An Act To Ensure the Timely and Proper Completion of Residential Foreclosures
Maine Legislature, Session 128, LD 1355
Committee: Judiciary
Sponsors: CARPENTER
Amends: 14 MRSA §6323, 14 MRSA §6324

Legislative Document
No. 1355
S.P. 463
In Senate, April 6, 2017
An Act To Ensure the Timely and Proper Completion of Residential 
Foreclosures
Reference to the Committee on Judiciary suggested and ordered printed.
HEATHER J.R. PRIEST
Secretary of the Senate
Presented by Senator CARPENTER of Aroostook.
Be it enacted by the People of the State of Maine as follows: 
Sec. 1.  14 MRSA §6323, sub-§1, as amended by PL 2013, c. 521, Pt. C, §1, is 
further amended to read: 
1.  Procedures for all civil actions.  Upon expiration of the period of redemption, if 
the mortgagor or the mortgagor's successors, heirs or assigns have not redeemed the 
mortgage, any remaining rights of the mortgagor to possession terminate, and the 
mortgagee shall cause notice of a public sale of the premises stating the time, place and 
terms of the sale to be published once in each of 3 successive weeks in a newspaper of 
general circulation in the county in which the premises are located, the first publication to 
be made not more than 90 days after the expiration of the period of redemption. Except 
when otherwise required under 12 Code of Federal Regulations, Section 1024.41 or any 
successor provision, the public sale must be held not less than 30 days nor more than 45 
days after the first date of that publication.  Except for sales of premises that the court has 
determined to be abandoned pursuant to section 6326, the mortgagee may adjourn the 
public sale may be adjourned, for any time a period not exceeding 7 30 days and from 
time to time until a sale is made, by as long as announcement of the new sale date is made 
to those present at each the adjournment.  The sale may be adjourned for additional 
periods of time upon written agreement of the mortgagee and mortgagor, as long as 
notice is given to all persons present at the initial sale, or upon court order for good cause 
shown and upon such terms as may be specified by the court.  For sales of premises that 
the court has determined to be abandoned pursuant to section 6326, the public sale may 
be adjourned once for any time not exceeding 7 days, except that the court may permit 
one additional adjournment for good cause shown.  Adjournments may also be made in 
accordance with the requirements of 12 Code of Federal Regulations, Section 1024.41 or 
any successor provision.  The mortgagee, in its sole discretion, may allow the mortgagor 
to redeem or reinstate the loan after the expiration of the period of redemption but before 
the public sale.  The, and, in connection with any such redemption or reinstatement, the 
mortgagee may convey the property to the mortgagor or execute a waiver of foreclosure, 
and all other rights of all other parties remain as if no foreclosure had been commenced.  
The sale must be conducted, at the election of the mortgagee, at the mortgaged premises 
or at the state courthouse or the office of an attorney located in the county in which the 
mortgaged property is located.  The mortgagee shall sell the premises to the highest 
bidder at the public sale and deliver a deed of that sale and the writ of possession, if a writ 
of possession was obtained during the foreclosure process following the period of 
redemption, to the purchaser.  The deed conveys the premises free and clear of all 
interests of the parties in interest joined in the action.  The mortgagee or any other party 
in interest may bid at the public sale.  If the mortgagee is the highest bidder at the public 
sale, there is no obligation to account for any surplus upon a subsequent sale by the 
mortgagee.  Any rights of the mortgagee to a deficiency claim against the mortgagors are 
limited to the amount established as of the date of the public sale.  The date of the public 
sale is the date on which bids are received to establish the sales price, no matter when the 
sale is completed by the delivery of the deed to the highest bidder.  If the property is 
conveyed by deed pursuant to a public sale in accordance with this subsection, a copy of 
the judgment of foreclosure and evidence of compliance with the requirements of this 
subsection for the notice of public sale and the public sale itself must be attached to or 
included within the deed, or both, or otherwise be recorded in the registry of deeds within 
days of the date of the conveyance. 
Sec. 2.  14 MRSA §6324, as amended by PL 2003, c. 20, Pt. T, §10, is further 
amended to read: 
§6324.  Proceeds of sale 
After first deducting the expenses incurred in making the sale, the mortgagee shall 
disburse the remaining proceeds in accordance with the provisions of the judgment.  The 
mortgagee shall file a report of the sale and the disbursement of the proceeds therefrom 
with the court and shall mail a copy to the mortgagor at the mortgagor's last known 
address. The report of sale must show the amount of the foreclosure judgment determined 
by the court and must itemize all additions to the foreclosure judgment.  In the event that 
the sale generates a surplus of money beyond the amount owed to the mortgagee, the 
mortgagee shall, no later than the time of the filing of the report of sale, pay this surplus 
over to the mortgagor or other party entitled to it as determined by the foreclosure 
judgment.  This report need not be accepted or approved by the court, provided that the 
mortgagor or any other party in interest may contest the accounting by motion filed 
within 30 days of receipt of the report opposing the mortgagee's motion for a deficiency 
judgment in accordance with the Maine Rules of Civil Procedure, but any such challenge 
may be for money only and does not affect the title to the real estate purchased by the 
highest bidder at the public sale.  Any Upon order of the court after motion of the 
mortgagee filed with the report of sale and served upon the mortgagor and all other 
parties in interest in accordance with the Maine Rules of Civil Procedure, any deficiency 
must be assessed against the mortgagor and an execution must be issued by the court 
therefor.  In the event the mortgagee has been the purchaser at the public sale, any 
deficiency is limited to the difference between the fair market value of the premises at the 
time of the public sale, as established by an independent appraisal, and the sum due the 
mortgagee as established by the court with interest plus the expenses incurred in making 
the sale.  Any surplus must be paid to the mortgagor, the mortgagor's successors, heirs or 
assigns in the proceeding or other party entitled to the surplus as determined in the 
judgment of foreclosure, the payment to be made no later than the time of the filing of the 
report of sale.  If the mortgagor has not appeared personally or by an attorney, the surplus 
must be paid to the clerk of courts, who shall hold the surplus in escrow for 6 months for 
the benefit of the mortgagor, the mortgagor's successors, heirs or assigns and, if the 
surplus remains unclaimed after 6 months, the clerk shall pay the surplus to the Treasurer 
of State to be credited to the General Fund until it becomes unclaimed under the Uniform 
Unclaimed Property Act, and report and pay it to the State in accordance with that Act. 
The report of sale required by this section must be filed with the court within 45 days 
of the date of the public sale, without regard to the actual date of conveyance following 
the sale.  In the event that the report is not filed with the court within this 45-day period, 
the mortgagee has no right to seek a deficiency judgment, and the mortgagor or other 
party claiming entitlement to any portion of any surplus proceeds from the sale may file a 
motion for an accounting of the sale proceeds and for the turnover of any surplus.  The 
court shall order that the mortgagee pay to the mortgagor or party in interest that prevails 
on such a motion that party's attorney's fees and costs incurred in connection with such a 
motion.  Upon a showing of good cause by the mortgagee, made by motion filed before 
the expiration of the deadline stated in this section for the filing of the report of sale, the 
court may extend the deadline for the filing of the report of sale for an additional period 
of time as the court considers appropriate. 
SUMMARY 
This bill makes changes to the laws governing the adjournment of a public sale of 
foreclosed premises and where such a sale must be conducted.  It clarifies several aspects 
of the post-foreclosure sale process regarding the filing of reports of sale and mandates 
that the report be filed within 45 days of the sale.  If a foreclosure sale produces proceeds 
beyond those payable to the mortgagee, the bill requires the mortgagee to pay the surplus 
to the mortgagor or other party entitled to it no later than the time of the filing of the 
report of sale and provides a means for the party entitled to the surplus to obtain a court 
order for the turnover of the surplus if the mortgagee fails to do so.  The bill clarifies that, 
after the redemption period has expired, but before a sale, a mortgagee may agree with a 
mortgagor to a reinstatement of the mortgage, and that the mortgagee may, in connection 
with the reinstatement, waive the foreclosure judgment and restore all parties to the action 
to the positions that they were in before any foreclosure.