Maine Foreclosure Laws
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Maine follows a lien theory when it comes to foreclosures and the property stays as guarantee for the loan in question. A property is placed under the lien through a document referred to as a mortgage. In the case of a commercial mortgage, a provision for a power of sale exists in Maine.
A judicial foreclosure process is followed in Maine where a lender has to go through a court which in turn announces the foreclosure’s final ruling. The property then sells at a publicly notified sale. A complaint in conjunction with a lis pendens (a document that is recorded to provide a notice publicly about the property in foreclosure) needs to be filed in a court. The scheduled date of the sale has to be advertised consecutively for there weeks before the sale’s date and a notice of thirty days is to be given to the borrower before the foreclosure sale.
The legal documents are referred to as a mortgage or note, and a security agreement in cases of commercial transactions. They are both merged time and again. The filing of a mortgage is done to verify the loan in question and its repayment terms, which are included in the note.
It can take about 180 to 200 days, with the schedule of the court taken into consideration, for a foreclosure that is not contested to come into effect. If bankruptcy is filed for by the borrower, or if the action is contested and the hearing is sought to be postponed, there can be a delay in the process.
A statutory right of redemption, where the owner of a foreclosed property can lay claim to it by paying the costs and the remainder of the loan amount in full, is in place in Maine. This redemption period depends on when the execution of the mortgage took place, and can vary from three months to twelve months. Not all actions can be taken for the sale of the foreclosure to complete before the expiry of the right of redemption.
If a foreclosure property sells for lesser than the amount which is secured by the mortgage in question, a deficiency judgment can be acquired. The borrower then ends up owing to the lender the amount that remains when the amount on the original loan is subtracted from the sale amount. Judgments of deficiency, though, use the market’s fair value as a limit, which are established by appraisals.
Foreclosures in Maine State are governed by laws that are part of the Maine Revised Statutes, Title 14, part 4, Chapter 403 (Title to Real Estate by Levy and Execution).
