§ 49-30t — Judgment of loss mitigation following agreement under section 49-30q or 49-30r.

A mortgagee may file a motion for judgment of loss mitigation at any time after the fifteen days following the return date in a pending foreclosure action following execution of an agreement under section 49-30q or 49-30r. Nothing in this section shall be construed as allowing such a judgment to be entered by the court without the express written consent of both the mortgagor and mortgagee or requiring a mortgagee to consider consenting to such a judgment in foreclosure mediation. Failure of either party to consent to a judgment of loss mitigation for any reason shall not be a basis for a claim of bad faith. Upon motion of the mortgagee and with the consent of the mortgagor, the court, after notice and hearing, may render a judgment of loss mitigation approving the modification or conveyance. All parties to the action may participate in such a hearing. Such judgment shall be a final judgment for purposes of appeal. The only issues at such hearing shall be (1) a finding of the fair market value of the residential property, which may be determined by a written appraisal of the fair market value of the residential real property obtained by the mortgagee, to be performed by an appraiser licensed under chapter 400g, (2) to the extent necessary, a finding of the outstanding balance of any priority liens on such property to determine if the mortgagee's mortgage is an underwater mortgage, (3) the debt owed to the mortgagee that is secured by the mortgage, (4) whether the mortgage is an underwater mortgage, (5) whether the contemplated transaction was agreed to in good faith for the purposes of mitigation, and (6) whether the parties to the contemplated transaction other than the mortgagee meet the financial requirements of a mortgagor under sections 49-30p to 49-30w, inclusive, which shall be determined by a financial statement submitted by the proposed mortgagor or mortgagors, or such other financial information from the proposed mortgagor or mortgagors that the court requires. The court shall not enter a judgment of loss mitigation unless the court makes express findings that the mortgage is an underwater mortgage and that the good faith provisions of subdivision (5) and the provisions of subdivision (6) of this section have been satisfied. If the court renders a judgment of loss mitigation under this section, then immediately after the expiration of any applicable appeal period or after the disposition of an appeal that affirms the judgment, either, as applicable (A) the mortgage held by the mortgagee shall be increased as contemplated in such judgment and the lien of any junior lienholder who is a party to the action, or subject to the action by virtue of section 52-325, shall be deemed subordinated to such mortgage, in the same order as existed prior to the subordination, or (B) the conveyance to the mortgagee contemplated in the transfer agreement shall be effectuated, provided, in the event of an appeal, the mortgagor or the mortgagee may withdraw his or her consent to the foreclosure by loss mitigation at his or her sole discretion and the foreclosure of the mortgage may continue without any further restriction. Notwithstanding any provision of this section to the contrary, to the extent such conveyance is later set aside or avoided by application of any provision of Title 11 of the United States Code, the judgment of loss mitigation shall be set aside and all parties shall retain the same interests in the property as existed before the judgment of loss mitigation, to the extent permitted under applicable provisions of Title 11 of the United States Code. The mortgagor and mortgagee shall, not later than thirty days after the modification or conveyance, submit the judgment of loss mitigation to the town clerk for recording in accordance with title 7. Nothing contained in this section or section 49-30q or 49-30r shall be construed as prohibiting a consensual modification of a mortgage or a deed in lieu of foreclosure being consummated outside of the judicial process.

Legislative History

(P.A. 16-65, S. 77.)