Foreclosures/Collections

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A previous blog post addressed lender liability for environmental conditions on property a lender might acquire as a result of foreclosure.  Another issue lenders in Connecticut must consider prior to foreclosing on a property is the Connecticut Transfer Act.  The Transfer Act requires transferors of “establishments” to make specific disclosures to transferees regarding the environmental condition of the property being transferred and also requires one party (usually either the transferor or transferee) to be a certifying party, i.e., the party responsible for all investigation and remediation of the property in accordance with Connecticut’s Remediation Standard Regulations (or “RSRs”).

An establishment includes properties where certain enumerated operations have occurred at any time since May 1, 1967:  dry cleaners, auto body repair, and furniture stripping; as well as any property where greater than 100 kg of hazardous waste was generated in any one month, on or after November 1, 1980; and/or where any hazardous waste, generated at a different location, was recycled, reclaimed, reused, stored, handled, treated, transported or disposed of.

Continue Reading Transfer Act for Lenders

In a win for secured creditors, the Ninth Circuit Court of Appeals recently held that a debtor who sought to cure a pre-petition default of its loan through its Chapter 11 plan must pay the default rate of interest set forth in the note. In Pacifica L 51 LLC v. New Investments Inc., the debtor proposed to pay the outstanding amount due under the note at the pre-default interest rate.  This proposal was in accordance with law in the Ninth Circuit, which held that even if a loan agreement provided for a higher post-default interest rate, a debtor who cured a default was entitled to repay at the lower, pre-default rate.

Continue Reading Ninth Circuit Holds Debtor Must Pay Default Interest Rate in Order to Cure Under Bankruptcy Plan

Readers may recall an earlier blog post regarding a bank’s potential liability for damage to private property caused by a tree falling onto a neighbor’s property.  In addition to property damage from obvious unsafe conditions, banks should also consider the potential liability associated with potential, unseen environmental conditions on property it has foreclosed upon.  Under Connecticut and federal law, landowners are typically responsible for the remediation of environmental contamination that exists on their property, regardless of who caused the contamination in the first instance.  However, there are exemptions that protect lenders from liability for environmental conditions so long as certain requirements are met. Continue Reading Protecting Lenders from Environmental Liability for Foreclosed Properties

For better or worse, banks frequently obtain possession of, or title to, pieces of property.  Often times, these parcels of land have been neglected and are in poor condition.  It would not be surprising to find a property that a bank obtained via foreclosure that had decaying trees looming over a neighbor’s fence.  But what happens when that tree falls, causing damage to the neighbor’s property?  Is the bank liable?  Continue Reading TIMBER! – Liability for damage to private property caused from a fallen tree?

Appellate Case Update

The Connecticut Appellate Court has (finally) recently weighed in on the topic of whether or not a claimed defense of a violation of the Connecticut Unfair Trade Practices Act (“CUTPA”) constitutes a legally sufficient special defense to a foreclosure action in Connecticut.  Put simply, the result of this case is that CUTPA is not a legally sufficient special defense to foreclosure.  In reaching this decision, the Court outlined that the intent of the Act is to permit claims for violation of its provisions and was not meant not to shield parties from liability on existing claims by opposing parties who are alleged to have violated its terms.

Continue Reading CT Unfair Trade Practices Act is Only a Sword – Not a Shield in Foreclosure Actions

On January 1, 2015, Connecticut adopted an additional method of foreclosure known as foreclosure by market sale.  This method permits an owner-occupant of a 1-4 family residential property who is in default of the first mortgage to obtain the lender’s consent to market and sell the property in order to avoid a judicial foreclosure.

Continue Reading Amendment to Connecticut’s Foreclosure By Market Sale Statute

One of the plethora of new procedures enacted in the 2016 General Assembly’s legislative session is a concept which is being dubbed a “judgment of loss mitigation.”  The procedure seems straightforward at first – a lender can seek to have the Court approve a modification of a mortgage loan and sanction the mortgagee’s priority over any other encumbrances of record or it can approve a conveyance of all interest of the mortgagor to the mortgagee within the new statutory structure.  So, why do lenders need to be aware of this new procedure?  And will this newly enacted process help anyone? Continue Reading Connecticut Foreclosures: Judgment of Loss Mitigation – Good, Bad or Unnecessary?

The United States Court of Appeals for the Second Circuit issued a decision today in the case of OneWest Bank, N.A. v. Robert W. Melina, No. 15-3063 (2d Cir. June 29, 2016) holding that a national bank is a citizen only of the state in which its main office is located, as stated in the bank’s articles of association.

Continue Reading U. S. Court of Appeals 2nd Circuit Decision: National Bank is a Citizen Only of the State in Which its Main Office is Located

The Connecticut Appellate Court has weighed in on the topic of whether or not a lender foreclosing a mortgage in Connecticut must comply with the statutory process to make the administrator of the decedent a party to the action to ensure a proper judgment of foreclosure enter…sort of.

Continue Reading Death of Defendant During Pendency of a Foreclosure Action – Connecticut Appellate Case Update

If you think getting a judgment is difficult, try collecting one….  There is definitely an “art” in collecting money.  Especially in Connecticut where there are specific procedures that a judgment creditor will have to take in order to enforce a money judgment against a debtor.  Following the steps will help, but being diligent, patient and creative also play a large part in securing monies owed.

Continue Reading The Art of Post-Judgment Collection in Connecticut