Maine Amends Various Provisions Related to Mortgage Loan Servicers and Foreclosure
The state of Maine amended its provisions under its Consumer Credit Code applicable to mortgage loan servicers. These provisions are effective on September 19, 2017 (or 90 days following adjournment of the current legislative session). Previously the code regulated the making of supervised loans and these amendments extend those regulations to the servicing of supervised loans. The amendments aim to improve the foreclosure process by regulating mortgage loan servicers. Some of the most important new amendments are as follows:
- “Creditor” now includes a mortgage loan servicer. (Sec. 1. 9-A MRSA §1-301, sub-§17)
- “Mortgage loan servicer” is now defined as a person or organization that undertakes direct collection of payments from or enforcement of rights against debtors arising from a supervised loan secured by a dwelling. (Sec. 2. 9-A MRSA §1-301, sub-§24-C)
- Unless a person is a supervised financial organization, or some other authorized financial institution or licensee pursuant to this Act the person may not engage in the business of servicing mortgage loans. (Sec. 4. 9-A MRSA §2-301)
- This Article applies to all consumer credit transactions that are made to finance or refinance the acquisition of real estate or the initial construction of a dwelling or that are secured by a first-lien mortgage on real estate and applies to the servicing of those transactions. (Sec. 10. 9-A MRSA §9-101)
- “The provisions of sections 2-301 to 2-304 control the authority of supervised lenders and mortgage loan servicers that are not supervised financial organizations to make or service loans governed by this Article.” (Sec. 11. 9-A MRSA §9-201)
The state of Maine also amended its provisions relating to hearing and judgment under foreclosure proceedings by civil action. These provisions are effective on September 19, 2017 (or 90 days following adjournment of the current legislative session). The Act aims to protect a homeowner’s equity of redemption in a foreclosure action.
“…a writ of possession may not issue until the expiration of the period of redemption provided for in this section, except that this section does not impair the right of a mortgagee to exercise rights set forth in the mortgage or security instrument to protect the mortgaged property.” (Sec. 1. 14 MRSA §6322)
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