September 1, 2015
by Shannon Merrill and Santo Longo
Bendett & McHugh, P.C. - USFN Member (Connecticut, Maine, Vermont)
The 127th Maine Legislative Session adjourned July 16, 2015. Several default- and foreclosure-related measures were enacted. What follows is a summary of the new laws, all of which are effective October 15, 2015.
Notice to Cure Requirements — New provisions in Maine’s notice of default statute (14 M.R.S.A. § 6111) require that default notices specifically state the total amount due to cure the default, and notices must also state that the amount needed to cure does not include any amounts that will become due after the date of the notice itself.
Certification of Proof of Ownership Required — Beginning October 15, 2015 foreclosure complaints must contain a certification of proof of ownership of the loan. This change does not require the owner of the loan to be the named plaintiff in the action, but it does require that the loan owner is specifically identified in the complaint. Although the statutory language is not entirely clear, it appears that this requirement can be met by the drafting attorney including appropriate language in the complaint, and that a separate certification document executed by another party will not be required.
Municipal Action regarding Abandoned Properties — A new law authorizes Maine municipalities to issue a finding that real property, or a mobile home, is “abandoned,” and then order the property owner to address identified conditions at the property. If the property owner fails to comply, the municipality can perform the work itself and seek reimbursement from the owner. The Act requires a mortgagee, when initiating a foreclosure action, to provide the municipality with the contact information of an in-state representative for the purposes of receiving communications from the municipality regarding property abandonment issues. Under the new law, when title to real property in Maine is transferred pursuant to a foreclosure judgment, the new owner becomes subject to orders to correct property conditions, as well as potential liability and enforcement. This includes foreclosing lenders who take title at foreclosure sales and hold properties in REO portfolios.
Expedited Final Hearing Process — New legislation will permit foreclosing plaintiffs to request an expedited final hearing in cases where either: (1) efforts to mediate did not result in settlement or dismissal of the action, and any party that has appeared in the action consents to the request; or (2) the defendant did not answer the complaint and any appearing party consents to the request. Once the court receives the request, the expedited final hearing will, “as the interests of justice require,” be scheduled not less than forty-five days from the date the request is filed. The burden of proof and statutory requirements for entry of judgment remain the same.
Because of the limitations contained in the statute, it appears that use of the new expedited hearing process will largely be limited to default cases with no parties in interest actively contesting the foreclosure.
Standing to Foreclose and MERS — In an effort to address property title issues created by the Maine Supreme Court’s 2014 decision in Bank of America v. Greenleaf, 2014 ME 89, the Maine legislature has passed a law that creates a presumption that a mortgage assignment, partial release, or discharge executed by a party acting as nominee for another party is valid. This includes mortgage-related instruments executed by Mortgage Electronic Registration Systems, Inc. when acting as nominee for lenders. Importantly, in regard to assignments of mortgage specifically, the presumption of validity only applies in the context of foreclosure actions if the judgment of foreclosure is obtained and the applicable appeal period has run without an appeal being filed as of October 15, 2015 (the effective date of the Act).
Power of Sale Foreclosure — New legislation modifies Maine’s nonjudicial foreclosure process. This process allows mortgagees to proceed directly to sale in certain cases where specific statutory requirements are met, and is generally only available in cases involving commercial properties. The changes are largely procedural, not substantive. Specifically, the archaic requirement that notices must be sent by “registered mail” has been updated to a more commercially-reasonable “certified mail” requirement. The bill also eliminates the requirement that (post-sale) a petition must be filed with the Maine Superior Court to correct a purely typographical error/omission in the final vesting documents.
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