For several years, observers in the real estate industry have predicted a wave of mortgage loan defaults in both the residential and commercial spaces. While the more dramatic of these fears have not yet been realized, that has not stopped the development and evolution of Connecticut law in this area. With pending legislative activity and active judicial dockets, there is little indication that this will likely change for the foreseeable future. While these trends would be significant anywhere, in a judicial foreclosure state where the length of the foreclosure process is already well above the national average, they are of particular note.

The Hartford Business Journal recently reported that Connecticut had the country’s second-highest housing unit foreclosure rate in March 2024. According to financial service reporting firm ATTOM, the number of commercial foreclosures in the state were up from 3 in March 2023 to 18 this March (a 500% increase), the ninth-highest rate in the nation for that time period. As a judicial foreclosure state and in an age of ever-increasing scrutiny on financial institutions and foreclosing lenders, perhaps it is not surprising that these market trends might coincide with an active legislative and judicial climate. Similarly, one may anticipate that it is probably inevitable that, with more foreclosure activity, there will likely be more legal developments.