Maine Foreclosure Law
Based on some current government estimates, 1 out of 2 homeowners owe more than the value of their home. While Maine has made out better than much of the country, many homeowners are in trouble. Loan modifications can offer some short term help when available, but unfortunately many homeowners are unable to qualify.
By cashing out retirement accounts, using credit cards to pay bills and relying on family members, many homeowners are delaying the inevitable. A short sale is sometimes one option to financial relief and the road to recovery.
In this state only in court or judicial foreclosures can be used. In Maine, their Maine Foreclosure Law 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.
Deficiency judgments are allowed in main. 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 appraise 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.
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.
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.
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