An Act Regarding Maine’s Power of Sale Foreclosure Law
By Linaldo Donovan-Green
On June 5, 2015, the Maine Legislature enacted new amendments to Power of Sale Foreclosure Law. The following “power” is a statutory power in written into a mortgage which is triggered upon any default in the performance of a mortgage. Under the provision, a mortgagee may foreclose and sell encumbered real estate pursuant to Title 14, chapter 713, subchapter 3. Such sale forever bars the mortgagor and all persons claiming under it from all right and interest in the premises, whether at law or in equity.
Amended Section 6203-A. Power of Sale now includes limited liability partnerships as holders of these types mortgage on real estate as described in Title 33, section 501-A. Foreclosure on a mortgage using this provision must continue to comply with the requirements of subsection 3, which consist of: 1) a foreclosure notice being published in each of three successive weeks, where the first publication is not less than 21 days before the day of the sale in a newspaper where the land lies; and 2) where the mortgage deeds executed on or after October 1, 1993, the mortgage deed purpose is: business, commercial, or agricultural.
Section 1-A. Notice to Mortgagor and Parties in interest has been added to instruct a mortgagee on steps needed to serve the proper due process on foreclosed mortgagors. Under the added definition, mortgagees are required to serve notice at least 21 days before the date of sale. A copy of the foreclosure notice can be served: 1) directly on the mortgagor or its representative in interest; or 2) by registered or certified mail addressed to the mortgagor or the mortgagor’s representative at the mortgagor’s last known address; or 3) directly to the person and to the address as may be agreed upon in the mortgage; or 4) directly to the address as may be provided in writing by the mortgagor to the mortgagee. Also, a copy of the foreclosure notice must be sent by first-class mail, postmarked at least 21 days prior to the public sale, to all parties in interest or to any other address that may be readily available to the mortgagee. Failure to notify any party in interest, other than the mortgagor, does not invalidate the foreclosure as to other parties in interest who were given notice.
Amended Section 2. Notice to Tenants; Effect on title, provides a mortgagee procedures for providing foreclosure notice to a residential tenant. Notice to a residential tenant may be served by: 1) a sheriff; or 2) first-class mail at the residential tenant’s last known address; or 3) posted conspicuously at each entrance to the mortgaged premises. Newly enacted Section 2-A. Recording Foreclosure Notice requires a 21 day minimum of notice prior to the execution of the sale. Constructive notice is a must. Amended Section 3. Form of Foreclosure Notice instructs the mortgagee on how to prepare a foreclosure notice intended to be served. Within the foreclosure notice the parties involved such as the mortgagee, the mortgagor, and the terms of the public sale, the location, date and time of the public sale, the street address of the real estate encumbered by the mortgage, must be identified. According to Section 4. Notice of sale, a foreclosure notice given to the parties in interest is sufficient notice of a sale. The sold real estate is considered free and clear of any interest from the mortgagor and of all other parties in interest who have been given notice in compliance with subsection 1-A.
Under amended Section 5. Public Sale, a purchase and sale agreement between highest bidder and the mortgagee must be executed at the completion of the purchase and sale agreement. The purchase and sale agreement can be assigned to the purchaser. If the real estate is sold for an amount in excess of the outstanding balance of the mortgage, the excess must be used to satisfy all claims of parties in interest whose interests were extinguished by the foreclosure in the order of priority that existed prior to the foreclosure.
Newly added Section 6. Continuation of Sale provides that public sales may be adjourned for no more than 30 days and from start to finish, by announcement to those present at each adjournment. Amended Section 6203-B. Copy of Notice; Affidavit; Recording; Evidence, post a 30-day requirement that an affidavit be executed between the mortgagee or agent and purchaser or agent. The affidavit must specifically state mortgagee’s acts along with the foreclosure notice as published, and be recorded in the registry of deeds for the county where the land lies. The affidavit must identify the mortgagee and mortgagor and include: 1) the street address, if any, of the real estate encumbered by the mortgage; and 2) a description of the real estate encumbered by the mortgage, which may be incorporated by reference to the book and page number of an instrument of record containing an adequate legal description of the real estate; and 3) the book and page number, if any, of the mortgage; and 4) the dates of publication and the name of the publishing entity of the public notice required by section 6203-A, subsection 1; and 5) the recipients and mailing or service sates of notices provided pursuant to section 6203-A, subsection 1 and 1-A and section 6203-E; and 6) the final purchaser under the agreement described in section 6203-A, subsection 5 and the date of delivery of the deed to the purchaser or the purchaser’s agent. In case of an error or omission in the affidavit recorded, the mortgagee or its agent must record an amended affidavit correcting the error or omission which will have the same effect and must be admitted into evidence.
Under Section 6203-D. Limitation of Actions, any actions on a mortgage note to recover judgments for deficiencies must be commenced: 1) within two years after the date of delivery of the deed to the purchaser or the purchaser or the purchaser’s agent; or 2) if the principle of the note or other obligation does not become payable until after the date of delivery of the deed to the purchaser or the purchaser’s agent, then within two years after the time when the cause of action for the principal accrues.
Under amended Section 6203-E. Liability for deficiency on sale; necessity of notice; form; affidavit, in the event that the mortgage is the purchaser at the public sale, any deficiency is limited to the difference between the fair market value of the premises at the time of the sale, as established by an independent appraisal, and the sum due the mortgagee with interest plus the expenses incurred in making the sale. Newly added Section 6203-G. Assignment of mortgage, holds that any assignment by a foreclosing mortgagee does not affect the validity of the foreclosure. Upon the recording of the assignment of mortgage in the registry of deeds where the land lies, the assignee of the mortgage may complete the foreclosure.
Anna DeSimone founded Bankers Advisory in 1986 and is a nationally recognized authority in residential mortgage lending. She has received numerous industry awards and has authored more than 40 best practices guides and hundreds of articles.
Comments are closed.