Maine Enacts and Amends Foreclosure Regulation
by: Margaret Wright
On April 5, 2014, the Maine Legislature enacted new additions and amendments to existing Maine foreclosure regulation for the purpose of expediting the foreclosure process.
Transfer Taxes and Foreclosed Real Property
Newly enacted are sections concerning the assignment of rights in a foreclosed property made during the time between the judgment of foreclosure and the transfer of the foreclosed real property by deed. The Act provides that the State Tax Assessor will provide for the collection of transfer taxes as if the assignment were a transfer by deed. A person assigning rights in or connected with title to foreclosed property must report the assignment within 30 days of assignment to the register of deeds in the county in which the property is located. The assignment must be reported on a return in the form of an affidavit furnished by the State Tax Assessor. The transferee and transferor must both sign the return and must include the payment of the tax due.
Additionally enacted are new sections concerning transfer taxes application to mortgage deeds, deeds of foreclosure and deeds in lieu of foreclosure. These include:
- Mortgagor exemption from imposed tax for a deed in lieu of foreclosure;
- Where there is a transfer to a third party at a public sale, the tax imposed on the grantor only applies to the portion of the proceeds that exceeds the sums required to satisfy the claims of the mortgagee and all junior claimants for purposes of determination of the rate of tax;
- Where the transfer is from a mortgagee or its servicer to the mortgagee or its servicer the mortgagee or its servicer is considered to be both grantor and grantee for purposes of tax liability;
- The tax will be applied as to the value of the property in the event of a deed in lieu of foreclosure and a deed from a mortgagee or its servicer to the mortgagee or its servicer or to the owner of the mortgage debt.
Orders of Abandonment
New sections have been enacted regarding court orders of abandonment for residential properties in foreclosure. A motion may be filed with the court at any time after the commencement of a foreclosure action to determine that the mortgages premises have been abandoned.
A request for determination of abandonment may be requested in a judicial foreclosure action where:
- More than 50% of the mortgaged premises is used for residential purposes; and
- The mortgaged premises are the subject of an uncontested foreclosure action or an uncontested foreclosure judgment has been issued with respect to the premises.
Evidence must be presented to support the request for an order of abandonment. The court may find the property has been abandoned based on clear and convincing evidence.
The act outlines possible examples of evidence supporting abandonment which includes:
- Doors and windows on the mortgaged premises are continuously boarded up, broken or left unlocked;
- Rubbish, trash or debris has observably accumulated on the mortgaged premises;
- Furnishings and personal property are absent from the mortgaged premises; and
- Mortgagor is deceased and there is no evidence that an heir or personal representative has taken possession of the mortgages premises.
However, if the mortgagor or lawful occupant appears and objects to the motion the court may not grant the order of abandonment. Additionally, if the mortgagor or lawful occupant objects to a previously allowed order of abandonment prior to entry of judgment the court must vacate the order.
Where an order of abandonment has been allowed by the court:
- The foreclosure action may be advanced on the docket;
- The period of redemption is shortened to 45 days;
- The plaintiff shall assume the duties of landlord where the mortgage premises includes dwelling units occupied by tenants as their primary residence;
- The plaintiff must file the order of abandonment with the registry of deeds within 30 days of the later of the issuance of the judgment of foreclosure and order of abandonment.
Procedures for Civil Actions after Abandonment Order
The procedures for civil actions have been amended concerning the notice of public sale and public sale timing or adjournment where property has been abandoned. Where property has been determined to be abandoned by court order, the sale may only “be adjourned once for any time not exceeding 7 days, except that the court may permit one additional adjournment for good cause shown.”
Tax Acquired Property and Tax Liens
New sections have been added outlining the timeframes, as dependent on the date a tax lien was recorded, in which an action against the validity of a government taking for nonpayment of taxes may be commenced.
Debt Collector Defined
The definition of debt collector has been amended to include in the definition the additional examples of a repossession company and a residential real estate property preservation provider which fall under the “any person regularly engaged in the enforcement of security interests securing debts” heading.
Residential real estate property preservation providers and services are further defined in newly added sections. Additionally, where a debt collector takes possession of a property after default, requirements specific to residential real estate property preservation providers have been added.
Foreclosure Mediator Requirements
The requirements concerning assigned mediator foreclosure knowledge have been amended. The new amendments include the requirements that the assigned mediator be:
- Trained in relevant aspects of the law related to real estate, mortgage procedures, foreclosure or foreclosure prevention;
- Knowledgeable in principal loss mitigation and mortgage loan servicing guidelines and regulations; and
- Capable of facilitating and likely to facilitate identification of and compliance with principal loss mitigation and mortgage loan servicing guidelines and regulations.
Additionally, mediator reporting requirements have been amended to include clarification concerning the Net Present Value Worksheet completion and inclusion and description of all agreements reached at mediation by the parties.
About the Author
Margaret Wright, J.D., is Vice President and Regulatory Compliance Director at Bankers Advisory. She is a graduate of Stonehill College and earned her Juris Doctor at Suffolk University Law School. She is admitted to the Massachusetts Bar. She can be reached at Margaret@bankersadvisory.com
Margaret Wright, JD, is regulatory compliance director with CLA. She is a graduate of Stonehill College and earned her juris doctor at Suffolk University Law School. She is admitted to the Massachusetts Bar.
Comments are closed.