An Act To Require Residential Mortgage Loan Servicers To Act in Good Faith in Dealings with Homeowners
Sec. 1. 14 MRSA §6113 is enacted to read:
§ 6113. Mortgage servicer duty of good faith
(1) Receiving scheduled periodic payments from an obligor pursuant to the terms of a mortgage described in section 6111, subsection 1, including amounts for escrow accounts;
(2) Making or advancing payments to the owner of the loan or other 3rd parties with respect to the amounts received from the obligor pursuant to a loan servicing contract; and
(3) Evaluating obligors for loss mitigation or loan modification options.
(1) Owes payment or performance of an obligation;
(2) Has provided property other than the mortgaged property to secure payment of the obligation;
(3) Has granted a mortgage interest with respect to the mortgaged property; or
(4) Is otherwise accountable in whole or in part for payment of the obligation.
(1) Receiving a periodic payment from an obligor under the terms of an obligation, including an amount received for an escrow account;
(2) Making or advancing payments to the owner of an obligation on account of an amount due from the obligor under a mortgage servicing loan document or a servicing contract;
(3) Making a payment to the obligor under a home equity conversion mortgage or reverse mortgage;
(4) Evaluating the obligor for loss mitigation or communicating with the obligor with respect to loss mitigation;
(5) Collecting funds from a homeowner for deposit into an escrow account and making payments out of an escrow account; and
(6) Taking any other action with respect to an obligation that affects the obligor's payment or performance of the obligation or that relates to the enforcement of the obligation.
(1) The frequency and persistence of violations by the servicer;
(2) The nature of the violations;
(3) The extent to which the violations were intentional; and
(4) The extent to which the actions that constitute violations are prohibited by state or federal laws, rules or regulations, and the extent to which such actions constitute violations by the servicer of any consent judgments to which it is a party.
(1) The servicer may not charge the loan owner for, or add to the amount of the obligation, any attorney's fees or costs incurred as a result of the violation or any other attorney's fees or costs incurred before the servicer cures the violation; and
(2) The court shall order the servicer to pay to the obligor the obligor's costs incurred in the action and reasonable attorney's fees as determined by the court.
Sec. 2. 14 MRSA §6321-A, sub-§11, as amended by PL 2009, c. 476, Pt. B, §6 and affected by §9, is further amended to read:
A mortgage servicer as defined in section 6113, subsection 1, paragraph B participating in the mediation process submits to the jurisdiction of the court with respect to the power of the court to sanction parties who fail to participate in the mediation process in good faith as required by section 6113, subsection 2.
Sec. 3. 14 MRSA §6321-A, sub-§12, as enacted by PL 2009, c. 402, §18, is amended to read:
Sec. 4. 14 MRSA §6321-A, sub-§13, as amended by PL 2013, c. 521, Pt. F, §2, is further amended to read:
SUMMARY
This bill requires servicers of residential mortgage loans to act in good faith when dealing with homeowners who are the borrowers under those loans. The bill changes the foreclosure mediation program to allow the courts to directly sanction a mortgage servicer when the servicer's conduct evidences a failure to mediate in good faith. The bill requires an order of sanctions to identify the name of the mortgage servicer so that, when a servicer is found to have failed to act in good faith, the court may take into account previous misconduct in fashioning a sanction sufficient to deter continuation of the misconduct in the same case or in future cases.