Foreclosure Information
Strict Foreclosure

Connecticut is one of the few states that still uses strict foreclosure. In strict foreclosure, there is not a foreclosure sale or auction.
The lender simply goes to court and obtains a court order showing that the borrower (you) is in default under the terms of the
mortgage. At that point, title shifts to the lender. However, you have a length of time set by the court to redeem the property. If you
fail to come up with the money during that time, then you are forever barred from asserting a claim to the property and title becomes
absolute to the lender. From that date, the lender has one month to record a certificate of foreclosure describing the premises, the
mortgage, the foreclosure proceedings, and the date title became absolute. If the lender demands possession in the foreclosure
suit, the court may order that you leave the premises. Possession may also be obtained by peaceable entry, unless the mortgage
says otherwise. The disadvantage to you is that the lender obtains title to land that might be worth much more than what was owed
on the original loan.

Decree of Sale

Upon motion by any party, a court may allow a mortgage to be foreclosed by a decree of sale. In a decree of sale, the court will
appoint a committee to sell the property. The court also sets the time and manner of the sale and appoints three appraisers. You
may stop the proceedings at any time by paying the balance due on the loan. If not paid, the committee will make the sale.
Afterwards, the sale will be ratified by the court which executes a deed to the purchaser. The grantee in the deed may obtain
possession of the property by court order. A supplemental judgment can direct the distribution of the proceeds of the sale. The
lender need only bring those proceeds to court which exceed the balance due on the loan, which included interests and costs.

Special Protections for Unemployed Borrowers

If a residential borrower has lived in the home as a principal residence for at least two years, and the borrower (1) has not had a
foreclosure action commenced against him or her in the past seven years, and (2) is unemployed or underemployed as defined by
law, then the borrower can claim protection from foreclosure under Connecticut statutes. Borrowers are underemployed or
unemployed under Connecticut law if the aggregate earned income of all the homeowners of the real property during the year
preceding the foreclosure was under $50,000 and less than 75 percent of the average aggregate annual income during the two
years prior to one year before foreclosure.

Eligibility

A court may decide that borrowers are eligible for special protection after considering two criteria: (1) the likelihood the borrower will
be able to make timely payments on a restructured mortgage by the time a restructuring period ends and the likelihood of a
substantial prejudice to a lender or a subordinate lien holder due to the restructuring of the mortgage debt.

Protection from Foreclosure

Under Connecticut law borrowers can get two forms of protection: foreclosure is stopped during the restructuring period. Which may
last up to six months, and borrowers can obtain court ordered restructuring of their mortgage so as to eliminate overdue payments.

Restructuring the Loan

The ceiling for restructured debt is either (1) the amount of the original debt or (2) 90 percent of the fair market value of the
property as determined by an appraiser at the time of the restructure. No additional debt may be restructured. Missed payments
can be added to the balance of the loan in a Connecticut restructure. However, the borrower must pay interest on the amount in
arrears that is added to the loan. Interest accrues on any sums added to the old mortgage debt at the end of the restructuring
period, which may be fixed or variable, depending on the original note. A composite rate must be used on fixed rate loans so that
the restructured debt must pay current interest rates which the main part of the loan continues at its original rate. Such composite
rates are not necessary for variable interest rate loans.

Deficiency Judgment

The strict foreclosure proceeding does not include an action against the borrower for payment, but the lender can sue the borrower
directly. In an independent action brought prior to or during the strict foreclosure proceeding. Once the borrower’s time limit to pay
the balance due on the loan expires, the lender obtains title to the property. If the property is worth more than the balance owed on
the loan, the lender cannot sue for a deficiency. Please note, the lender receives all the equity in the property without paying
anything in this situation. In proceedings to foreclosure by sale rather than by strict foreclosure, additional proceedings to collect a
debt from the borrower are stayed during the suit seeking a sale. If the proceeds of the sale exceed the appraised value of the
property, but are not enough to pay the lender’s past due loan balance, then a deficiency judgment may be rendered against the
borrower. If at the court-ordered sale, the property is sold for less than the appraised value, then no other proceedings to collect
the debt from the borrower may be undertaken until one-half the difference between the debt and the appraised value is subtracted
from what the borrower owes the lender.

Redemption

Redemption is determined by the court in strict foreclosure. Redemption by a junior lien holder is subject to any prior liens.
Connecticut allows foreclosure by two judicial methods, strict
foreclosure and decree of sale.
You Have Options!

For some owners in foreclosure, restructuring or even refinancing your loan may be a possibility, in these cases your
payments can be higher. For others in foreclosure, keeping your home, regrettably may not be a viable option. If you are
included in this group, Phoenix Solutions has purchase solutions available for you. Phoenix Solutions will help
minimize your stress, limit damage to your credit and possibly put money in your pocket. You can than move on with your
life and sooner rather than later enjoy the satisfaction of home ownership again.

Do not feel alone, there are many people in the same situation you may find yourself.

Honesty and integrity is what we live by. Although buying houses is our business, what we really do is provide people
with options and solutions.

You can trust we will attempt everything possible to help you through this very emotional and stressful period.

In order to provide you with as many options as possible, we have aligned ourselves with other professionals in the real
estate industry that share our ideals, the wish to help and desire to combine our resources.

Our primary marketing area is Windham, New London and Middlesex counties (Connecticut), But if you live outside
these counties please call or contact us as well.

In closing I ask you to call or email us today! Let's discuss your situation. Most of the time we can help reduce your
stress. There is no cost to you and you will likely find
we have options that work for you.
Phoenix Solutions, LLC