What is a fair market value hearing?
A court hearing in a strict foreclosure where appraisers present evidence on a property's fair market value to determine whether a deficiency judgment can be entered against the borrower.
In a Connecticut strict foreclosure, a fair market value hearing occurs after the court grants a foreclosure judgment but before a deficiency judgment is issued. The purpose is straightforward: the court needs to know what the property is actually worth so it can decide whether the borrower owes additional money beyond what the property will bring at sale.
During this hearing, both the lender and the borrower (or their representatives) present expert appraisers who testify about the property's value. The appraisers may examine comparable sales, the property's condition, location, and market conditions in the Greater Hartford area. The judge listens to both sides and weighs the evidence to determine a fair market value figure.
This valuation matters significantly. If the court finds the property's fair market value is equal to or greater than the debt owed, no deficiency judgment can be entered. If the value is less than the outstanding loan balance, the court may enter a deficiency judgment allowing the lender to pursue collection for the shortfall. Borrowers facing strict foreclosure should understand that preparing for this hearing, including gathering appraisal evidence, is critical to limiting liability. An attorney experienced in real estate litigation can guide the homeowner through presenting a credible valuation case.