Explaining the Foreclosure Process in Maine
**FULL DISCLOSURE- Pomerleau Realty Group is not an attorney and all information is for informational use only. The following information should not be considered legal advice. Consumers should consult an attorney with any questions regarding foreclosure in Maine. Statutes and laws in Maine can change.
If you are concerned about your home being foreclosed, call Brandon Pomerleau at 207-890-1361 for a free consultation to discuss your options. Do not wait to take action!
If you default on your mortgage payments in Maine, the servicer (on behalf of the loan owner, called the "lender" in this article) will eventually begin a foreclosure. Maine law specifies how foreclosures work, and both federal and state laws give you rights and protections throughout the process.
What happens if you miss a mortgage payment?
If you miss a payment, the servicer can usually charge a late fee after the grace period expires. Most mortgage loans give a grace period of 10 to 15 days, for example, before you'll incur late charges.
If you miss a few mortgage payments, the servicer will probably send letters and call you to try to collect.
No more than 45 days after a missed payment, the servicer must let you know in writing about loss mitigation options that could be available, and assign personnel to help you.
Many Maine mortgages have a provision that requires the lender to send a breach letter if you fall behind on payments. This notice tells you that the loan is in default. If you don't cure the default, the lender can accelerate the loan (call it due) and go ahead with the foreclosure.
When Does Foreclosure Start?
Federal law generally requires the servicer to wait until the loan is over 120 days delinquent before officially starting a foreclosure. But in a few situations, the foreclosure can begin sooner.
Pre-foreclosure Notice Under Maine Law
If the property is your (the borrower's) primary residence, the lender has to send you a notice via certified mail of your right to cure before officially starting a foreclosure. The notice has to give you at least 35 days to cure the default (make up the missed payments) and reinstate the loan.
After the lender sends the notice of right to cure, it files a statement with the Bureau of Consumer Credit Protection. The Bureau then sends a notification to you, laying out a summary of your rights and available resources, including information about Maine's foreclosure mediation program.
State Foreclosure Laws in Maine
Maine requires the lender to file a lawsuit in court to foreclose. The lender gives notice of the suit by serving you a summons and complaint. The lender must attach a form to the complaint that you may use to answer the complaint and request mediation.
Maine's foreclosure diversion (mediation) program gives homeowners the opportunity to meet with the lender and an impartial mediator to try to work out a way to keep the home or, as an alternative, give up the home without going through foreclosure. This program is for owner-occupied homes.
What Happens If You Do—or Don't—File an Answer
If you can't work out a way to avoid foreclosure in the foreclosure diversion program, and you fail to answer the court action, the lender can get a default judgment from the court. The judgment will give the lender permission to hold a foreclosure sale.
If you respond to the lawsuit, however, the case will go through the litigation process. The lender might then request the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because there's no dispute about the case's critical aspects. If the court grants summary judgment for the lender—or you lose at trial—the judge will order the home sold at a foreclosure sale.
Notice About the Foreclosure Sale
After the redemption period (see below) expires, the lender publishes a notice of sale in a newspaper for three weeks. No less than 30 calendar days before the sale, the lender mails a notice of sale to all parties who appeared in the foreclosure action.
The Foreclosure Sale
The process ends with a foreclosure sale. The lender usually makes a bid on the property using a "credit bid" rather than bidding cash. With a credit bid, the lender gets a credit up to the amount of the borrower's debt. The highest bidder at the sale becomes the new owner of the property.
Reinstating the Mortgage Before the Foreclosure Sale in Maine
As noted earlier, Maine law gives you the right to cure the default and reinstate the mortgage within 35 days after the lender gives the notice of the right to cure. Also, you and the lender may enter into an agreement to bring the mortgage current at any time prior to the sale. The foreclosure will then be stayed so long as you don't default again.
Deficiency Judgment Following a Foreclosure Sale in Maine
Sometimes, a foreclosure sale doesn't bring in enough money to pay off the full amount owed on the loan. The difference between the sale price and the total debt is called a "deficiency balance." Many states, including Maine, allow the lender to get a personal judgment, called a "deficiency judgment," for this amount against the borrower.
Under Maine law, the foreclosing lender can get a deficiency judgment in the same action as the foreclosure. If the lender buys the home at the foreclosure sale, the deficiency is limited to the difference between the property's fair market value at the time of the sale and the total outstanding debt.
Redemption Period
in Maine, the redemption period takes place before the sale. After the court issues a foreclosure judgment, the redemption period is 90 days from the judgment date. The lender then provides notice of the sale. You might be able to redeem the home after the redemption period expires, but before the sale takes place, if the lender allows it.
Summary
- Missed Payments
- Foreclosure Process Starts
- Lender Sends Pre-Foreclosure Notice
- Lender Files Foreclosure Suit
- You Do or Don't File an Answer to the Suit
- Redemption Period
- Lender Publishes a Notice of Sale in Newspaper
- Foreclosure Sale Takes Place
