Maine Foreclosure Laws

Questions

Answers

How are mortgage liens treated in Maine?

Maine is known as a lien theory state where the property acts as security for the underlying loan. The document that places the lien on the property is called a mortgage. Maine has a power of sale provision which relates to commercial mortgages only.

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How are Maine mortgages foreclosed?

In Maine, the lenders go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon. The bower must be provided with 30 days notice of any foreclosure sale and the proposed sale date must be advertised for three (3) successive weeks prior to the sale date.

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What are the legal instruments that establish a Maine mortgage?

The documents are known as the mortgage, note, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement.  A mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

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How long does it take to foreclose a property in Maine?

Depending on the court schedule, it usually takes approximately 180-200 days to effectuate an uncontested foreclosure. This process may be delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files for bankruptcy.

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Is there a right of redemption in Maine?

Maine has a statutory right of redemption, which allows a party whose property has been foreclosed to reclaim that property by making payment in full of the sum of the unpaid loan plus costs. There is a time limit to undertake such redemption of one (1) year or three (3) months depending on when the mortgage was executed. The right of redemption must expire before certain actions are taken to complete the foreclosure sale.

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Are deficiency judgments permitted in Maine?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage secures.  This means that the borrower still owes the lender for the difference between what the property sold for at the sale and the amount of the original loan. Deficiency judgments are limited by the fair market value of the property sold at foreclosure as determined by appraisal.

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What statutes govern Maine foreclosures?

The laws that govern Maine foreclosures are found in Maine Revised Statutes, Title 14, part 4, Chapter 403 (Title to Real Estate by Levy and Execution).


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