The Superior Court in Connecticut appoints a person, usually a local lawyer, to act as a foreclosure committee. This individual is responsible for announcing the sale and holding an auction on the property on a date set by the Court. The bid obtained from the highest bidder at the auction is then submitted to the court for approval. In a foreclosure by sale, the property is sold to the highest bidder at the time of the sale.In most cases, the lender will make a credit offer.
The lender can bid up to the full amount owed, including fees and costs, or it can bid less. Many properties in Connecticut are purchased at public foreclosure auctions, but competition can be strong and prices are higher than during the pre-foreclosure phase to cover the lender's legal costs. At this point, it is unlikely that the homeowner will be able to avoid foreclosure. By law, foreclosure auctions must be publicly announced and held on the date, time and place required by state law. To find these sales, you can read newspaper notices before the auction date, look for a public notice placed (when necessary) on the property, or search other public places in the county where the property is located.
Foreclosure auctions usually take place in courthouses, county clerk's offices, and even on property being auctioned.
Investing in ForeclosuresThe main bet for investors is that they are not always allowed to inspect the property before it is auctioned and must keep the property to the letter. For real estate investors, foreclosures often present good investment potential, as these properties are often sold below their market value. The lender can issue a judgment for default if a foreclosed property is sold at a public auction for less than the amount of the loan that guarantees the underlying mortgage. Foreclosures are mainly governed by state laws, although some federal laws limit what mortgage lenders can do during the foreclosure process.
Completing ForeclosureAfter all of the allotted legal days have elapsed, the lender files a foreclosure certificate in the property records, which serves as proof that the foreclosure has been completed and that the lender now owns the property.
Generally, servicers must provide borrowers with opportunities to mitigate losses, consider every step of foreclosure, and strictly comply with foreclosure laws. Strict foreclosure and sales foreclosure involve the same process until the date of sale is established, at which point they differ. Foreclosure by market sale is a hybrid process that combines elements of a short sale with a strict foreclosure process.
Deficiency JudgmentsConnecticut law allows lenders to seek deficiency judgments in both sales decree foreclosures and strict foreclosures. The amount of mortgage debt is usually calculated as being equal to the amount of the foreclosure judgment minus the sale price of the foreclosure.
In a foreclosure by sale, this repayment period is defined as being between when the foreclosure award by sale was issued and when it was sold.