The Appellate Court attempted to resolve an issue that divided Superior Courts around the state. The issue was whether an assignee of a mortgage note could be liable for the assignor’s wrongful conduct. In opting for a bright line approach, the court has regrettably instructed lenders on how to avoid the consequences of wrongful conduct toward the mortgagor and even worse, burdened the wronged mortgagor with multiple lawsuits in order to obtain justice. Fortunately, the Connecticut Supreme Court has granted certiorari in the case.
The case involved a 12-unit rental property. The mortgagor obtained two mortgages from the Connecticut Development Corporation (CDC), which assigned both of them to a bank on the day of the closing. In addition to the mortgages, the CDC obtained two collateral assignments of leases and rentals that were also assigned to the bank on the day of the closing. CDC continued to act as the servicer in collecting the mortgage payments and administering the mortgage not very well as it turns out.
