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Connecticut Foreclosured Listings – CT Bank–Owned Homes & Foreclosures
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The laws governing Connecticut foreclosures are found at CT Foreclosure Laws. Judicial foreclosures are covered under this statute; non-judicial foreclosures are not an option in Connecticut. The process normally takes 60 days (with the prime security instrument being a mortgage). In this state, there is no right of redemption and deficiency judgments are allowed.
The judicial foreclosure process in Connecticut is carried out by either strict foreclosure or a decree of sale.
With strict foreclosure, the lender goes to court to obtain a court order demonstrating the borrower is in default of the mortgage. If successful, the title transfers to the lender immediately. The court will set an amount of time in which the borrower may redeem the property. If they fail to do so, the title becomes absolute to the lender and the borrower no longer has any claim to the property. The lender then has thirty (30) days to record a certificate of foreclosure which must contain a description of the property, the foreclosure proceedings, the mortgage and the date the title became absolute.
With a decree of sale, a foreclosure sale takes place. The court: 1) establishes the time and manner of the sale; 2) appoints a committee to sell the property; and 3) appoints three appraisers to determine the value of the property. If the borrower pays the balance due on the mortgage prior to the sale, this may stop the proceedings. If no payment is made, the committee will go forward with the sale. If the home sells for less that what the lender was owed, the lender may sue to obtain a deficiency judgment.
Always seek the advice of proper legal counsel or an attorney familiar with Connecticut foreclosure laws. The information provided in this website is not legal advice.
Bank Owned, REO (Real Estate Owned), and foreclosure are terms commonly used to describe properties that are owned by a lender (financial institution; typically a bank), after an unsuccessful sale at a foreclosure auction. The lender will then resell the property by direct sale or market through a Realtor. Buyers often benefit by purchasing these properties as the lender's interest is to dispose the asset quickly and aggressively price them to reflect market conditions.
Purchase at Foreclosure Auction
Investing in foreclosures and distressed properties is only as successful as the information you have available to you. When a property is sold through a foreclosure auction, its owner usually owes more to the lender than the market value of the property itself. This is often a barrier to the sale of the property, and sometimes such foreclosure auctions do not draw any bidders. As a result, not many foreclosure auctions end with the sale of the property. The title reverts back to the financial institution holding the line. These properties are referred to as REO (Real Estate Owned) or Bank Owned properties.
Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, attorney's fees and costs associated with the foreclosure process. There are requirements to bid at a foreclosure auction and the auctioneer publishes that information. If you are a successful bidder, you receive a property in "as is/sbForeclosure.php" condition, (the former owner or tenant could be living at the property). There may also be other liens against the property. For most consumers, purchasing at a foreclosure auction is a "risky/sbForeclosure.php" undertaking and, in most cases, they will opt to purchase from the lender after the auction.
Bank Owned
After a bank (lender, financial institution) takes possession of a property (after an unsuccessful auction), they mitigate items owed by the prior borrower, such as homeowner association fees. The financial institution also tries to get the IRS to remove any tax liens against the property. The current owners are usually evicted and repairs made to any damage on the property in order and to make it more attractive to potential buyers and maximize the value.
Banks want to sell foreclosed property quickly because they don't want to tie up their money in capital reserves. Additionally, managing a foreclosed property is an expensive process and a "headache/sbForeclosure.php". Some banks have experience in managing REOs and foreclosures and often have a department dedicated to them. Most lenders list their properties with local real estate agents who are experienced in marketing and managing these assets.
Banks do not like disclosure statements but understand that they must conform to federal and state laws. They will always state that they have no knowledge of the property and can make no representations as they have never occupied the property. Most banks may or may not provide incentive financing on their REOs but in most cases, this would apply only to property that was in very bad condition. Financial institutions usually sell such properties "as-is/sbForeclosure.php"; however buyers still have the opportunity to negotiate home inspections if they find "unknown material defects/sbForeclosure.php".
If a buyer discovers issues that they did not anticipate, and which the institution will not repair, they can then cancel the transaction(given that the home inspection contingency was included as part of the offer to purchase contract). Institutions may agree to repairs but prefer to "discount/sbForeclosure.php" the property to a potential buyer and close quickly. Time is money to a lender. It is not in a buyer's best interest to attempt to renegotiate a contract over trivial items that were disclosed or obvious prior to negotiation of the contract.
Generally, negotiating with a lender, in most cases, is an easier process than negotiating with a homeowner. Lenders are typically unemotional about the process and are interested in making a "good business/sbForeclosure.php" decision for their stockholders.
A bank owned property isn't always the best value for a consumer. It's an old myth that "foreclosures/sbForeclosure.php" are a bargain.
Making an Offer
Before making an offer, have your agent contact the listing agent and ask typical questions you would ask of any seller and some additional ones such as:
- Are there any inspection reports?
- What work has the bank agreed to?
- Is there a special "as is/sbForeclosure.php" form?
- How long does it take the bank to accept an offer?
- How does your agent deliver the offer?
Offers are usually FAXED to the bank. The listing agent needs your originals. There is no formal presentation. Keep in mind: nothing happens evenings and weekends (banks are closed). The negotiating process can be very frustrating for buyers as the typical timelines do not apply.
Make sure that your offer contains your "credit/sbForeclosure.php" approval which demonstrates your qualifications as a buyer. They will be more motivated to negotiate with a qualified buyer. Understand that lenders will sell at "fair/sbForeclosure.php" market value and do not expect "fire-sales/sbForeclosure.php" that you have seen on television.