Maine Foreclosure Information
When you develop a definite plan of action with well-timed, well-informed steps, you can stop
the foreclosure process and save your home. We have outlined the foreclosure process for the
state of Maine.
Judicial Foreclosure Available: Yes
Non-judicial Foreclosure Available: No
Maine offers several methods of foreclosure. Most residential mortgage foreclosures are
done by filing a lawsuit in the District or Superior Court. On the other hand, a foreclosure
against a corporation may be done by a power of sale procedure. Otherwise, Maine still maintains
the common-law strict foreclosure doctrine in which the lender owns the property and the
borrower loses any rights to the property by breaking a condition in the mortgage, such
as failing to make the loan payment. Although Maine is a strict foreclosure state, it nevertheless
permits a lawsuit to be filed along the form of a bill in equity, which would ask the court
to cut off any further rights the borrower had to the property. This would be done only
in special cases. Generally, foreclosures in Maine are by strict foreclosure, which, for
convenience, can be divided into those circumstances in which the lender seeks possession
as part of the foreclosure, and those situations where the lender does not seek possession
as part of the foreclosure.
Strict Foreclosure with Possession
In Maine, the lender may want to take over the borrower's old property.
After regaining title by legal means, the lender could sell the property at a later date,
without giving the borrower the benefit of any excess the lender gets out of the sale over
and above what the borrower owed on the old loan. Alternatively, the lender could simply
keep the property and rent it out. In sum, strict foreclosure allows the lender to become
the owner, pure and simple. To become the owner through strict foreclosure, however, the
lender must follow some specialized procedures. In particular, the lender must obtain possession
of the property and hold it throughout the redemption period, which is one year on pre-1975
mortgages and three months on post-1975 mortgages.
In Maine, there are three methods for the lender to regain possession as
part of the strict foreclosure process:
- A lender can obtain a writ of possession (which authorizes the sheriff
to throw the borrower out) from a court by filing a lawsuit that asks for the writ as
part of a conditional judgment.
- The lender can enter the property and take possession if the borrower
consented to it in writing.
- The lender may enter the premises peacefully, openly and without opposition,
in the presence of two witnesses.
Strict Foreclosure Without Possession
In Maine, a lender can foreclose the borrower's rights to the property without
regaining possession at the time of foreclosure by arranging to sell the borrower's property.
Initially, the lender files a lawsuit and wins a judgment that the borrower owes the money;
then the lender must wait until the end of the redemption period, as described previously.
At the end of the redemption period, the lender will sell the property by a special procedure.
The procedure is to publish public notice of the impending foreclosure for
three successive weeks in a newspaper of general circulation in the county where the land
is located. The notice should state that the lender is claiming the property due to a breach
of the mortgage conditions (such as nonpayment of the loan) and give a description of the
property, the date of the mortgage and the nature of the breach. A copy of the printed notice
and the name and date of the newspaper in which it was last published must be recorded within
30 days of the last publication of the notice. Alternatively, an attested (sworn) copy of
the printed notice may be served on the borrower by the sheriff, and a copy of the notice
and the sheriff's return (indicating that it was served) may be recorded within 30 days
after service.
The foreclosure sale must take place no less than 30 days and no more than
45 days after the initial publication of notice. The property must be sold at public sale
to the highest bidder, which may be the lender or anyone else. At the end of the sale, the
sales costs are deducted and the lender must disburse the remaining money in accordance
with the foreclosure judgment. Junior lien holders should already have been joined when
the foreclosure suit was first filed, so they may get some part of the proceeds. Any surplus
proceeds from the sale must be paid to the borrower. The borrower may contest the accounting
within 30 days after the sale, but the high bidder at the foreclosure sale will still retain
title.
Deficiency
Any deficiency based on the foreclosure sale is limited to the difference
between the fair market value of the property at the time of the foreclosure, as established
by an appraisal, and the amount of money the court found the lender was still owed on the
loan, as set forth in the court's final judgment.
Redemption
Maine offers the borrower a fairly powerful right of redemption, which is
the right to get the property back after foreclosure by coming up with the loan money. There
are two redemption time periods:
- Pro-October 1, 1975, mortgages: one year
- Post-October 1, 1975, mortgages: three months
The time period begins once the lender wins a judgment in the foreclosure
lawsuit. The borrower may redeem the property by paying off the loan. The Maine statutes
cannot shorten the one-year time period on pre-1975 mortgages be cause to do so would violate
the Maine State Constitution by impairing the existing provisions of a contract.
Waiver
Maine has a waiver procedure that can be deadly to the lender and helpful
to the borrower. If the lender accepts money or anything of value on the mortgage debt after
the foreclosure has begun and before the redemption time period has expired, then the lender
waives the foreclosure procedure. However, the lender may receive income from the property
after properly taking possession without triggering a waiver.
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