Maine Legislative Documents 1327, 1405 and 907

The Maine legislature recently modified various provisions of its foreclosure laws, effective September 19, 2019.

Legislative Document (“L.D.”) 1327 amended the law to impose a duty of good faith upon mortgage loan servicers in dealing with homeowners.  If a servicer controlling or managing a foreclosure fails to act in good faith toward the borrower, the court may dismiss the foreclosure, stay the action or impose other appropriate sanctions until the violation is cured.  The law also provides that a borrower injured by a violation of the duty of good faith may bring an action against the servicer for actual and, in some cases, statutory damages.

L.D. 1405 requires the lender to file the report of the sale and disbursement of proceeds with the court within the earlier of 90 days after the public sale and 45 days after the lender’s delivery of the deed conveying the mortgaged property to the purchaser at the mortgage sale. Upon a showing of good cause by the lender, made by motion filed before the expiration of the deadline, the court may extend the deadline for the filing of the report of sale for an additional period of time as the court considers appropriate. In the event that the lender fails to timely file the report of sale, the lender has no right to seek a deficiency judgment.

When a borrower is in default, the lender must provide notice of right to cure to the borrower and any cosigner at their last known addresses by both certified mail and first-class mail.  L.D. 907 clarifies that the time when the notice is considered to have been given to the borrower or cosigner is the sooner of:

• The date the borrower or cosigner signs the certified mail receipt or, if the notice is undeliverable, the date the post office last attempts to deliver it; and
• The date the borrower or cosigner actually receives the notice.