There are several bills pending before the Maine Legislature that would affect the Maine residential foreclosure process.  Many of our clients have been able to save their homes due to the Foreclosure Diversion Program (FDP) that allows Maine homeowners who are living in their homes to meet with a representative from the bank to try and procure a loan modification or other loss mitigation option to save their home.  Before the FDP, many homeowners were caught in the never-ending document treadmill of providing the same documents over and over again to the bank in the hopes of being evaluated for a loan modification.  The FDP requires all parties to participate in good faith and enables the parties to lay out expectations, documents needed, and a reasonable timeline for providing documents and reviewing for loss mitigation options.  All of this provides homeowners with a concrete answer on their options and enables to the banks to provide options that mitigate their costs.  Without this option, Maine homeowners would again be at the mercy of the banks' agents on the phone, providing inconsistent information, endless requests, and potentially wrongful denials of modifications.  Below is a summary provided by attorney Thomas Cox of some of the bills that would affect this important program.  We encourage you to review the bills and then contact the sponsor and/or your representative to voice your opinions. 

127th Maine Legislature: Bills Relating to Residential Foreclosure Rev. through Mar. 16, 2015

LD 111: Jud. Rep. Daughtry An Act to Ensure That Defendants Receive Proper Notification in Foreclosure Proceedings This bill would amend 14 M.R.S. § 6321 to required that default and right to cure notices and all  other mortgagee communications to a homeowner be sent by certified mail.

LD 321: Jud. Rep. Poulot An Act to Protect Consumers against Residential Real Estate Title Defects This bill is intended to overcome the holding of the Law Court in Bank of America v. Greenleaf by creating a statutory presumption that an entity that "is appointed the nominee mortgagee by the person that holds legal title to the mortgage, is presumed to have the authority to execute an assignment, partial release, discharge…" of that mortgage.

LD 401 Jud. Rep. Beavers An Act to Create Transparency in the Mortgage Foreclosure Process This bill would allow only the owner of mortgage loans to be the foreclosing parties, thus ending the Fannie/Freddie practice of having those loans foreclosed in the names of the servicers.

LD 630 IF&S& ;Rep. Whittemore An Act to Clarify the Requirements for Notice of the Right to Cure a Mortgage Default This bill amends 14 M.R.S. § 6111 to require that the default notice state the total amount required to cure the default, but allowing the notice to state that the total due  does not include amounts that may come due after the date of the notice. Also, the bill amends the requirement for notice to the Bureau of Consumer Credit Protection to allow that notice to be sent after the 35 day cure period has expired, but at least 35 days before commencement of foreclosure.

LD 735 Jud.   Sen. Valentino (Saco) An Act to Establish a Voluntary Preforeclosure Mediation Program This bill would allow mortgagees to require homeowners to participate in a pre-foreclosure mediation process, where that process would eliminate the homeowner's right to use the present judicial foreclosure mediation process. The bill would use judicial branch financial and administrative resources to operate the pre-foreclosure mediation program. 

  • 6113(3) & (4):  If the homeowner fails to respond to a request to mediate, he/she waives his/her right to judicial mediation when a foreclosure commences. 
  • 6113(8)(E):  If the homeowner does respond to the request for voluntary mediation, he/she waives the right to judicial mediation in any foreclosure commenced within the following 12 months.

The homeowner loses the right to participate in the Court FDP either way.

A Public Hearing on LD 735 will be held at the Maine State House in Augusta, Judiciary Hearing Room 438 on April 23 at 1:00pm.  The public is welcome to observe and provide testimony.  

LD 846 Jud. Rep. Hobbins An Act to Refine and Streamline the Foreclosure Mediation Program This act would require a new check box on the BCCP's form answer to allow  the  homeowner  to  check off  a  box  stating  that  the  homeowner  does want  to participate  in  mediation.  Also,  the  bill  would allow  the  mediator  to chose  the  location  of  the  mediation  sessions.  Finally,  the  bill  would  allow employees  of  financial  institutions  authorized  to  do  business  in  Maine,  as defined in 9-­?B M.R.S. §131(2) to appear at mediations instead of plaintiff's lawyers-­?-­?this would allow Banks to send any employee to a mediation  instead  of  a  lawyer.

LD 920    Rep. Tucker  An Act to Require Mortgage Servicers to Act in Good Faith in Dealings With Homeowners This bill would require mortgage servicers to act in good faith toward homeowners in all dealings and provides a right of action for actual damages for breach of the duty. It limits the right of mortgagees to charge homeowners for legal fees where, their servicers violate the duty of good faith. The bill provides that servicers participating in foreclosure mediation subject themselves to the jurisdiction of the courts for the direct imposition of sanctions when they fail to act in good faith during the mediation process.

unknown Rep. Cooper  An Act to Clarify the Mortgage Foreclosure Sale Process This bill would limit to 60 days court allowed extensions of the foreclosure sale date, but would allow further extensions upon proof of ongoing loss mitigation efforts. It would create a duty for mortgagees to maintain non-­?owner occupied mortgaged rental properties beginning with the expiration of the 90 day redemption period, and it would create that duty for owner occupied properties as of the final deadline for foreclosure sale, whether or not that sale takes place. It would also provide that a failure to file a report of sale within 45 days after sale will result in the waiver of a mortgagee's right to claim a deficiency.