Connecticut Administrative Code › Title 32 - Commerce and Economic and Community Development › 13 - Insuring of Industrial Mortgages › Section 32-13-19a - Procedure by mortgagee on default

Current through July 10, 2024
The mortgagee shall become eligible for the benefits of the insurance provided by chapter 579 of the general statutes, as amended, if such default continues for more than sixty days, or within such other time as may be agreed upon by the commission and mortgagee in writing:
(a) The mortgagee shall notify the commission of its opinion of the prudence of revising the terms of financing, and, if such revision appears to the commission to be prudent, appropriate papers satisfactory to the commission shall be drawn and executed by the mortgagor and mortgagee.
(b) If a revision of the terms of financing does not appear prudent to the commission, and it is deemed advisable by the mortgagee or commission to institute foreclosure proceedings, then the mortgagee shall institute such foreclosure action and either obtain possession of the mortgaged property and the income therefrom through the voluntary surrender thereof and of title thereto by the mortgagor, or prosecute to judgment, with reasonable diligence, such proceedings for the foreclosure of the mortgage, either strict or by sale, and if proper, obtain the appointment of a receiver to manage the mortgaged property and collect the income therefrom and proceed to exercise such other rights and remedies as may be available to it for the protection and preservation of the mortgaged property and to obtain the income therefrom under the mortgage and the laws of this state. Upon institution of foreclosure, the mortgagee shall furnish the commission with copies of the foreclosure complaint and all subsequent pleadings, including a copy of the appraisal report, and in the event of judgment in connection therewith, the mortgagee shall within thirty days after such judgment, file with the commission a certified copy of such judgment.
(c) If the mortgagee so acquires title to the mortgaged property, the mortgagee shall proceed to effect an orderly liquidation of the property within ninety days from such date of acquisition of title. If the property cannot be liquidated within such period at a price equal to or in excess of the total value of the mortgage as defined in section 32-17a of the 1969 supplement to the general statutes, any offer or offers shall be submitted to the commission, which shall, within thirty days of the receipt of the offer or offers, approve one thereof to whom the mortgagee shall then sell or the commission shall accept title as hereinafter provided for.
(d) In the event of foreclosure by sale and a deficiency judgment in connection therewith, the mortgagee shall within thirty days after such deficiency judgment, file with the commission a certified copy of deficiency judgment.
(e) If title to the property passes to the commission the mortgagee shall submit the following documents to the commission:
(1) A properly executed deed conveying a marketable title and containing covenants satisfactory to the commission;
(2) title evidence satisfactory to the commission and without expense to it, as of a date to include the recordation of the deed to the commission, which shall be in form satisfactory to the commission covering the period subsequent to the recording of the mortgage, or a satisfactory continuation of the title evidence accepted by the commission at the time the mortgage was insured, depending on the form of title evidence originally accepted by the commission;
(3) a bill of sale, covering any personal property or other security to which the mortgagee is entitled by reason of the mortgage transaction, conveying title to such property or other security satisfactory to the commission;
(4) an assignment of all claims of the mortgagee against the mortgagor or others arising out of the mortgage or the foreclosure, except such claims as may have been released with the consent of the commission.