CT Gen Stat § 8-256 (2020)
2020 Connecticut General Statutes|Title 8 - Zoning, Planning, Housing and Economic and Community Development|Chapter 134 - Connecticut Housing Finance Authority Act|Section 8-256 - Default by mortgagor and subsequent action.

 (a) In the event of default by the mortgagor, the mortgagee shall notify the authority both of the default and the mortgagee's proposed course of action. When it appears feasible, the authority may for a temporary period upon default or threatened default by the mortgagor authorize mortgage payments to be made by the authority to the mortgagee which payments shall be repaid under such conditions as the authority may prescribe. The authority may also agree to revised terms of financing when such appear prudent. The mortgagee shall be entitled to receive the benefits of the insurance provided herein upon: (1) Any sale of the mortgaged property by court order in foreclosure or a sale with the consent of the authority by the mortgagor or a subsequent owner of the property or by the mortgagee after foreclosure or acquisition by deed in lieu of foreclosure, provided all claims of the mortgagee against the mortgagor or others arising from the mortgage, foreclosure, or any deficiency judgment shall be assigned to the authority without recourse except such claims as may have been released with the consent of the authority; or (2) the expiration of six months after the mortgagee has taken title to the mortgaged property under judgment of strict foreclosure, foreclosure by sale or other judicial sale, or under a deed in lieu of foreclosure if during such period the mortgagee has made a bona fide attempt to sell the property, and thereafter conveys the property to the authority with an assignment, without recourse, to the authority of all claims of the mortgagee against the mortgagor or others arising out of the mortgage foreclosure, or deficiency judgment; or (3) the acceptance by the authority of title to the property or an assignment of the mortgage, without recourse, to the authority, in the event the authority determines it imprudent to proceed under (1) or (2) above. Upon the occurrence of either (1), (2) or (3) hereof, the obligation of the mortgagee to pay premium charges for insurance shall cease, and the authority shall, within thirty days thereafter, pay to the mortgagee ninety-eight per cent of the sum of (i) the then unpaid principal balance of the insured indebtedness, (ii) the unpaid interest to the date of conveyance or assignment to the authority, as the case may be, (iii) the amount of all payments made by the mortgagee for which it has not been reimbursed for taxes, insurance, assessments and mortgage insurance premiums, and (iv) such other necessary fees, costs or expenses of the mortgagee as may be approved by the authority.(b) Upon request of the mortgagee, the authority may at any time, under such terms and conditions as it may prescribe, consent to the release of the mortgagor from his liability or consent to the release of parts of the property from the lien of the mortgage, or approve a substitute mortgagor or sale of the property or part thereof.(c) No claim for the benefit of the insurance provided in this chapter shall be accepted by the authority except within one year after any sale or acquisition of title of the mortgaged premises described in subdivision (1) or (2) of subsection (a) of this section.(1969, P.A. 795, S. 15.)