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.
Massachusetts bankruptcy courts have invalidated mortgages containing defects, including the failure of lenders to observe strict formalities in the execution of mortgage acknowledgements. Continue Reading The Massachusetts Supreme Judicial Court Lends a Helping Hand to Inadvertent Lender Omissions in the Execution of Mortgage Acknowledgements
In May, I posted about “Estate Planning in the Digital Age” and mentioned the practical limitations of shared passwords as a means of digital estate planning. Recent cases suggest that relying only on password sharing, even if it works, is risky, both for family members and fiduciaries. Here’s why.
A bank director’s responsibilities are similar to directors of other types of corporations, including the duties of loyalty and care. Federal banking regulators have strong enforcement powers to address violations of law, breaches of fiduciary duty, or unsafe and unsound practices. When an FDIC-insured bank goes into receivership, the FDIC undertakes an investigation to determine the reason for the failure and whether to pursue claims against directors, officer or their parties for corporate waste, breaches of fiduciary duty or negligence.
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.
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?
You might wonder whether lenders can enforce a guaranty of a loan from an individual or entity that has no formal connection with the borrower, i.e. someone who is not an owner or affiliated company. Generally, the answer is yes with some qualifications for potentially insolvent guarantors discussed below. However, lenders are well-advised to take the steps outlined at the end of this post to minimize the risk of a subsequent challenge by the guarantor.
As most people (at least in the banking world) know, a security interest is the granting of an interest in property to secure obligations, usually loan debt. If the borrower defaults under its obligations, the bank can foreclose and take the collateral.
In Connecticut, the General Statutes have granted “super” priority status to certain types of municipal liens. As a result, these liens jump to the head of the priority line, even if your bank has a first-mortgage on the property. These liens include costs for property taxes, water and sewer assessments, violations of blight ordinances and a municipality’s costs in demolishing unsafe buildings.