Clearing Title Issues in Connecticut Foreclosures

Part II: How Lenders Can Protect and Obtain Marketable Title Through the Foreclosure Process

April 27, 2026

When a bank, a mortgage company, or a private lender wants to foreclose real estate in Connecticut, one of the most critical—and often underestimated—steps is ensuring that title issues are properly cleared.  Depending on the severity of the issue, a title defect could delay a foreclosure case, cloud ownership, or even could prevent the resale of the property after the foreclosure is completed.

For lenders pursuing foreclosure, clearing title issues is essential to ensure that the property can later be sold at highest possible value.  This article is the second in a two part series to provide a general overview of common title issues in Connecticut, and the steps typically taken to cure them.  In this article, we discuss how to resolve a title issue, once identified, through both non-judicial and judicial means, as well as issues commonly addressed in each scenario.

Non-Judicial Resolution

Once a title issue is identified, the next step is determining whether it can be resolved without going to court.  A non‑judicial resolution simply means curing a title defect without filing a lawsuit.

Lenders should always explore non‑judicial options first. Whenever possible, this is the preferred approach because it is typically faster and less expensive than litigation.  An experienced Connecticut foreclosure attorney can evaluate the issue, determine whether a non‑judicial solution is available, and implement the most cost‑effective path to clearing title.  The appropriate solution will depend on the nature of the title defect, and the documents appearing in the land records.

Below are some of the most common ways to resolve title defects without court involvement:

Negotiation and Voluntary Releases

Many title issues can simply be resolved through direct negotiation.

For instance, usually for a modest fee, large banks and mortgage companies often have dedicated departments that will execute:

• Releases of satisfied mortgages, or
• Assignments correcting errors in the chain of title.

Similarly, an individual or small business may hold an old lien that was never released.  That party may be willing to execute a release in exchange for a negotiated settlement.  Resolving the issue this way is often far more efficient than filing a lawsuit.

Statutory Fixes and Affidavits of Facts

Connecticut law provides statutory tools that can cure certain title issues when properly followed.  For example, Conn. Gen. Stat. § 47-12a allows a party to record an affidavit of facts to clarify certain issues in the land records.  If the affidavit meets the statutory requirements, it carries a presumption of truth, and can effectively cure the title defect without court involvement.

Example:

A property is originally owned by a married couple as joint tenants with right of survivorship.  After one spouse passes away, the surviving spouse becomes the sole owner.  Years later, the property is sold, but the land records do not reflect the prior spouse’s death, creating a gap in the chain of title.

In this situation, the surviving spouse can sign a statutory affidavit confirming the death of the prior spouse, and attach a copy of the death certificate.  Once recorded, the affidavit fills the gap and clarifies ownership, helping to restore marketable title.

Lapse of Time

Some title defects resolve themselves over time under Connecticut law.  For example, judgment liens in Connecticut are generally valid for 20 years.  If a foreclosure title search shows a judgment lien that is about to expire, a lender may choose to delay filing the foreclosure action briefly so that the lien expires on its own.  This type of strategic timing can eliminate a title defect without incurring litigation costs.

As a first step, lenders and their counsel should always review the applicable statute of limitations or expiration period for any lien or encumbrance.  In some cases, a defect may no longer be enforceable, but it may still appear in the land records.  When that happens, it is important to determine whether additional action is needed to clear the record, such as recording an affidavit.

Errors and Omissions Agreements

Another effective non‑judicial option involves Errors and Omissions (E&O) agreements signed by borrowers at loan origination.  In an E&O agreement, the borrower typically agrees to sign additional documents, if needed, to correct mistakes in the loan or title paperwork.

If a title issue arises, the lender may be able to rely on this agreement to:

• Request corrective documents from the borrower
• Fix errors in recorded instruments
• Strengthen its position in settlement discussions in relation to the foreclosure

In some instances, this approach can resolve a title defect without the need for court involvement.

Why Non-Judicial Solutions Matter

Using non-judicial methods to clear title issues can save time, reduce costs, and keep a foreclosure case moving forward. When successful, these approaches help ensure the lender can ultimately sell the property with marketable title, without the delay and expense of litigation.

Judicial Resolution

If all reasonable, non‑judicial options have been explored, and a title issue cannot be cured, the next step is judicial resolution.  This means addressing the title defect either as part of the foreclosure lawsuit, or through a related court action.

In many cases, the affected party fails to appear, and the court resolves the issue through a default judgment.  Occasionally, however, a title dispute will become contested.  Whether contested or not, successfully clearing title through litigation requires careful planning and attention to a few key legal steps.

Below are the key considerations lenders should understand when a title issue must be resolved in court:

Choosing the Correct Legal Action & Venue

The first step is identifying the proper cause of action.  Some title problems are addressed through specific statutes, such as discharging an unreleased mortgage, or dissolving a mechanic’s lien. When a statute applies, it should be used.  In cases where no specific statute fits the situation, lenders can often rely on a quiet title action, and, in some instances, a request for declaratory relief.  Regardless of the cause of action used, counsel must ensure that the foreclosing lender has standing to bring the specific claim under the appropriate statute.

In addition, counsel must ensure that the case is brought in the correct venue.  All cases involving real estate must be filed in the judicial district where the property is located.  While venue errors can often be corrected, filing in the proper venue avoids unnecessary delays.

Identifying and Serving the Correct Parties

Every lawsuit requires the right party to be named as a defendant.  In a title action, the proper defendant is typically the person or entity who could sign a document to fix the issue (for example, a prior lender, lienholder, or heir).  This information is usually identified through the land records.

In addition to naming the correct defendant, proper service of process on that defendant is also essential.  Even if a default enters, the court may refuse to enter judgment unless service strictly complies with statutory requirements.  Extra care is often required when dealing with dissolved entities, heirs, unknown parties, or potentially deceased individuals.  Counsel should be prepared to show the diligent efforts made to locate and serve the defendant, as well as compliance with the correct method of service of process.  In some cases, service by publication may be necessary.

Notice Through the Land Records

When a title issue is being litigated, notice to the world matters.  In some cases, it is helpful to record a document in the land records before filing suit, such as an affidavit.  Recording documents in the land records can:

• Put third parties on notice of the issue, and
• Provide admissible evidence in the case to support the court’s judgment.

A crucial part of providing notice is also recording a lis pendens.  A lis pendens gives constructive notice that the property is subject to litigation, and helps ensure that any future buyers or lienholders are bound by the outcome of the case.

Obtaining Judgment: Procedure & Evidence

Once the case is filed with the Court, the case will proceed to judgment like any other civil action.  Procedure in the case will be governed by the Connecticut Practice Book.  Missing a deadline or procedural requirement could delay the case.  Careful compliance with filing rules, notice requirements, and timing is essential to keep the case moving.

Prior to obtaining judgment, even in default cases, courts will often require the plaintiff to make an evidentiary showing.  Depending on the claim, the plaintiff may need to prove its case by a preponderance of the evidence, or by the higher standard of clear and convincing evidence.  Common evidence includes:

• Certified land records documents
• Affidavits
• Testimony
• Supporting documents outside the land records

In addition, although not necessarily required, counsel may consider providing a concise legal brief, explaining the claim, burden of proof, and supporting evidence to the Court.  Such a brief can significantly streamline the court’s review.

Recording the Judgment to Clear Title

The final step is ensuring that the court’s judgment is properly recorded on the land records.  While the judgment resolves the dispute between the parties, recording a certified copy of the judgment or obtaining a certified judgment file will provide constructive notice to all future parties, and confirm that the title defect has been legally resolved.

Without this step, marketable title may still be questioned despite a successful court ruling.

Why Judicial Resolution Matters

When non-judicial options are not available, judicial resolution of a title issue provides a clear and enforceable path to marketable title.  Although litigation may take more time and expense, it allows lenders to fully resolve such defects, and deliver marketable title after the foreclosure.

Conclusion

For lenders, mortgage companies, and investors, the ability to identify and resolve title issues can mean the difference between a smooth foreclosure and a prolonged, costly one.  By securing an experienced Connecticut foreclosure attorney to conduct a thorough review, evaluate title insurance options, pursue non-judicial cures, and litigate where necessary, lenders can protect their interests and deliver marketable title upon completion of the foreclosure case.

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Our firm routinely assists banks, servicers, and private lenders with title clearance in foreclosure and post-foreclosure matters throughout Connecticut. Whether your issue involves a missing assignment, an unreleased lien, or a break in the chain of title, we can help identify the most efficient curative path.

For more information or to discuss a title issue affecting a Connecticut foreclosure, please contact: Joseph R. Dunaj at jdunaj@npmlaw.com.

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