Connecticut's strict foreclosure process has several distinctive characteristics that differ from foreclosure by sale. Which of the following is NOT a characteristic of Connecticut's strict foreclosure process?
Correct Answer
A) A public auction is conducted and sale proceeds are distributed to creditors in order of lien priority.
A public auction with distribution of proceeds to creditors in lien priority order is NOT a characteristic of Connecticut's strict foreclosure — it describes foreclosure by sale, which is used in most other states. Connecticut's strict foreclosure is specifically defined by the absence of a public auction. Instead, the court sets a law day, and if the mortgagor does not redeem by that date, title passes directly to the lender. This is the most important distinction between strict foreclosure and foreclosure by sale.
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Related Topics & Key Terms
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Related Concepts
RESPA is a federal law that requires lenders to provide borrowers with information about settlement costs, prohibits kickbacks and referral fees, and limits escrow account deposits. It applies to federally related mortgage loans.
The secondary mortgage market is where existing mortgage loans are bought and sold between lenders, investors, and government-sponsored enterprises (GSEs) like Fannie Mae, Freddie Mac, and Ginnie Mae.
TILA is a federal law that requires lenders to disclose the true cost of credit to borrowers, including the annual percentage rate (APR), total finance charges, and loan terms. It is implemented by Regulation Z.
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