Foreclosure Laws in Maine (ME)Topic: Foreclosure
In this state only in court or judicial foreclosures can be used. In Maine, their foreclosure doctrine is set up, so that the property is owned by the bank until the loan is paid in full. In this state, if the borrower breaks any of the conditions set forth in the mortgage, before the loan is paid in full, then they lose all right to the property. The bank can choose to either take possession of the home or sell it. Because owning property does not make the bank money, and in fact costs it money, and further, because the federal reserve severely punishes banks for having too many bank owned properties on their books, selling the house is virtually always the banks 1st choice in foreclosing.
If the mortgage was entered into before 1975, the home buyer has a three month right of redemption. If the mortgage was signed after 1975, then the home buyer, borrower is given a twelve month right of redemption. A right of redemption period is a time frame during which the person who loses their home to foreclosure has the right to regain ownership of the home by paying what is owed. If the bank has taken possession of the home in order to foreclose, then they must retain possession of the home for the whole redemption period, before it can finalize the foreclosure. The bank may also choose to foreclose without taking possession of the home. They must still wait out the redemption period, before they can sell the house. The terms of the sale will be set forth by the court and will vary from case to case.
Deficiency judgments are allowed in Maine. This is the right allows the bank to seek more money than is generated by the sale of the house. The bank would attempt to collect that money from the person who lost their home to the sale. The banks limited in how much it can seek. They can only attempt to collect the difference between what the house sold for and what an appraiser says the fair market value of the home is. Of course, the bank will not be inclined to pursue a person with little or no assets to pay. It would be a wasted of time. In this state, the power of sale clause that allows a bank to foreclose, without going through the court system is only allowed on commercial property. To begin, the in-court or judicial process, the bank must 1st file a complaint along with a 'Lis Pendens'. This is a lawsuit against the home owner who is having trouble paying his mortgage. The 'Lis pendens' is a recorded public statement by the bank that the property is being foreclosed upon. The bank must wait on the court to make a final judgment of foreclosure. The bank's attorney must notify the home owner no less than thirty days before the scheduled sale date that the home is going to be sold. The scheduled sale date must be advertised once a week for the three weeks leading up to the scheduled sale date. This ad must be run in a local paper with general circulation in the county where the home is located.
Foreclosure in Maine, takes quite a long time, because of the necessity of every case having to move through the courts to be completed. The average length of time for a foreclosure, beginning to end, in this state is one hundred days. This process can be delayed even longer that this by using contesting or delaying strategies. These strategies can include adjournment hearings or even bankruptcy.