An Act To Preserve Home Ownership and Stabilize the Economy by Preventing Unnecessary Foreclosures ,
Maine Legislature, Session 124, LD 1418
Committee: Insurance and Financial Services
Sponsors: BOWMAN, ADAMS, BERRY, BRIGGS, BRYANT, CLARK, DRISCOLL, DUCHESNE, FLEMINGS, GILBERT, GOODE, LEGG, MAZUREK, MILLER, PERRY, PETERSON, PINGREE, PIOTTI, PRATT, PRIEST, RUSSELL, SCHATZ, STEVENS, THERIAULT, VALENTINO, WAGNER, ALFOND, BARTLETT, GOODALL, MARRACHE, MITCHELL, SIMPSON
Amends: 9-A MRSA §9, 14 MRSA §6021, 14 MRSA §6111, 14 MRSA §6112, 14 MRSA §6113, 14 MRSA §6203-A, 14 MRSA §6321, 14 MRSA §6321-A, 36 MRSA §4641-C

Legislative Document 
No. 1418 
H.P.994 
House of Representatives, April 7, 2009 
An Act To Preserve Home Ownership and Stabilize the Economy by 
Preventing Unnecessary Foreclosures 
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(EMERGENCY) 
Reference to the Committee on Insurance and Financial Services suggested and ordered 
printed. 
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Presented by RepresentativeTREAT of Hallowell. 
Cosponsored by Senator BOWMAN of York and 
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1?7'17ld£~{ 
MILLICENT M. MacFARLAND 
Clerk 
Representatives: ADAMS ofPOliland, BERRY of Bowdoinham, BRIGGS of Mexico, 
BRYANT of Windham, CLARK of Millinocket, CORNELL du HOUX of Brunswick, 
DRISCOLL of Westbrook, DUCHESNE of Hudson, EVES ofNOlih Berwick,FLEMINGS of 
Bar Harbor, FOSSEL ofAlna, GILBERT of Jay, GOODE of Bangor, LEGG of Kennebunk, 
MacDONALD of Boothbay, MAGNAN ofSto,ckton Springs, MAZUREK of Rockland, 
MILLER of Somerville, PERRY of Calais, PETERSON of Rumford, Speaker PINGREE of 
North Haven, PIOTTI of Unity, PRATT of Eddington, PRIEST of Brunswick, RUSSELL of 
POliland, SCHATZ of Blue Hill, STEVENS of Bangor, STUCKEY ofPOliland, THERIAULT 
of Madawaska, VALENTINO of Saco, WAGNER of Lyman, Senators: ALFOND of 
Cumberland, BARTLETT of Cumberland, GOODALL of Sag ada hoc, MARRACHE of 
Kennebec, President MITCHELL of Kennebec,. SCHNEIDER of Penobscot, SIMPSON of 
Androscoggin. 
Prilll~J "lit rccyckd PJPcr 
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, 
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therefore, 
lBe it enacted by the People of the State of Maine as follows: 
Sec. 1. 4 MJRSA §18-B, sub-§12 is enacted to read: 
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.. Mediation involving mortgage foreclosures on owner-occupied residential 
property. The mandatory foreclosure mediation program is a program within the Court 
Alternative Dispute Resolution Service. 
A. The Director of the Court Alternative Dispute Resolution Service shall administer 
the mandatory foreclosure mediation program established pursuant to Title 14, 
section 6321-A, subsection 2. 
B.o A mandatory foreclosure mediation program fund is established as a nonlapsing, 
dedicated fulld within the Administrative Office of the Courts. Fees collected for 
mediation services pursuant to Title 14, section' 6321-A, subsection 3 must be 
deposited in the fund. 
The Administrative Office of the Courts shall use the 
resources in the fund to cover the costs of providing mediation services as required 
under Title 14, section 6321-A, subsection 2. 
Sec. 2. 9-A MJRSA §9-404, as enacted by PL 1987, c. 396, §12, is amended to 
read: . 
Page) - 124LRI678(OI)-1 
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§9-404. Stay, modification, revocation or relief from judgment 
At any time after the entry of a judgment in favor of a creditor against a consumer in 
an action arising from a consumer credit transaction, the court, for cause and upon motion 
. of a. party or on its own motion, while such court retains jurisdiction, may modify, revoke 
or stay enforcement. of the judgment by order upon just and equitable conditions and 
continue, modify or revoke the order as the interests of justice may require. 
This 
provision may not be limited by the timelines for seeking relief from judgment pursuant 
to the Maine Rules of Civil Procedure. 
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Sec. 3. 9-A MRSA §9-405, sub-§5, as enacted by PL 1987, c. 396, §12, IS 
repealed. 
Sec. 4. 9-A MRSA §9-408 is enacted to read: 
§9-40S. Violation of the Maine Unfair Trade Practices Act 
Any violation of this article or any other provision of the Maine Consumer Credit 
Code constitutes a violation of the Maine Unfair Trade Practices Act. . 
Sec. 5. 14 MRSA' §2401, sub-§3, as amended by PL1993, c. 114, §2 and 
affected by §4, is further amended to read: 
3. Judgment required; recording and contents. The judgment in the proceeding 
must be signed by the judge ~md contain the following provisions: 
A. 
The names and addresses, if known, of all parties to the action, including the 
counsel of record; 
B. 
The docket number; 
C. . A finding that all parties have received notice of the proceedings in accordance 
with the applicable provisions of the Maine Rules of Civil Procedure and; if the 
notice was served or given pursuant to an order of a court, including service by 
publication, that the notice was served or given pursuant to the order; 
D. 
An adequate description of real estate involved; aruI: 
F. 
A certification to be signed by the clerk after the appeal period has expired, 
certifying that the applicable period has expired without action or the final judgment 
has been entered after remand following appeal.,.; and 
G. With regard to mortgage foreclosure actions, the title "judgment of foreclosure 
and sale," the street address of the real estate involved and the book and page number 
of the mortgage. 
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 judgn1ent 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 riot 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 register 
of deeds may not accept a.judgment of foreClosure and sale for recording 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. 6. 14 MRS A §6001, suh-§2-A is enacted to read: 
2-A. Foreclosure does not terminate a tenancy. A party that acquires property 
pursuant to foreclosUre of a mortgage, whether as a result ofa judicial or nonjudicial 
process, may only terminate a tenancy. with the mortgagor as set forth in the lease or 
rental agreement with the mortgagor or a tenancy at will as set forth in section 6002. 
Foreclosure does not terminate the tenancy agreement of a tenant with the mortgagor. 
Sec. 7. 14 MRSA §6021, sub-§1, as enacted by PL 1977,c. 401, §4, is repealed 
and the following enacted in,its place: 
1. Definitions. As used in this section, unless the context otherwise indicates,' the 
following terms have the following meanings. 
A. "Dwelling unit" means mobile homes, apartments, buildings or other structures, 
including the COmIIlon areas thereof, rented for human habitation. 
B. "Landlord" includes a mortgagee that has commenced a foreclosure action to 
enforce terms of a mortgage agreement either through a judicial or nonjudicial 
process. 
Sec. 8. 14 MRSA §6111, sub-§1,as amended by PL 1997, c.579, §1, is further 
amended to read: 
' 1. Notice; payment. With respect to mortgages upon residential property located in 
this State when the mortgagor is occupying all or a portion of the property as the 
mortgagor's primary residence and the mortgage secures a loan for personal, family or 
household use, the mortgagee may not accelerate maturity of the unpaid balance of the 
obligation or otherwise enforce the mortgage because of a default consisting of the 
mortgagor's failure to make any required payment, tax payment or insurance premium 
payment, by any method authorized by this chapter until at least.w 90 day!' after the date 
that written notice pursuant to subsection I-A is given by the mortgagee to the mortgagor 
and any cosigner against whom the mortgagee is enforcing the obligation secured by the 
mortgage at the last known addresses of the mortgagor and any cosigner that the 
mortgagor has the right to cure the default by full payment of all amounts that are due 
. without acceleration, including reasonable interest and late charges specified in ,the 
mortgage or note as well as reasonable attorney's fees. If the mortgagor tenders payment 
of the amounts before the date specified in the notic~, the mortgagor is restored to all 
rights under the mortgage deed as though the default had not occurred. 
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Sec. 9. 14 MRSA §6111, sub-§l-A is enacted to read: 
I-A. Contents of notice. A mortgagee shall include in the notice under subsection 1 
the following: 
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A. The mortgagor's right to cure the default as provided in subsection 1; 
B. An itemization of all past due amounts causing the loan to be in default; 
C. An itemization of any other charges that must be paid in order to satisfy the full 
obligations of the loan; 
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D. ,A statement that the mortgagor may have options available other than foreclosure, 
that the mortgagor may discuss available options with the mortgagee, the mortgage 
servicer or a counselor approved by the United States Department of Housing and 
Urban Development and that the mortgagor is encouraged to explore available 
options prior to the end of the right-to-cure period; 
E. 
The address, telephone number and other contact information for persons 
authorized to work with the mortgagor to avoid foreclosure, including, but not limited 
to, the mortgagee, the mortgage servicer and an agent of the mortgagee; 
F. 
The name, address, teiephone number and other contact information for all 
counseling agencies appro:ved by the United States Department of Housing and 
Urban Development operating to assist mortgagors in the State to avoid foreclosure; 
and 
G. A statemerit that all parties are required to participate in a mandatory mediation, 
as set £"01ih in section 6321-A, to explore options for avoiding foreclosure. 
Sec. 10. 14 MRSA §6111, sub-§3-A is enacted to read: 
3-A. Information; Maine State Housing Authority. Within 3 days of providing 
notice to the mortgagor as required by subsection l-A, the mortgagee shall file with the 
Maine State, Housing Authority, in electronic fonnat as designated by the .Maine State 
Housing Authority, information including: 
A. 
The name and address of the mortgagor and the date the notice required by 
subsection I-A was mailed to the mortgagor and the address, to which the notice was 
sent; 
B. 
The address, telephone-number and other contact information for persons 
authorized to wode with the mortgagor to avoid foreclosure, including, but not limited 
to, the mortgagee, the mortgage servicer and an agent of the mortgagee; and 
C. 
Other information, as permitted by state and federal law, requested of the 
mortgagor by the Maine State Housing Authority. 
Ona quarterly basis the Maine State Housing Authority shall transmit foreclosure data to 
the Department of Professional and Financi~tl Regulation for· the purposes of data 
collection and reporting to the Legislature pursuant to section 6113. 
Sec. 11. 14 MRSA §6111, sub-§4-A is enacted to read: 
2. 
4-A. Letter to mortgagor. Within 7 days of receiving electronic infoD11ation· from 
the mortgagee as set forth in subsection 3:.A, the Maine State Housing Authority shall 
send a notice to the mortgagor that includes a summary of the mOligagor's rights and 
available resources, including information concerning the mandatory· foreclosure 
mediation program as established in section 6321-A. 
Sec. 12. 14 MRSA §6111, suh-§5, as enacted by PL i 997, c. 579, §4, is amended 
to read: 
5. Exceptions. This section does not apply to: 
A. 
A mortgage subject to the provisions of Title 9-A, section 5-111 or a mOligage, 
other than a first lien mortgage, that is made subject to the provisions of Title 9-A, 
11. 
section 5-111 by agreement of the parties to the mortgage; or 
. 
B. A mortgage that contains a requirement that a reinstatement notice, a notice of 
right to cure or an equivalent notice be given to the mortgagor at least 30 days prior 
to accelerating the tnaturity of the unpaid balance of the obligation or othenvise 
enforcing the mortgage against the mOligagor, if the mortgagee gives such a notice to 
the mortgagor and to any cosigner against whom the mortgagee seeks to enforce the 
obligation secured by the mortgage; or 
C. 
A mortgage when the mOligagee accelerates the maturity of the unpaid balance 
of the obligation or otherwise enforces the mortgage on or after July 4, 1996 if the 
mortgage meets the requirements of paragraph A er-R 
Sec. 13. 14 MRSA §6112 is enacted to ~ead: 
§6112. Statewide hotline 
The Maine State Housing Authority shall establish a statewide hotline to facilitate a 
mortgagor's cOrrllnunication with housing counselors certified by the United States 
Department of Housing and Urban Development for the purposes of discussing options to 
avoid foreclosure. 
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. Sec. 14. 14 MRSA §6113 is enacted to read: 
§6113. Report 
The Department of Professional and Finaricial Regulation shall report quarterly to the 
joint standing committee of the Legislature having jurisdiction over insurance and 
financial services matters on the nurriber of foreclosure notifications received pursuant to 
section 6111, subsection 3-A. 
Sec. 15. 14 MRSA §6203-A, first 'ii, 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, 
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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 
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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 
publi~hed 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 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, coinmercial 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, 9f and must be served upon a tenant as a party in interest. 
The mortgagee shall provide such notice toa tenant if the mortgagee knows or should 
know by exercise of due diligence that the property is occupied as a rental unit. Notice 
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 al)d to the 
address as may be agreed upon in the mortgage,at least 21 days before the date of the 
sale under the powerin the mortgage. Notice may be served on a tenant by registered 
mail at the tenant's last known address only after the mortgagee has made 3 good faith 
efforts to serve the tenant in person. 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. -16. 
MRS A §6203-A, as amended by PL 1995, c. 106, §1, is further 
amended by adding after the first paragraph a new paragraph to read: 
A party that acquires property pursuant to foreclosure of a mortgage, whether as a 
result of a judicial or nonjudiCial process, may only terminate a tenancy with the 
mortgagor as. set forth in the lease or rental agreement with the mortgagor or a tenancy at 
will as set forth in section 6002. Foreclosure does not terminate the tenancy agreement of 
a tenant with the mortgagor. 
Sec. 17. 14 MRSA §6321, 2nd~, as amended by PL 2007, c.391, §9, is further 
amended to read: 
After breach of condition of any mortg~ge other' than one of the first priority, the 
mortgagee or any person claiming under the mortgagee may proceed for the purpose of 
foreclosure by a civil action against all parties in interest, except for parties in interest 
having a superior priority to the foreclosing mortgagee, in either the Superior Court or the 
District Court in the division in which the mortgag~d premises or any part of the 
mortgaged premises is located. In a foreclosure proceeding commenced by a mortgagee, 
whether by judicial or nonjudicial process, notice of process must be served upon a tenant 
as a party in interest. The tenant so named as a party in interest is not required to file any 
responsive pleadings and must receive notice of all subsequent proceedings including all 
matters through and including sale of the property. The mortgagee is obligated to provide 
notice to the tenant if it knows or should know by exercise of due diligence that the 
property is occupied as a rental unit. Parties in interest having a superior priority may not 
be joined nor will their interests be affected by the proceedings, but the resulting sale 
under section 6323 is of the defendant or mortgagor's equity of redemption only. The 
plaintiff shall notify the priority parties in interest of the action by sendil)g a copy of the 
complaint to the parties in interest by certified mail. 
Sec. 18. 14 MRSA §6321, 3rd ~, as amended by PL 2007, c.391, §9, is further 
. amended to read: 
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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 assigmnents and endorsements of the mortgage note 
and mortgage. 
The complaint must allege with specificity the plaintiffs claim by 
mortgage on such real estate, describe the mortgaged premises intelligibly, including the 
street address of the mortgaged premises, 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. A clerk's certificate presented 
for recording pursuant to this section may not be accepted by the registry of deeds unless 
the certificate bears the title "Clerk's Certificate of Foreclosure and Sale" and 
prominently states, immediately after the title, the street address of the mortgaged 
premises 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, tenants, lessees pursuant_ to recOrded leases or memoranda thereof, lienors 
and attaching credit9rs all as reflected by the indices in the registry of deeds and the 
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dacuments referred to. therein affecting the mart gaged premises, thraugh the time af the 
recording af the camplaint ar the clerk's certificate. Failure to. jain any party in interest 
does nat invalidate the actian nar any subsequent praceedings as to. thase jained. Failure 
af the martgagee to. jain, as a party in interest, the halder af any public utility easement 
recarded subsequent to. the martgage and priar to. cammencement af fareclasure 
proceedings IS deemed cansent by the martgagee to. that easement. Any ather party 
having a Claim to. the real estate whase claim is nat recarded in the registry af deeds as af 
the time af recarding af the capy af the camplaint ar the clerk's certificate need nat be 
jained in the fareclasure actian, and any such party has no. claim against the real estate 
after completianaf the fareclasure sale, except that any such party may mave to. 
intervene in the actian far the purpase af being added as a party in interest at any time 
prior to. the entry af judgment. 
Sec. 19. 14 MRS A §6321, as amended by PL 2007, c. 391, §9, is further amended 
by adding at the end a new paragraph to. read: 
18. 
Up an cammencement af a fareclasure praceeding, by either judicial ar nanjudicial 
process, the martgagor and martgagee are jaintly liable for maintenance and repair af the 
premises pursuant to. sectian 6021. If the martgagar fails to. maintain the premises as 
required by the implied warranty af fitness far human habitatian as established in sectian 
6021 then the martgagee shall ensure that the property remains in campliance. If either 
the martgagar ar martgagee fails to. maintain the premises as requIred by the implied 
warranty af fitness far human habitatian then the tenant may petitian the caurt with 
jurisdictian aver the fareclasure praceedings to. enfarce the tenant's rights pursuant to. 
sectian 6021. In the case af a nanjudicial fareclasure pracess the tenant may petitian any 
caurt af campetent jurisdictian far said relief. In any such actian braught by the tenant, 
the caurt in its discretian may establish an escrow accaunt into. which the tenant may 
make escrow payments and the caurt may distribute the funds as necessary to. maintain 
the property pursuant to sectian 6021. The caurt may also. direct that payment be made to. 
the martgagee and direct the martgagee to. expend such funds as are necessary to. maintain 
the premises as required by sectian 6021. 
,Sec. 20. 14 MRSA §6321-A is enacted to. read: 
§6321-A .. Mandatory foreclosure mediation program 
1. Definitions. As used in this sect ian, unless the cantext atherwise indicates, the 
fallawing terms have the fallawing meanings. 
A. "Caurt" means the Supreme Judicial Caurt. 
B. "Pragram" means the mandatary fareclasure mediatian program. 
2. Notice; summons and complaint; foreclosure proceedings. When a plaintiff 
cammences an actian fat the foreclasure af a martgage an an awner-accupied residential 
real praperty, the plaintiff shall give natice to the defendant af the mandatary fareclasure 
mediatian program established in subsectian 3 by attaching to. the front af the fareclasure 
camplaint that is served an the defendant a capy af the natice af the availability af 
fareclasure mediatian, in a farm as prescribed by the Supre!lle Judicial Caurt. 
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3. Mandatory foreclosure mediation program established. Under. the authority 
grant"ed in Title 4, section IS-B, the Supreme Judicial Court shall adopt rules to establish 
a mandatory foreclosure mediation program within the Court Alternative Dispute 
Resolution Service to provide mediation in actions for foreclosure of mortgages on 
owner-occupied residential property. The program must address all issues of foreclosure, 
including but not limited to reinstatement of the mortgage, modification of the loan and 
restructuring of the mortgage debt. Mediations conducted pursuant to the program must 
utilize the calculations, assumptions and forms that are established by the Federal Deposit 
Insurance Corporation and published in the Federal Deposit Insurance Corporation Loan 
Modification Program Guide as set out on the Federal Deposit Insurance Corporation's 
publicly accessible website. 
Communications during mediation are confidential and may not be used in subsequent 
legal proceedi!lgs. 
The plaintiffs or defendant's rights in the foreclosure action are not waived by 
participating in the program. 
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4. Provisions of mediation services; filing and fees. The Court Alternative Dispute 
Resolution Service, established in Title 4, section IS-B, shall provide mediation services 
under this section. The Court Alternative Dispute Resolution Service shall: 
A. Assign mediators who: 
(1) Are trained in mediation and all relevant aspects of the law; 
(2) Have kno~ledge of community-based resources that are available in the 
j'udicial districts in which they serve; 
(3) Have knowledge of mortgage assistance programs; and 
. (4) Are trained in using the relevant Federal Deposit Insurance COfporation 
forms and worksheets. 
The court may establish a training program for mediators and require that mediators 
receive such training prior to being appointed; . 
B. 
Report quarterly to the joint standing committee of the Legislature having 
jurisdiction over' insurance and fmancial services matters and the joint standing 
committee of the Legislature having jurisdiction over judiciary matters on: 
(1) The performance of the program, including numbers of homeowners who are 
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notified of mediation, who attend mediation and who receive legal counseling or 
legal assistance; and 
(2) 
The outcome, 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; and 
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C. Establish a fee for mediation services to be paid for by the plaintiff. 
5. 'Stay of foreclosure process. Further action in the foreclosure proceeding may 
not be pursued during the mediation's pendency and the court process is stayed during the 
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mediation process under this section. The foreclosure process may COlmnence again only 
upon certification and proof of evidence to the court that requirements under the program 
were satisfied, as detemuned by the court. All fees and costs related to the foreclosure 
and delinquency remain fixed from the date of the scheduled mediation until the date that 
the mediator's report pursuant to subsection 10 is filed. 
6. Application of mediation provisions to ongoing foreclosure proceedings. The 
requirements of this section apply to foreclosures filed after the effective date of this 
section and to owner-occupied residential properties in the foreclosure process but not 
scheduled for sale before the effective date of this section .. Nothing in this section 
precludes the court from exercising its discretion to require mediation for other 
properties, including but not limited to owner-occupied residential properties already 
scheduled for sale or other multifamily housing properties. 
7. 
Preforeclosure mediation. The court maintains the discretion to reqUIre 
mediation prior to the filing of the foreclosure action as long as the mediation satisfies the 
standards and requirements of this section. The court's discretion includes the authority 
to require additional notice to defendants prior to a plaintiffs filing of the foreclosure 
complaint. 
8. Parties to mediation. A mediator shall include in the mediation process under 
this section any person the mediator determines is necessary for effective mediation. 
Mediation and appearance in person is mandatory for: 
A. The mortgagee, .who has the authority to agree to a proposed settlement, loan 
modification or dismissal of the loan, except that the mortgagee may p~rlicipate by 
telephone; . 
B. The defendant; 
C. Counsel for the plaintiff and the defendant; and 
D. Counsel for the defendant, if represented. 
9. Good faith effort. If the ~ourt finds that either party failed to make a good faith 
effort to mediate, the court may impose sanctions that include disnUssal of the foreclosure 
action with prejudice and costs and fees. 
10. Report. The mediator's· report must include the certification in a manner as 
determined by the court that the parties completed in full and in good faith the Net 
Present Value Worksheet in the Federal Deposit Insurance COIporation Loan 
Modification Program Guide. The mediator shall retain a copy of the worksheet until 
completion of the foreclosure proceedings. If the report is not the result of a settlement or 
disnUssal of the case, the report must include the outcomes of the Net Present Value 
Worksheet. 
11. 
Waive mediation. 
With the court's approval, a· defendant may waive the 
mediation requirement under this section under the following conditions: 
A. The defendant desires foreclosure because of personal circumstances and has 
certification by an independent 3rd-party counselor or attorney that the' defendant 
understands what it means to waive the mediation; and 
B. The. waiver includes language that prohibits the homeowner from signing away 
any claim related to the mortgage origination. 
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Any waiver or" mediation agreed to by the defendant must include an agreement by the 
plaintiff to waive any deficiency that may result upon sale of the property. 
Sec. 21. 36 MRSA §4641-C, sub-§2, as repealed and replaced by PL1993, c. 
680, Pt. A,§31, is amended to read: 
2. Mortgage deeds. Mortgage deeds, discharges of mortgage deeds and partial 
releases of mortgage deeds, deeds from a mortgagor to a mortgagee in lieu of foreclosure 
and deeds from a mortgagee to itself at a public sale held' pursuant to Title 14, section 
~. In the event of a deed to a 3rd party at such a public sale, the tax imposed upon the 
grantor by section 4641-Aapplies only to that portion of the proceeds of sale that exceeds 
the sums required to satisfy in full the claims of the mortgagee and all junior claimants 
originally made parties in interest in the proceedings or having subsequently intervened in 
the proceedings as established by the judgment of foreclosure and sale, The tax must be 
deducted from the excess proceeds; 
Sec. 22. 36 MRSA §4641-C, sub-§13, as enacted by PL 1993, c. 398, §4, is 
repealed. 
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, 21 
Sec. 23. Rules. The Supreme Judicial Court shall adopt rules pursuant to the 
Maine Revised Statutes, Title 14, section 6321-A, subsection 3 no later than 60 days after 
the effective date of this Act. 
' 
The court shall also amend its existing rules to remove Rule 16B(b)(7), which exempts 
actions for nonpayment in mortgage foreclosures from the court's requirements for 
, '26 
alternative dispute resolution. 
Sec. 24. Outreach program. The Maine State Housing Authority shall conduct a 
pilot project regarding the coordination of an outreach program to help families with their 
housing needs through the NeighborWorks Program with the intent of expanding the 
outreach program statewide. 
Sec. 25. Collaboration with community organizations. The Maine Supreme 
Court and the Maine State Housing Authority shall facilitate outreach with community 
organizations to help increase mortgagors' awareness of options other than foreclosure. 
Emergency clause. 
In view of the emergency cited in the preamble, this 
legislation takes effect when approved. 
SUMMARY 
Tins bill amends the laws pertaining to foreclosures. 
Page II - 124LR1678(Ol)-1 
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1. 
It establishes the mandatory foreClosure mediation program within the Court 
Alternative Dispute Resolution Service . 
2. It makes violation of provisions of the Maine Consumer Credit Code a violation of 
the Maine Unfair Trade Practices Act. 
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. 
3. It requires that the words "judgment of foreClosure and sale," the street address of 
the real estate involved. and the book and page number of the mortgage be on a 
foreClosure judgment when filed in the registry of deeds. 
4. It Clarifies that a foreClosure on a rental property does not terminate a tenancy. 
5. 
It describes what a mortgagee must inClude ill a notice of foreClosure to a 
0 
. mortgagor. 
6. It requires a mortgagee to provide certain information to the Maine State Housing 
Authority about foreClosure, which the Maine State Housing Authority shall transmit to 
the Department of Professional and Financial Regulation. 
7. It requires the Maine State Housing Authority to notify a mortgagor who is a party 
to a foreClosure about the mortgagor's rights and available resources as they relate to the 
foreClosure as well as the mandatory foreClosure mediation program. .It also requires the 
Maine State Housing Authority to establish a statewide hotline to help mortgagors 
communicate with housing counselors certified by the United States Department of 
Housing and Urban Development. 
. 
8. 
It requires the Department of Professional and Financial Regulation to report 
quarterly on the number of foreClosure notifications received to the joint standing 
committee of the Legislature having jurisdiction over insurance and financial services 
matters. 
9. It amends the procedure and notice for foreClosures. 
10. It amends the procedure for commencement of foreClosure by civil action.