Implications for Mitchell Green
Green’s Connecticut home is underwater. With a mortgage balance of approximately $5 million and the $6.9 million Sire Spirits lien, the total encumbrances far exceed the property’s fair market value of $1 million. In practical terms, Green has no equity—meaning that any proceeds from a foreclosure sale would go to satisfy the liens in order of priority. Because Sire Spirits’ lien takes second position behind the mortgage, it stands to receive any residual funds after the mortgage is paid; however, experts estimate there will be nothing left for Sire Spirits once the mortgage is satisfied.
Still, foreclosure gives Sire Spirits the legal ability to eject Green and take possession. Under Conn. Gen. Stat. § 49-14, Sire Spirits may commence an action of strict foreclosure, which allows a lienholder to acquire title to a property if the debtor fails to pay off a debt secured by the property within a specified “redemption period.” In many Connecticut jurisdictions, this period can be as short as 30 days. Once the period expires, title vests in the lienholder as a matter of law unless the debtor pays in full.
