An Act To Ensure the Timely and Proper Completion of Residential Foreclosures
Maine Legislature, Session 129, LD 1175
Committee: Judiciary
Sponsors: FOLEY
Amends: 14 MRSA §6323, 14 MRSA §6324

Legislative Document
No. 1175
S.P. 361
In Senate, March 12, 2019
An Act To Ensure the Timely and Proper Completion of Residential 
Foreclosures
Reference to the Committee on Judiciary suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator FOLEY of York.  (BY REQUEST)
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 public 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.  For any period of adjournment under 
this subsection for the public sale of a mortgaged condominium unit, the mortgagee shall 
pay the condominium association the regular monthly condominium assessment assessed 
against the unit for the period between the original sale date and the date of the final sale.  
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 public 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 30 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 as 
long as 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 to a party entitled to the surplus as determined in the 
judgment of foreclosure, and the payment must 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 provides that for any 
period of adjournment for the sale of a mortgaged condominium unit, the mortgagee is 
required to pay the condominium association the regular monthly condominium 
assessment assessed against the unit for the period between the original sale date and the 
date of the final sale.  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.