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Maine Legislature Passes Bill Affecting Residential Foreclosure, Property Preservations

Posted By USFN, Thursday, July 23, 2020
by James Garnet
Brock and Scott, PLLC
USFN Member (AL, CT, FL, GA, MA, MD, ME, ME, MI, NC, NH, OH, RI, SC, TN, VA, VT)

The Maine Legislature recently passed a bill that will have an impact on the residential foreclosure and property preservation processes (An Act to Preserve the Value of Abandoned Properties by Allowing Entry by Mortgagees – H.P. 1407 – L.D. 1963). This bill was signed by the Governor on March 18, 2020 and will take effect on June 16, 2020.

The stated purpose of this bill is to assist communities and financial institutions when a property becomes abandoned by the owner. In reality, the bill makes it more difficult for financial institutions to secure a property or take any ameliorative actions to prevent further deterioration.

Most mortgages contain a provision that allows a mortgagee to enter a property to make repairs, change locks, replace or board up doors and windows, drain water from the pipes or rectify any code violations or dangerous conditions. This new law, however, will place additional burdens upon mortgagees and mortgage loan servicers who have commenced a foreclosure action before they can take any of the aforementioned actions.

After commencement of an action for foreclosure, a mortgage loan servicer is required to file an affidavit with the court attesting to the abandonment of the property before any property preservation efforts that require entry on to the property may be commenced.

The bill sets forth the criteria that may be used to make a determination of abandonment and further sets forth what must be included in the affidavit and who may attest to those facts. The court will not make a determination of abandonment or take any further action on the filed affidavit.

The bill further imposes notice and record maintenance requirements upon the mortgage loan servicer. The notice must be posted on the front door of the property and the bill specifies what information is required to be included in the notice. Records of entry must be maintained by the servicer or its designee for at least four years. The bill also provides for penalties against servicers for any violations.

Text of the full bill may be found here: https://www.usfn.org/resource/resmgr/misc_images/BrockScott_MEHP1407_4_15_20.pdf

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Spring 2020 USFN Report

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