The U.S. District Court for the State of Maine issued a decision this week that clarifies Maine homeowners' rights after consenting to a foreclosure judgment with a waiver of deficiency. In Kowalski v. Seterus, Inc., Judge Woodcock denied Seterus' Motion to Dismiss Kowalski's claims under the Fair Debt Collection Practices Act (FDCPA), the Maine Unfair Trade Practices Act (UTPA) and the Maine Consumer Credit Code (MCCC) for Seterus' ongoing attempts to collect on the mortgage after a stipulated foreclosure judgment had entered and after the redemption period had expired. The Judge explained that the relationship between Seterus and Kowalski changed once the stipulated judgment entered at which point "Mr. Kowalski's statutory rights to the Bryant Pond property were reduced to the right to redeem the mortgage under 14 M.R.S. 6322 within the 90-day redemption period." Further, the provisions in the Judgment that included a release of all personal liability on the Note and a waiver of any right to collect a deficiency caused Mr. Kowalski to no longer be indebted to the mortgagee (One West) on the loan. "Finally, once the 90-day redemption period for Mr. Kowalski's mortgage with OneWest lapsed by operation of law on August 24, 2015, OneWest became the sole owner of the Bryant Pond real estate, and Mr. Kowalski was not a debtor, a mortgagor to OneWest, or an owner of any interest in the Bryant Pond property."
The Court found
That "Mr. Kowalski has pleaded sufficient facts that the communications in this case went beyond these limits and were not merely invitations to redeem. As Mr. Kowalski points out, the "Account Statements" include an "Amount Due" with a payment coupon. They include language such as "Payment Due Date," "You are late on your mortgage payments," "DELINQUENCY NOTICE," and "Payment Outstanding." It is reasonable for a consumer like Mr. Kowalski to believe, based on the language contained in these statements, that he owed payments when, in fact, he owed nothing on the loan." The Court also found that the MCCC does not exclude emotional distress damages as relief for Maine consumers.
For more information read The Decision.