For homeowners facing foreclosure in Maine, the following is a summary of the state’s foreclosure laws:
Foreclosures in Maine are judicial, meaning the bank must file a lawsuit in court in order to foreclose.
Nonjudicial foreclosures are not allowed in Maine
Maine law requires the three notices:
- The bank must send a notice of right to cure to the homeowner that allows at least 35 days to cure the default before officially initiating a foreclosure.
- After sending the notice of right to cure, the bank must file a statement with the Bureau of Consumer Credit Protection, which will then send a notice to the homeowner, which includes information regarding rights, available resources and information about Maine’s foreclosure mediation program.
- To officially initiate a foreclosure, the bank must file a lawsuit in court and gives notice of the suit by serving the homeowner a summons and complaint. The bank must include a form to the complaint that the homeowner may use to answer the complaint and to request mediation, giving the homeowner 20 days to file an answer to the complaint.
- After the redemption period expires, the bank must publish a notice of sale in a local newspaper for three weeks. The bank must also send a notice of sale to all parties who appeared in the foreclosure action at least 30 days before the sale.
Maine Foreclosure Protections
Maine law provides protections in accordance with the federal Service Members Civil Relief Act.
Maine law also provides protections to members of the state national guard ordered active duty for 30 days or more.
Before it can foreclose on a high-cost home loan, the bank cannot charge a prepayment penalty and cannot engage in flipping. If the bank violates the law, the homeowner can sue for damages.
Reinstatement and Redemption
Maine law allows the homeowner to cure the default and reinstate the mortgage within 35 days after the bank gives the notice of right to cure. Me. Also, the bank and the homeowner may agree prior to the sale to allow the homeowner to bring the mortgage current. The foreclosure will then be stayed as long as the homeowner does not default again.
In Maine, the redemption period is 90 days before the sale. The homeowner can redeem the home after the redemption period ends, but before the sale takes place, if the bank agrees to it.
Under Maine law, the bank can request a deficiency judgment in the same action as the foreclosure, but the court will limit the judgment to the amount set on the date of the sale.
If the bank purchases the home at the foreclosure sale, the deficiency is limited to the difference between the market value of the home and the total outstanding debt.
In Maine, the bank may get a writ of possession against the foreclosed homeowners as part of the foreclosure action. For information regarding how to avoid foreclosure in Maine, visit HUD.gov.