An Act To Preserve Home Ownership and Stabilize the Economy by Preventing Unnecessary Foreclosures
Emergency preamble. Whereas, acts and resolves of the Legislature do not become effective until 90 days after adjournment unless enacted as emergencies; and
Whereas, the State's rate of mortgages in foreclosure is rising to unprecedented levels, both for prime and subprime mortgages; and
Whereas, foreclosures are expected to continue in the State because homeowners will not be able to afford payments due to rising adjustable mortgage payments, rising unemployment and job loss; and
Whereas, homeowners are expected to have continued problems selling their properties at the value of their mortgages due to falling housing prices; and
Whereas, foreclosures contribute to the decline in the State's housing market, loss of property values and loss of tax revenues; and
Whereas, the number of foreclosure actions in the courts is rapidly increasing and the current system for resolving foreclosure actions is creating a burden on the court system; and
Whereas, in the judgment of the Legislature, these facts create an emergency within the meaning of the Constitution of Maine and require the following legislation as immediately necessary for the preservation of the public peace, health and safety; now, therefore,
Sec. 1. 4 MRSA §18-B, sub-§12 is enacted to read:
Sec. 2. 4 MRSA §104, as amended by PL 2009, c. 136, §1, is further amended to read:
§ 104. Active retired justices
Any Justice of the Superior Court who has retired from the court under this chapter in effect prior to December 1, 1984, or any Justice of the Superior Court who retires or terminates that justice's service on the court in accordance with chapter 27, except for a disability retirement, is eligible for appointment as an Active Retired Justice of the Superior Court. The Governor, subject to review by the joint standing committee of the Legislature having jurisdiction over judiciary matters and to confirmation by the Legislature, may appoint any eligible justice as an Active Retired Justice of the Superior Court for a term of 7 years, unless sooner removed. That justice may be reappointed for a like term. Any justice so appointed and designated thereupon constitutes a part of the court from which that justice has retired and has the same jurisdiction and is subject to the same restrictions therein as before retirement. An Active Retired Justice of the Superior Court may serve as an arbitrator and conduct arbitration in accordance with rules that may be adopted by the Supreme Judicial Court, except that nothing in this section requires the Supreme Judicial Court to adopt those rules. An Active Retired Justice of the Superior Court may chair screening panels in accordance with Title 24, chapter 21, subchapter 4-A. An Active Retired Justice of the Superior Court may act only in the cases and matters and hold court only at the terms and times as that justice is directed and assigned by the Chief Justice of the Superior Court. Any Active Retired Justice of the Superior Court may be directed by the Chief Justice to hold any term of the Superior Court in any county and when so directed has authority and jurisdiction therein the same as if that justice were the regular justice of that court. Whenever the Chief Justice of the Superior Court so orders, that justice may hear all matters and issue all orders, notices, decrees and judgments in vacation that any justice of that Superior Court is authorized to hear and issue. An Active Retired Justice of the Superior Court may be assigned by the Chief Justice of the Superior Court to act as a mediator for the foreclosure mediation program in accordance with Title 14, section 6321-A, subsection 7. An Active Retired Justice of the Superior Court receives reimbursement for expenses actually and reasonably incurred in the performance of that justice's duties.
Sec. 3. 4 MRSA §157-B, as amended by PL 2009, c. 136, §2, is further amended to read:
§ 157-B. Active retired judges; appointment
Any Judge of the District Court who has retired from the court under this chapter prior to December 1, 1984, or any Judge of the District Court who retires or terminates that judge's service on the court in accordance with chapter 27, except for a disability retirement, is eligible for appointment as an Active Retired Judge of the District Court as provided. The Governor, subject to review by the joint standing committee of the Legislature having jurisdiction over judiciary matters and to confirmation by the Legislature, may appoint any eligible judge to be an Active Retired Judge of the District Court for a term of 7 years, unless sooner removed. That judge may be reappointed for a like term. Any judge so appointed and designated thereupon constitutes a part of the court from which that judge has retired and has the same jurisdiction and is subject to the same restrictions therein as before retirement. An Active Retired Judge of the District Court may serve as an arbitrator and conduct arbitration in accordance with rules that may be adopted by the Supreme Judicial Court, except that nothing in this section requires the Supreme Judicial Court to adopt those rules. An Active Retired Judge of the District Court may chair screening panels in accordance with Title 24, chapter 21, subchapter 4-A. An Active Retired Judge of the District Court may act only in those cases and matters and hold court only at those sessions and times as that judge is directed and assigned by the Chief Judge of the District Court. Any Active Retired Judge of the District Court may be directed by the Chief Judge to hold any session of the District Court in any district and when so directed has authority and jurisdiction therein the same as if that judge were the regular judge of that court and, whenever the Chief Judge of the District Court so orders, may hear all matters and issue all orders, notices, decrees and judgments that any Judge of that District Court is authorized to hear and issue. An Active Retired Judge of the District Court receives reimbursement for expenses actually and reasonably incurred in the performance of that judge's duties. An Active Retired Judge of the District Court may be assigned by the Chief Judge of the District Court to act as a mediator for the foreclosure mediation program in accordance with Title 14, section 6321-A, subsection 7.
Sec. 4. 9-A MRSA §6-116, sub-§2, as amended by PL 1995, c. 397, §1, is further amended to read:
Sec. 5. 9-A MRSA §6-116, sub-§3, as enacted by PL 1985, c. 763, Pt. A, §51, is amended to read:
Sec. 6. 9-A MRSA §6-116, sub-§4 is enacted to read:
Sec. 7. 9-A MRSA §9-408 is enacted to read:
§ 9-408. Violation of the Maine Unfair Trade Practices Act
Any violation of this article constitutes a violation of the Maine Unfair Trade Practices Act.
Sec. 8. 9-B MRSA §162, sub-§7 is enacted to read:
Sec. 9. 14 MRSA §2401, sub-§3, as amended by PL 1993, c. 114, §2 and affected by §4, is further amended to read:
Unless a proposed judgment with the provisions required in this subsection is presented to the court at the time of the court's decision, the court shall name the party responsible for preparing a judgment with the required provisions. An attested copy of the judgment with the signed clerk's certification must be recorded in the registry of deeds for the county or counties where the subject property is located within one year of the entry of the final judgment unless otherwise ordered by the court. For the purposes of this section, a judgment is not final until all applicable appeal periods have expired and any appellate proceedings and subsequent actions on remand, if any, have been concluded. The court shall name the party responsible for recording the attested copy of the judgment and for paying the appropriate recording fees. The judgment has no effect as to any person not a party to the proceeding who has no actual knowledge of the judgment unless an attested copy of the judgment is recorded in accordance with this section. A judgment of foreclosure and sale for recording may not be recorded in the registry of deeds unless it is in compliance with the requirements of this section. Failure to comply with this section does not affect the validity of the underlying judgment.
Sec. 10. 14 MRSA §6111, sub-§1, as amended by PL 1997, c. 579, §1, is further amended to read:
Sec. 11. 14 MRSA §6111, sub-§1-A is enacted to read:
Sec. 12. 14 MRSA §6111, sub-§3-A is enacted to read:
Sec. 13. 14 MRSA §6111, sub-§3-B is enacted to read:
Sec. 14. 14 MRSA §6111, sub-§4-A is enacted to read:
Sec. 15. 14 MRSA §6112 is enacted to read:
§ 6112. Statewide outreach
To the extent resources are available pursuant to subsection 4, the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection shall engage in the following activities.
Sec. 16. 14 MRSA §6203-A, first ¶, as amended by PL 1995, c. 106, §1, is further amended to read:
Any holder of a mortgage on real estate that is granted by a corporation, partnership, including a limited partnership, limited liability company or trustee of a trust and that contains a power of sale, or a person authorized by the power of sale, or an attorney duly authorized by a writing under seal, or a person acting in the name of the holder of such mortgage or any such authorized person, may, upon breach of condition and without action, do all the acts authorized or required by the power; except that a sale under the power is not effectual to foreclose a mortgage unless, previous to the sale, notice has been published once in each of 3 successive weeks, the first publication to be not less than 21 days before the day of the sale in a newspaper of general circulation in the town where the land lies and which notice must prominently state the street address of the real estate encumbered by the mortgage deed, if any, and the book and page number of the mortgage. This provision is implied in every power of sale mortgage in which it is not expressly set forth. For mortgage deeds executed on or after October 1, 1993, the power of sale may be used only if the mortgage deed states that it is given primarily for a business, commercial or agricultural purpose. A copy of the notice must , at least 21 days before the date of the sale under the power in the mortgage, be recorded in each registry of deeds in which the mortgage deed is or by law ought to be recorded and must be served on the mortgagor or its representative in interest, or may be sent by registered mail addressed to it the mortgagor or the mortgagor's representative at its the mortgagor's last known address, or to the person and to the address as may be agreed upon in the mortgage, at least 21 days before the date of the sale under the power in the mortgage. The mortgagee shall provide a copy of the notice to a tenant if the mortgagee knows or should know by exercise of due diligence that the property is occupied as a rental unit. Upon request from a mortgagee, the mortgagor or its representative in interest shall provide the name, address and other contact information for any tenant. Notice to a tenant may be served on the tenant by sheriff or may be sent by first class mail and registered mail at the tenant's last known address. No less than 21 days after service of the notice required by this section, the mortgagee may institute an action pursuant to section 6001. This paragraph may not be construed to prohibit an action for forcible entry and detainer in accordance with section 6001 for a reason that is not related to a foreclosure sale. Any power of sale incorporated into a mortgage is not affected by the subsequent transfer of the mortgaged premises from the corporation, partnership, including a limited partnership, limited liability company or trustee of the trust to any other type of organization or to an individual or individuals. The power of sale may not be used to foreclose a mortgage deed granted by a trustee of a trust if at the time the mortgage deed is given the real estate is used exclusively for residential purposes, the real estate has 4 or fewer residential units and one of the units is the principal residence of the owner of at least 1/2 of the beneficial interest in the trust. If the mortgage deed contains a statement that at the time the mortgage deed is given the real estate encumbered by the mortgage deed is not used exclusively for residential purposes, that the real estate has more than 4 residential units or that none of the residential units is the principal residence of the owner of at least 1/2 of the beneficial interest in the trust, the statement conclusively establishes these facts and the mortgage deed may be foreclosed by the power of sale. The method of foreclosure of real estate mortgages provided by this section is specifically subject to the order of priorities set out in section 6205.
Sec. 17. 14 MRSA §6321, 3rd ¶, as amended by PL 2007, c. 391, §9, is further amended to read:
The foreclosure must be commenced in accordance with the Maine Rules of Civil Procedure, and the mortgagee shall within 10 days of commencing the foreclosure also record a copy of the complaint or a clerk's certificate of the filing of the complaint in each registry of deeds in which the mortgage deed is or by law ought to be recorded and such a recording thereafter constitutes record notice of commencement of foreclosure. The mortgagee shall further certify and provide evidence that all steps mandated by law to provide notice to the mortgagor pursuant to section 6111 were strictly performed. The mortgagee shall certify proof of ownership of the mortgage note and produce evidence of the mortgage note, mortgage and all assignments and endorsements of the mortgage note and mortgage. The complaint must allege with specificity the plaintiff's claim by mortgage on such real estate, describe the mortgaged premises intelligibly, including the street address of the mortgaged premises, if any, which must be prominently stated on the first page of the complaint, state the book and page number of the mortgage, state the existence of public utility easements, if any, that were recorded subsequent to the mortgage and prior to the commencement of the foreclosure proceeding and without mortgagee consent, state the amount due on the mortgage, state the condition broken and by reason of such breach demand a foreclosure and sale. If a clerk's certificate of the filing of the complaint is presented for recording pursuant to this section, the clerk’s certificate must bear the title "Clerk's Certificate of Foreclosure" and prominently state, immediately after the title, the street address of the mortgaged premises, if any, and the book and page number of the mortgage. Service of process on all parties in interest and all proceedings must be in accordance with the Maine Rules of Civil Procedure. "Parties in interest" includes mortgagors, holders of fee interest, mortgagees, lessees pursuant to recorded leases or memoranda thereof, lienors and attaching creditors all as reflected by the indices in the registry of deeds and the documents referred to therein affecting the mortgaged premises, through the time of the recording of the complaint or the clerk's certificate. Failure to join any party in interest does not invalidate the action nor any subsequent proceedings as to those joined. Failure of the mortgagee to join, as a party in interest, the holder of any public utility easement recorded subsequent to the mortgage and prior to commencement of foreclosure proceedings is deemed consent by the mortgagee to that easement. Any other party having a claim to the real estate whose claim is not recorded in the registry of deeds as of the time of recording of the copy of the complaint or the clerk's certificate need not be joined in the foreclosure action, and any such party has no claim against the real estate after completion of the foreclosure sale, except that any such party may move to intervene in the action for the purpose of being added as a party in interest at any time prior to the entry of judgment. Within 3 days of recording a copy of the complaint or a clerk's certificate of the filing in the registry of deeds, the mortgagee shall provide a copy of the complaint or of the clerk’s certificate that prominently states, immediately after the title, the street address of the mortgaged premises, if any, and the book and page number of the mortgage to the municipal assessor of the municipality in which the property is located and, if the mortgaged premises is manufactured housing as defined in Title 10, section 9002, subsection 7, to the owner of any land leased by the mortgagor.
Sec. 18. 14 MRSA §6321-A is enacted to read:
§ 6321-A. Foreclosure mediation program
At a minimum, the form notice must contain the following:
(1) Are trained in mediation and all relevant aspects of the law;
(2) Have knowledge of community-based resources that are available in the judicial districts in which they serve;
(3) Have knowledge of mortgage assistance programs; and
(4) Are trained in using the relevant Federal Deposit Insurance Corporation forms and worksheets.
The court may establish a training program for mediators and require that mediators receive such training prior to being appointed;
(1) The performance of the program, including numbers of homeowners who are notified of mediation, who attend mediation and who receive legal counseling or legal assistance; and
(2) The results of the mediation process, including the number of loans restructured, number of principal write-downs, interest rate reductions and number of homeowners who default on mortgages within a year after restructuring, to the extent the court has available information;
Sec. 19. 14 MRSA §6322-A is enacted to read:
§ 6322-A. Notice to tenants of foreclosure judgment
The mortgagee shall, after entry of final judgment in favor of the mortgagee, provide a copy of the foreclosure judgment to any residential tenant of the premises. Upon request from a mortgagee, the mortgagor shall provide the name, address and other contact information for any tenant. A tenant who receives written notice under this section is not required to file any responsive pleadings and must receive written notice of all subsequent proceedings including all matters through and including sale of the property. The mortgagee shall provide written notice to the tenant if the mortgagee knows or should know by exercise of due diligence that the property is occupied as a residential rental unit. Notice may be provided to a tenant by first class mail and registered mail at the tenant's last known address only after the mortgagee has made 2 good faith efforts to provide written notice to the tenant in person. After providing the notice required by this section, and upon expiration of the redemption period, the mortgagee may institute an action for forcible entry and detainer pursuant to section 6001. This section may not be construed to prohibit an action for forcible entry and detainer in accordance with section 6001 for a reason that is not related to a judicial foreclosure action.
Sec. 20. 14 MRSA §6323, sub-§3 is enacted to read:
Sec. 21. 36 MRSA §4641-B, sub-§6 is enacted to read:
Sec. 22. 36 MRSA §4641-C, sub-§2, as repealed and replaced by PL 1993, c. 680, Pt. A, §31, is amended to read:
Sec. 23. 36 MRSA §4641-C, sub-§13, as enacted by PL 1993, c. 398, §4, is repealed.
Sec. 24. Phase-in of foreclosure mediation program. Notwithstanding the Maine Revised Statutes, Title 14, section 6321-A, subsection 10, beginning July 1, 2009, the Supreme Judicial Court may, in its discretion, implement the foreclosure mediation program established pursuant to Title 14, section 6321-A in those judicial districts that the court determines that the mediation program is most needed as long as the mediation program is available in all judicial districts by January 1, 2010. In any judicial district in which the foreclosure mediation program is implemented before January 1, 2010, the Supreme Judicial Court shall schedule mediation for those foreclosures filed on or after July 1, 2009 in which mediation is required in accordance with Title 14, section 6321-A, subsection 6 and may not issue a foreclosure judgment on those foreclosures until a mediator's report is received pursuant to Title 14, section 6321-A, subsection 13. Before February 15, 2010, the court shall report to the Joint Standing Committee on Insurance and Financial Services on the mediation program and recommend whether changes are needed. The Joint Standing Committee on Insurance and Financial Services may report out a bill to the Second Regular Session of the 124th Legislation based on the recommendations.
Sec. 25. Report on foreclosure mediation program. Before February 15, 2013, the Supreme Judicial Court shall report to the joint standing committee of the Legislature having jurisdiction over insurance and financial services matters on the foreclosure mediation program established pursuant to the Maine Revised Statutes, Title 14, section 6321-A. The court shall report on the performance of the program, including the number of foreclosure filings and foreclosure judgments and the number of foreclosure mediations and the results of the mediation process to the extent the court has available information. The court may consult with the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection in gathering information for the report required by this section. The court shall also recommend changes to the foreclosure mediation program, including whether the program should be modified, continued or repealed. The joint standing committee of the Legislature having jurisdiction over insurance and financial services matters may report out a bill to the First Regular Session of the 126th Legislature based on the court's report and recommendations.
Sec. 26. Appropriations and allocations. The following appropriations and allocations are made.
JUDICIAL DEPARTMENT
Courts - Supreme, Superior and District 0063
Initiative: Provides funds for the foreclosure mediation program, including funds for one Director, foreclosure mediation program position, 3 Assistant Clerk positions and one Administrative Assistant position.
OTHER SPECIAL REVENUE FUNDS | 2009-10 | 2010-11 |
POSITIONS - LEGISLATIVE COUNT
|
5.000 | 5.000 |
Personal Services
|
$297,231 | $319,602 |
All Other
|
$451,870 | $425,050 |
OTHER SPECIAL REVENUE FUNDS TOTAL | $749,101 | $744,652 |
JUDICIAL DEPARTMENT | ||
DEPARTMENT TOTALS | 2009-10 | 2010-11 |
OTHER SPECIAL REVENUE FUNDS
|
$749,101 | $744,652 |
DEPARTMENT TOTAL - ALL FUNDS | $749,101 | $744,652 |
PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF
Bureau of Consumer Credit Protection 0091
Initiative: Allocates funds for one Office Specialist II position and related costs to establish a statewide hotline to facilitate a mortgagor's communication with housing counselors and an outreach program in coordination with the Maine State Housing Authority including contracting with nonprofit organizations that provide housing counseling services and mortgage assistance and to collect and disseminate foreclosure information.
OTHER SPECIAL REVENUE FUNDS | 2009-10 | 2010-11 |
POSITIONS - LEGISLATIVE COUNT
|
1.000 | 1.000 |
Personal Services
|
$65,473 | $69,405 |
All Other
|
$159,534 | $136,631 |
OTHER SPECIAL REVENUE FUNDS TOTAL | $225,007 | $206,036 |
PROFESSIONAL AND FINANCIAL REGULATION, DEPARTMENT OF | ||
DEPARTMENT TOTALS | 2009-10 | 2010-11 |
OTHER SPECIAL REVENUE FUNDS
|
$225,007 | $206,036 |
DEPARTMENT TOTAL - ALL FUNDS | $225,007 | $206,036 |
SECTION TOTALS | 2009-10 | 2010-11 |
OTHER SPECIAL REVENUE FUNDS
|
$974,108 | $950,688 |
SECTION TOTAL - ALL FUNDS | $974,108 | $950,688 |
Emergency clause. In view of the emergency cited in the preamble, this legislation takes effect when approved.