The answer to this question depends on whether your mortgage loan servicer is the owner of your note and mortgage or has been asked to foreclose on your home by the company that has the actual legal authority to foreclose. Some people suggest on the internet or elsewhere that banks can’t foreclose because they don’t have the “note.” Don’t misunderstand the status of Maine law. Many banks or loan servicers have the legal right to foreclose and yours may be one of them. If you are facing foreclosure, get help immediately to assess your options and your rights.
While many banks or loan servicers do have the legal right to foreclose, in some circumstances the record of ownership of the note and mortgage is unclear or the financial institution fails to produce the evidence necessary to prove the right to foreclose. In Maine, the answer to the above question depends on whether the bank or loan servicer does its homework and prepares its evidence to bring a proper case in court.
Fortunately, in Maine we have the right to demand that a bank or loan servicer prove its right to foreclose before a bank or loan servicer can take our homes away from us and evict us. A recent decision by the Maine Supreme Court tells the bank and loan servicers exactly what they must do to prove their foreclosure case. The Court provided a very clear road map in its decision called Bank of America v. Greenleaf. The Court stated that the bank must first show its right to foreclose and then further satisfy eight items the bank or loan servicer must prove before a foreclosure will be granted.
In order to show it is the lawful party to bring the foreclosure, the foreclosing party must show that that is has a legal interest in the “note.” The “note” is the legal obligation to repay the home loan. Second, the Court stated that the foreclosing party must also show that it is the owner of the mortgage. The Court in Greenleaf noted that there are many mortgages transferred from one bank or loan servicer to another using an electronic service called Mortgage Electronic Registration Services or “MERS.” Under some mortgages, MERS is identified as the “nominee” of the bank or loan servicer. The Court in Greenleaf found that the status of “nominee” is very limited. The Court found that as nominee, MERS could not transfer the mortgage from one bank or loan servicer to another without special proof of its power to make the transfer. Finally the Court found that without proper proof of ownership of the mortgage the bank could not foreclose on the Greenleaf home.
The Court also identified the eight requirements of foreclosure in Maine. Here are a number of the factors:
- 1. The existence of the mortgage and property description;
- 2. Proof of ownership of the note and evidence of the note and mortgage;
- Breach of a condition of the mortgage;
- Proof of the amount due under the loan;
- Priority of the interests of other parties that may have liens on the home;
- Service of a proper notice of default and right to cure the default;
- Completion of mediation through the Foreclosure Diversion Program; and
- A certificate verifying that the home owner is not actively deployed for military service.
- In order to really know whether the mortgage was properly transferred to your current loan servicer or bank, or whether the bank can prove the important foreclosure requirements, you should consult with an attorney for legal help. If you are facing foreclosure, call us. We will review your specific situation and try to help you understand your rights and responsibilities. Our initial half hour consult is free and we may be able to represent you on a reduced fee basis.