 Maine Loan Modification Guidelines
When you develop a definite plan of action with well-timed, well-informed
steps, you can stop the foreclosure process and save your home. We have
outlined the foreclosure process for the state of Maine.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available : No
Maine offers several methods of foreclosure. Most residential mortgage
foreclosures are done by filing a lawsuit in the District or Superior Court.
On the other hand, a foreclosure against a corporation may be done by a
power of sale procedure. Otherwise, Maine still maintains the common-law
strict foreclosure doctrine in which the lender owns the property and the
borrower loses any rights to the property by breaking a condition in the
mortgage, such as failing to make the loan payment. Although Maine is a
strict foreclosure state, it nevertheless permits a lawsuit to be filed
along the form of a bill in equity, which would ask the court to cut off
any further rights the borrower had to the property. This would be done
only in special cases. Generally, foreclosures in Maine are by strict foreclosure,
which, for convenience, can be divided into those circumstances in which
the lender seeks possession as part of the foreclosure, and those situations
where the lender does not seek possession as part of the foreclosure.
Strict Foreclosure with Possession
In Maine, the lender may want to take over the borrower's old property.
After regaining title by legal means, the lender could sell the property
at a later date, without giving the borrower the benefit of any excess
the lender gets out of the sale over and above what the borrower owed on
the old loan. Alternatively, the lender could simply keep the property
and rent it out. In sum, strict foreclosure allows the lender to become
the owner, pure and simple. To become the owner through strict foreclosure,
however, the lender must follow some specialized procedures. In particular,
the lender must obtain possession of the property and hold it throughout
the redemption period, which is one year on pre-1975 mortgages and three
months on post-1975 mortgages.
In Maine, there are three methods for the lender to regain possession
as part of the strict foreclosure process:
1. A lender can obtain a writ of possession (which authorizes the sheriff
to throw the borrower out) from a court by filing a lawsuit that asks for
the writ as part of a conditional judgment.
2. The lender can enter the property and take possession if the borrower
consented to it in writing.
3. The lender may enter the premises peacefully, openly and without opposition,
in the presence of two witnesses.
Strict Foreclosure Without Possession
In Maine, a lender can foreclose the borrower's rights to the property
without regaining possession at the time of foreclosure by arranging to
sell the borrower's property. Initially, the lender files a lawsuit and
wins a judgment that the borrower owes the money; then the lender must
wait until the end of the redemption period, as described previously. At
the end of the redemption period, the lender will sell the property by
a special procedure.
The procedure is to publish public notice of the impending foreclosure
for three successive weeks in a newspaper of general circulation in the
county where the land is located. The notice should state that the lender
is claiming the property due to a breach of the mortgage conditions (such
as nonpayment of the loan) and give a description of the property, the
date of the mortgage and the nature of the breach. A copy of the printed
notice and the name and date of the newspaper in which it was last published
must be recorded within 30 days of the last publication of the notice.
Alternatively, an attested (sworn) copy of the printed notice may be served
on the borrower by the sheriff, and a copy of the notice and the sheriff's
return (indicating that it was served) may be recorded within 30 days after
service.
The foreclosure sale must take place no less than 30 days and no more
than 45 days after the initial publication of notice. The property must
be sold at public sale to the highest bidder, which may be the lender or
anyone else. At the end of the sale, the sales costs are deducted and the
lender must disburse the remaining money in accordance with the foreclosure
judgment. Junior lien holders should already have been joined when the
foreclosure suit was first filed, so they may get some part of the proceeds.
Any surplus proceeds from the sale must be paid to the borrower. The borrower
may contest the accounting within 30 days after the sale, but the high
bidder at the foreclosure sale will still retain title.
Deficiency
Any deficiency based on the foreclosure sale is limited to the difference
between the fair market value of the property at the time of the foreclosure,
as established by an appraisal, and the amount of money the court found
the lender was still owed on the loan, as set forth in the court's final
judgment.
Redemption
Maine offers the borrower a fairly powerful right of redemption, which
is the right to get the property back after foreclosure by coming up with
the loan money. There are two redemption time periods:
1. Pro-October 1, 1975, mortgages: one year
2. Post-October 1, 1975, mortgages: three months
The time period begins once the lender wins a judgment in the foreclosure
lawsuit. The borrower may redeem the property by paying off the loan. The
Maine statutes cannot shorten the one-year time period on pre-1975 mortgages
be cause to do so would violate the Maine State Constitution by impairing
the existing provisions of a contract.
Waiver
Maine has a waiver procedure that can be deadly to the lender and helpful
to the borrower. If the lender accepts money or anything of value on the
mortgage debt after the foreclosure has begun and before the redemption
time period has expired, then the lender waives the foreclosure procedure.
However, the lender may receive income from the property after properly
taking possession without triggering a waiver.
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