§ 49-30u — Judgment of loss mitigation following agreement under section 49-30s.

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 an agreement under section 49-30s. 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 conveyance of the property to the third party on such terms as set forth in the transfer agreement between the mortgagor and mortgagee. 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, and (5) whether the contemplated transaction was agreed to in good faith for the purposes of mitigation. 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) of this section have been satisfied. If the court renders a judgment of loss mitigation under this section, then the conveyance to the third party shall be ordered to take place, 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. Such conveyance shall take place by the date set forth in the transfer agreement, which may be extended for up to sixty days upon agreement of the mortgagor and mortgagee or further by order of the court, after notice and hearing. The mortgagor shall, prior to the recording of the document conveying title to the property to the third party, submit the judgment of loss mitigation to the town clerk for recording in accordance with the provisions of title 7. After receipt of funds and other consideration by the mortgagee, as contemplated in the transfer agreement, the mortgagee shall file a satisfaction of judgment of loss mitigation with the court. Nothing contained in this section or section 49-30s shall be construed as prohibiting, outside of the judicial process, a consensual release of mortgage by a mortgagee for less than payment of the full indebtedness secured thereby.

Legislative History

(P.A. 16-65, S. 78.)