to the foreclosure action beyond the limited time frame described in subdivision (6) of subsection (c) of section 49-31l; and (B) a judgment of strict foreclosure or foreclosure by sale may cause the mortgagor to lose the residential real property or real property owned by a religious organization to foreclosure.

(6) In no event shall any determination issued by a mediator under this program form the basis of an appeal of any foreclosure judgment.

(7) The foreclosure mediation program shall terminate when all mediation has concluded with respect to any foreclosure action with a return date during the period from July 1, 2009, to June 30, 2014, inclusive.

(8) At any time during the mediation period, the mediator may refer a mortgagor who is the owner-occupant of one-to-four family residential real property to the mortgage assistance programs, except that any such referral shall not prevent a mortgagee from proceeding to judgment when the conditions specified in subdivision (6) of subsection (c) of section 49-31l have been satisfied.

(P.A. 08-176, S. 18; Nov. 24 Sp. Sess. P.A. 08-2, S. 8; P.A. 09-209, S. 35; P.A. 10-181, S. 2; P.A. 11-51, S. 32; 11-201, S. 4.)

History: P.A. 08-176 effective July 1, 2008; Nov. 24 Sp. Sess. P.A. 08-2 amended Subsec. (a) to designate existing provision re extension of mediation period as Subdiv. (1), increase extension period therein from ten to thirty days, add Subdiv. (2) re extension of mediation period by not more than thirty days upon written request of the mediator and make technical changes, and amended Subsec. (b) to extend deadline for first mediation session from ten to fifteen business days after court notice, effective November 25, 2008; P.A. 09-209 added new Subsec. (a) re applicable foreclosure mediation period for foreclosures of certain mortgages with a return date from July 1, 2008, to June 30, 2009, and from July 1, 2009, to June 30, 2010, redesignated existing Subsecs. (a) to (h) as Subsecs. (b)(1) to (b)(8), added provision re award of attorney’s fees in redesignated Subsec. (b)(2), deleted provision re rules of court in redesignated Subsec. (b)(5), added new Subsec. (c) and made conforming changes, effective July 1, 2009; P.A. 10-181 extended termination date of foreclosure mediation program to July 1, 2012, and amended Subsecs. (b)(2) and (c)(2) by eliminating option of mortgagee being available during mediation session by electronic means and making a technical change, effective June 9, 2010; P.A. 11-51 substituted “2014” for “2012” in Subsecs. (a), (b)(7) and (c)(1) and (7), inserted “under this subsection” in Subsec. (b)(7), and made technical changes, effective July 1, 2011; P.A. 11-201 extended termination date of foreclosure mediation program to July 1, 2014, added provisions re actions for foreclosure of a mortgage on real property owned by a religious organization, amended Subsecs. (b)(2) and (c)(2) to require mortgagee to be available to participate by speakerphone, provided opportunity is afforded for confidential discussions between mortgagee and mortgagee’s counsel and, following initial mediation session, if there are two or more mortgagors, to require only one mortgagor to appear in person at each subsequent session, provided other mortgagors are available during session and to participate by speakerphone and opportunity is afforded for confidential discussions among mortgagors and mortgagors’ counsel, amended Subsecs. (b)(8) and (c)(8) to provide that mediator may refer mortgagor who is owner-occupant of one-to-four family residential real property to mortgage assistance programs, amended Subsec. (c)(2) to require first mediation session to be held not later than 35 days after court sends notice and the delivery to mortgagor of mortgagee’s account history, contact information of individual able to process refinance or modification requests and reasonably prompt updates to information provided, amended Subsec. (c)(3) to add provision re failure to comply with documentation requirements not to be grounds for termination of mediation period before a second mediation is conducted, and amended Subsec. (c)(5) to include reference to limited time frame described in Sec. 49-31l(c)(6), effective July 1, 2011.

Sec. 49-31o. Consent of mortgagee required for changes. Disclosure of information submitted to mediator. (a) Nothing in sections 49-31k to 49-31n, inclusive, shall require a mortgagee to modify a mortgage or change the terms of payment of a mortgage without its consent.

(b) Information submitted by the mortgagor to a mediator, either orally or in writing, including financial documents, shall not be subject to disclosure by the Judicial Branch.

(P.A. 08-176, S. 19; P.A. 09-209, S. 36.)

History: P.A. 08-176 effective July 1, 2008; P.A. 09-209 designated existing provisions as Subsec. (a) and added Subsec. (b) re information submitted by mortgagor to a mediator, effective July 1, 2009.

Sec. 49-31p. Successor in interest in foreclosed property secured by federally-related mortgage loan. Assumption of interest limited. Definitions. (a) In the case of any foreclosure on a federally-related mortgage loan or on any dwelling or residential real property that has a return date on or after July 13, 2011, but not later than December 31, 2017, any immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to (1) the provision, by such successor in interest, of a notice to vacate to any bona fide tenant not less than ninety days before the effective date of such notice; and (2) the rights of any bona fide tenant, as of the date absolute title vests in such successor in interest (A) under any bona fide lease entered into before such date to occupy the premises until the end of the remaining term of the lease, except that a successor in interest may terminate a lease effective on the date of sale of the unit to a purchaser who will occupy the unit as a primary residence, subject to the receipt by the tenant of the ninety-day notice under subdivision (1) of this subsection; or (B) without a lease or with a lease terminable at will under state law, subject to the receipt by the tenant of the ninety-day notice under subdivision (1) of this subsection, except that nothing under this section shall affect the requirements for termination of any federally subsidized or state-subsidized tenancy or of any state or local law that provides longer time periods or other additional protections for tenants.

(b) For purposes of this section, a lease or tenancy shall be considered bona fide only if (1) the mortgagor or the child, spouse, or parent of the mortgagor under the contract is not the tenant, (2) the lease or tenancy was the result of an arms-length transaction, and (3) the lease or tenancy requires the receipt of rent that is not substantially less than fair market rent for the property or the unit’s rent is reduced or subsidized due to a federal, state or local subsidy.

(c) For purposes of this section, the term “federally-related mortgage loan” has the same meaning as in 12 USC 2602(1), the Real Estate Settlement Procedures Act of 1974. For purposes of this section, the date of a notice of foreclosure shall be deemed to be the date on which complete title to a property is transferred to a successor entity or person as a result of an order of a court or pursuant to provisions in a mortgage, deed of trust or security deed.

(P.A. 11-201, S. 7.)

History: P.A. 11-201 effective July 13, 2011.

Sec. 49-31q. Successor in interest in foreclosed property. Termination of tenant lease and assumption of interest subject to tenant lease. (a) On or before December 31, 2017, in the case of an owner who is an immediate successor in interest pursuant to foreclosure during the term of a lease, vacating the property prior to sale shall not constitute other good cause for terminating the lease of a tenant who is a recipient of assistance under 42 USC 1437f(o), the federal Housing Choice Voucher Program, except that the owner may terminate the tenancy effective on the date of transfer of the unit to the owner if the owner (1) will occupy the unit as a primary residence, and (2) has provided the tenant a notice to vacate at least ninety days before the effective date of such notice.

(b) On or before December 31, 2017, in the case of any foreclosure on any federally-related mortgage loan, as that term is defined in 12 USC 2602(1), the Real Estate Settlement Procedures Act of 1974, or on any residential real property in which a recipient of assistance under 42 USC 1437(o), the federal Housing Choice Voucher Program, resides, the immediate successor in interest in such property pursuant to the foreclosure shall assume such interest subject to the lease between the prior owner and the tenant and to the housing assistance payments contract between the prior owner and the public housing agency for the occupied unit, except that this provision and the provisions related to foreclosure in subsection (a) of this section shall not affect any state or local law that provides longer time periods or other additional protections for tenants.

(P.A. 11-201, S. 8.)

History: P.A. 11-201 effective July 13, 2011.

Sec. 49-31r. Foreclosure mediation: Notice of community-based resources. (a) A mortgagee, as defined in section 49-8a, shall include the form promulgated by the Judicial Branch, in accordance with subdivision (3) of subsection (c) of section 49-31l, concerning notice of community-based resources to parties involved in foreclosure mediation with any notice to a mortgagor, as defined in said section 49-8a, of an intent to accelerate the mortgage loan.

(b) A municipality shall include such form with any statements sent to a homeowner regarding an arrearage owed by the homeowner for public sewer or water services or for property taxes.

(c) The Judicial Branch shall provide such form to parties involved in foreclosure mediation to public libraries, religious organizations and community-based programs throughout this state to ensure that such form is readily available to mortgagors.

(d) Such form shall include the following:

(1) A reference to CHFA/HUD-Approved Housing Counselors in lieu of a reference to CHFA-Approved Housing Counselors;

(2) A column in the approved housing counselor chart that includes the counties in which each housing counselor serves; and

(3) A notification to mortgagors who are currently parties to a foreclosure action that they should contact the Department of Banking’s foreclosure assistance hotline for assistance with time sensitive foreclosure concerns.

(June 12 Sp. Sess. P.A. 12-1, S. 129.)