Historic Home On Main Street Still Stuck In Foreclosure Proceedings?

The vacant, deteriorating, Greek Revival-style home at 4 Main St. may stay vacant and deteriorating for a while longer, as an apparent procedural error in state court has resulted in a delay in foreclosure proceedings.

The case is headed to state appellate court, a July 22 court filing obtained by NewCanaanite shows. Last year, Frank Lieto, an attorney with Goldman Gruder and Woods, who is representing the homeowner, Dr. James Talbot, successfully argued in superior court that because a declaration of default had been entered by the court clerk two days prematurely – prior to the end of the mediation period – that the court’s subsequent actions to proceed with strict foreclosure were invalid and thus should be vacated.

Lieto is requesting that arguments in the foreclosure proceedings be re-heard. In essence, this action either partially or fully “resets” the foreclosure clock and, sans a buyer and agreement, will likely result in foreclosure proceedings being dragged out longer. Foreclosure proceedings for the property began in 2012.

“The fact that judgment entered two days prior to the default entering is procedurally impossible,” Lieto said during a hearing in September 2015, court transcripts show. He explained that the default was entered by the court clerk on Jan. 27, 2014, but the court-set mediation period concluded on Jan. 29, 2014.

“And because of that inconsistency,” Lieto said, the court should not have proceeded with the subsequent foreclosure proceedings.

(A voice message for Lieto was not returned by press time.)

In essence, this one error had the effect of rendering moot all subsequent actions taken by the court, Lieto is arguing.

An earlier delay in the process was due to the homeowner deciding to try to sell the home via short sale, Lieto explained.

“There was a potential short sale in the process [in 2015], but it didn’t work out,” he said, adding that the court then moved to proceed with the foreclosure.

Built in 1780, the home is in the town’s historic district and is of historic importance.

In June, Janet Lindstrom, chairman of the Historic District Commission, which has been voluntarily maintaining the property through arrangement with the owner, said during a commission meeting that a builder was looking to acquire it.

But the court filing dated July 22 obtained by NewCanaanite indicates that Talbot and his attorney are proceeding ahead with the appeal.

During an earlier hearing, attorney John Ribas, with Hunt Leibert Jacobson, representing the mortgage lender, Bank of New York, said that because the property is located in a historic district, it is “only attractive to a certain kind of buyer,” which could make selling it via foreclosure sale more challenging.

It appears that Lieto’s discovery of the filing discrepancy has resulted in a precedent case for the court. The court filing dated July 22 states: “There are no other cases pending appeals in the Appellate Court or Supreme Court which as rise from substantially the same controversy. There are no other cases know to the defendants-appellants involving issues closely related to those in this appeal.”

In terms of foreclosure law, Connecticut is one of the “judicial” states, which means all foreclosure proceedings are handled by the courts (whereas in “non-judicial” states, some or all of the foreclosure process can be handled administratively outside of the court system).

Average foreclosure timelines in the “judicial” states are among the longest in the U.S., lasting, in extreme cases, up to five years or more.

Depending on the circumstances of a particular case, the judge presiding over a foreclosure proceeding in Connecticut has the option to grant either a “strict foreclosure” or a “foreclosure by sale.”

Whether the court orders a strict foreclosure or a foreclosure sale is determined by whether there is equity in the property. If the court determines that there is enough equity, the judge will order a foreclosure by sale.

A new law in Connecticut requires a 60-day demand letter be sent prior to the filing of the foreclosure action, after which time the foreclosure proceeding can commence, typically running three to four months through completion.

According to real estate site Zillow, the six bedroom, 5.5 bath, 6,911 square foot home last sold in June 1984 for $365,000. Zillow currently values it at about $1,557,382.

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