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Connecticut Foreclosure Laws

Connecticut foreclosures must be carried out through judicial means. The process begins when the lender files a suit (known as a Lis Pendens) against the homeowner in court. Then a hearing is held, at which the homeowner, lender, and any Junior Lien holders may be present, to determine the amount owed, the market value of the property, and whether the type of foreclosure used should be a "strict foreclosure" or a "foreclosure-by-sale". If the market value is equal to or less than the amount of the mortgage loan provided, the court will allow a "strict foreclosure" to take place. If the market value exceeds the amount of the loan, a "foreclosure-by-sale" is ordered.

Strict foreclosures are based on the lawful fact that a property under mortgage is actually owned by the lender until the homeowner has made payments equal to the full amount of the loan. The court will allow a short period of time in which the homeowner may retain ownership by providing the full amount of their original loan to the lender. If they cannot do so, the Junior Lien holders can take control of the property by paying off the full amount of the loan. If neither party wishes to pay, the lender may repossess the property and do with it what they choose (sell it, auction it off, etc.). A strict foreclosure generally takes about five months from start to finish.

A foreclosure-by-sale follows the traditional method of foreclosure, in which the homeowner's property is auctioned off to retrieve the amount lost on the delinquent loan. In this case, the homeowner can stop the foreclosure at any point before the day of the sale by paying off the default amount owed to the lender.

Most Connecticut foreclosures sales take place on the site of the property in question, and on a Saturday anywhere from 60-90 days after the court's ruling. An public attorney auctions off the property to the highest bidder, who must then provide a ten percent deposit on their bid and arrange to pay off the rest of the bid within 30 days. A sale is subject to confirmation by the court, who will divide any excess proceeds among the Junior Lien holders. A confirmation hearing usually takes place within two weeks of the closing of the sale.

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