An Act To Clarify the Definition of "Mortgage Servicer" in the Laws Governing Mortgage Foreclosures
Maine Legislature, Session 130, LD 1066
Committee: Judiciary
Sponsors: BAILEY, CARNEY, HARNETT
Amends: 14 MRSA §6113, 14 MRSA §6321-A

Legislative Document
No. 1066
S.P. 334
In Senate, March 11, 2021
An Act To Clarify the Definition of "Mortgage Servicer" in the 
Laws Governing Mortgage Foreclosures
Reference to the Committee on Judiciary suggested and ordered printed.
DAREK M. GRANT
Secretary of the Senate
Presented by Senator BAILEY of York.
Cosponsored by Senator: CARNEY of Cumberland, Representative: HARNETT of Gardiner.
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  14 MRSA §6113, as enacted by PL 2019, c. 363, §1, is amended to read:
§6113.  Mortgage servicer duty of good faith
1.  Definitions.  As used in this section, unless the context otherwise indicates, the 
following terms have the following meanings.
A.  "Good faith" means honesty in fact and the observance of reasonable commercial 
standards of fair dealing.
B.  Except as provided in subsection 5, "mortgage servicer" means a person that is 
responsible for:
(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.
B-1.  Except as provided in subsection 5, "mortgage servicer" means a person 
responsible for servicing an obligation, including a person that holds or owns an 
obligation or originates a mortgage loan if the person also services the obligation.
C.  "Obligation" means a debt or other duty or liability of an obligor secured by a 
mortgage of the type described in section 6111, subsection 1.
D.  "Obligor" means a person that:
(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.
E.  Except as provided in subsection 5, "servicer" means a person responsible for 
servicing an obligation, including a person that holds or owns an obligation or 
originates a mortgage loan if the person also services the obligation.
F.  "Servicing" means any combination of the following:
(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.
2.  Duty of good faith.  A mortgage servicer shall act in good faith toward an obligor 
in the servicing of an obligation secured by a mortgage and in any foreclosure action 
relating to such an obligation.
3.  Effect of violation during foreclosure.  If during a foreclosure action a mortgage 
servicer controlling or managing the action on its own behalf or on behalf of the owner of 
the obligation subject to foreclosure is shown to have committed a violation of its duty of 
good faith under subsection 2, the court may dismiss the action, stay the action on 
appropriate terms and conditions or impose other appropriate sanctions until the violation 
is cured.
4.  Remedies for violation.  The following are remedies for a violation of the duty of 
good faith under subsection 2.
A.  A homeowner or obligor injured by a violation of the duty of good faith may bring 
an action against the mortgage servicer for all actual damages sustained by the 
homeowner or obligor.
B.  In addition to the damages recoverable under this subsection, the court may award 
a homeowner or obligor statutory damages not exceeding $15,000 for a pattern or 
practice of the mortgage servicer's violating the duty of good faith.  In determining 
whether to award statutory damages and the amount of statutory damages, the court 
shall consider all relevant factors, including:
(1)  The frequency and persistence of violations by the mortgage 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 mortgage servicer of any consent judgments to which it is a party.
C.  If the court determines during a foreclosure action or an independent action for 
damages that there has been a violation of the duty of good faith:
(1)  The mortgage 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 mortgage servicer cures the 
violation; and
(2)  The court shall order the mortgage servicer to pay to the obligor the obligor's 
costs incurred in the action and reasonable attorney's fees as determined by the 
court.
5.  Exclusion.  The terms term "mortgage servicer" and "servicer" defined in subsection 
do does not include a supervised financial organization as defined in Title 9‑A, section 
1‑301, subsection 38‑A; a financial institution holding company as defined in Title 9‑B, 
section 1011, subsection 1; a mutual holding company as defined in Title 9‑B, section 1052, 
subsection 2; a credit union service organization as defined in 12 Code of Federal 
Regulations, Section 712.1; a subsidiary of a supervised financial organization, financial 
institution holding company, mutual holding company or credit union service organization; 
or the Maine State Housing Authority.
Sec. 2.  14 MRSA §6321-A, sub-§11, as corrected by RR 2019, c. 1, Pt. A, §14, is 
amended by amending the first blocked paragraph to read:
A mortgage servicer as defined in section 6113, subsection 1, paragraph B B-1 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 amended by PL 2019, c. 363, §3, is further 
amended to read:
12.  Good faith effort.  Each party and each party's attorney, if any, must be present at 
mediation as required by this section and shall make a good faith effort to mediate all issues.  
If any party or attorney fails to attend or to make a good faith effort to mediate, the court 
may impose appropriate sanctions.  A mortgage servicer as defined in section 6113, 
subsection 1, paragraph B B-1 participating in the mediation process shall participate in 
good faith as required by section 6113, subsection 2.  In determining the nature and extent 
of appropriate sanctions, the court shall consider the need for deterrence of similar future 
conduct by the entity being sanctioned and by others and may take into account prior orders 
imposing sanctions upon the sanctioned party, whether in the same case or in other previous 
cases.  The imposition of any sanction does not bar any independent action by a defendant 
to seek recovery with respect to the actions giving rise to the order of sanctions.
Sec. 4.  14 MRSA §6321-A, sub-§13, as amended by PL 2019, c. 363, §4, is further 
amended to read:
13.  Report.  A mediator must complete a report for each mediation conducted under 
this section.  The mediator's report must indicate in a manner as determined by the court 
that the parties completed in full the Net Present Value Worksheet in the Federal Deposit 
Insurance Corporation Loan Modification Program Guide or other reasonable 
determination of net present value.  If the mediation did not result in the settlement or 
dismissal of the action, the report must include the outcomes of the Net Present Value 
Worksheet or other determination of net present value.  As part of the report, the mediator 
may notify the court if, in the mediator's opinion, either party failed to negotiate in good 
faith.  The mediator's report must also include a statement of all agreements reached at 
mediation, with sufficient specificity to put all parties on notice of their obligations under 
agreements reached at mediation, including but not limited to a description of all documents 
that must be completed and provided pursuant to the agreements reached at mediation and 
the time frame during which all actions are required to be taken by the parties, including 
decisions and determinations of eligibility for all loss mitigation options.  The mediator's 
report must identify the name of any mortgage servicer as defined in section 6113, 
subsection 1, paragraph B B-1 that participates in the mediation process, and any order of 
sanctions must likewise identify the name of the mortgage servicer.
SUMMARY
This bill amends the law governing a mortgage servicer's duty to act in good faith by 
repealing the current definition of "mortgage servicer" and replacing it with the current 
definition of "servicer."