The monthly statement and the reinstatement quote said two different things
A servicer told a borrower to pay $39,861.97 to bring his loan current. He paid it. The servicer sent the check back.
A Connecticut appeals court said the servicer was right to do so, in a ruling released October 27, 2026, that draws a sharp line between “bringing a loan current” and “reinstating after acceleration” - two concepts that sound alike but, legally, are not the same thing at all.
The dispute involved a $975,000 loan originally issued in 2005 by Washington Mutual Bank on a property in Westport, Connecticut. The borrower executed the promissory note; his wife granted the mortgage on the property to secure it. The loan changed hands over the years - from Washington Mutual to JPMorgan Chase, then through a series of trust assignments - before landing with U.S. Bank Trust, National Association, as owner trustee for VRMTG Asset Trust. Fay Servicing handled the servicing.
The borrowers fell behind on payments. The last accepted installment came in around October 2018. In January 2019, Fay sent default notices warning that $15,556.60 was needed by March 21, 2019, to cure the default, and that failing to pay could trigger acceleration of the full balance. The borrowers missed that deadline. The loan was accelerated.
That is where things got messy.
“Pay this amount to bring your loan current”
On April 29, 2019, the borrower called Fay to discuss the delinquency and ask about reinstatement. A Fay representative told him the account was in active foreclosure, that a payment plan was not an option, and that reinstatement would require paying all foreclosure fees and costs on top of the past-due amount. She offered to order a formal reinstatement quote. He agreed.
Then, on May 11, 2019, the borrower received Fay’s regular monthly mortgage statement. It listed the past-due amount as $39,861.97 and stated in bold: “You must pay this amount to bring your loan current.” A delinquency notice on the same document put the “amount needed to cure the delinquency” at $39,861.97. But the statement also included a line reading: “Please call us . . . to obtain the amount necessary to reinstate your loan.”
Two different numbers for two different things - on the same piece of paper.
“It’s not going to be that amount”
On May 30, 2019, the borrower called Fay again, asking whether he could use the statement to pay off his arrears. The representative was blunt: no. It was “just a standard billing statement” that did not include “any of the foreclosure fees and costs.” The representative promised to escalate the request for the reinstatement figure, but told the borrower plainly: “It’s not going to be that amount.”
Fay mailed a reinstatement letter dated June 3, 2019, setting the figure at $41,149.40 with a deadline of June 14, 2019. Fay also called the borrower on June 6. The call went unanswered and a voicemail was left. The borrower said he never received the letter.
He mailed a cashier’s check for $39,861.97 on June 7 anyway. Fay received it on June 12 and sent it back. Not enough.
The trial court sided with the borrower
The borrowers fought the foreclosure in Superior Court. The trial court sided with them in an August 2024 decision, finding that the May mortgage statement was an offer to bring the loan current, that the $39,861.97 payment was valid consideration, and that the loan had been reinstated. The trial court acknowledged the Fay representative had told the borrower the statement figure was not a reinstatement amount, but called the distinction “confusing to the general public, homeowners, consumers and even some members of the bar.”
In a February 2025 follow-up ruling on damages, the trial court ordered the borrowers to pay U.S. Bank $355,913.20 to bring the loan current, while crediting $47,920.95 in attorney’s fees to the borrowers.
The appeals court reversed
The Connecticut Appellate Court reversed. Writing for a unanimous panel, Judge Seeley found the trial court’s conclusions “clearly erroneous” on three grounds.
The evidence did not support a finding that both sides shared a “meeting of the minds.” The borrower had been told repeatedly - in the April 29 call, in the May 30 call, and in the stipulated facts both sides agreed to - that the monthly statement figure was not the reinstatement amount. No reasonable person in the borrower’s position, the court held, would have believed that paying the statement amount would reinstate an accelerated loan.
The alleged agreement also lacked consideration. The borrower’s promise to pay money he already owed under the note and mortgage could not support a new contract. Under Connecticut law, “a promise to do that which one is already bound by his contract to do is not sufficient consideration to support an additional promise by the other party.”
And the mortgage itself settled the matter. Section 19 laid out the conditions for reinstatement after acceleration: pay all sums due as if no acceleration had occurred, cure any other defaults, and pay all enforcement expenses - attorney’s fees, property inspection costs, and the rest. Paying the amount on a monthly statement did not come close.
The court also noted that even if the statement could somehow be read as an offer, the borrower missed its deadline. The statement set payment due on June 1, 2019. The check was not mailed until June 7. The borrower’s argument that the payment was timely because a late fee would not apply until June 16 was rejected, citing Sunset Mortgage v. Agolio - a grace period before a late fee does not extend the actual due date.
What happens next
The appellate court agreed that U.S. Bank had established a prima facie case for foreclosure - it owns the note and mortgage, the borrower defaulted, and conditions precedent were met. But the court declined to order the trial court to enter a foreclosure judgment directly. Because foreclosure is an equitable proceeding in Connecticut, the form and terms of any judgment remain within the trial court’s discretion. The case was remanded for further proceedings to determine the form of the foreclosure judgment, if any, and the amount of the debt.
For servicers and compliance teams, the ruling is a clean holding: a federally required monthly mortgage statement is not a reinstatement offer, even when it tells a borrower to “pay this amount to bring your loan current.” But the trial court’s observation - that the gap between “bringing a loan current” and “reinstating after acceleration” confuses everyone from homeowners to lawyers - is a flag that servicer communications on accelerated loans still carry real compliance risk.
The appellate decision is final as to the reinstatement question. The underlying foreclosure returns to the trial court for further proceedings.
