Maine Foreclosure Law

Maine foreclosure law is applicable to mortgage contracts in default and may follow the judicial or strict foreclosure process. Generally, this means that lenders have to take the case to court before they can foreclose. The typical foreclosure timeline is 90 days.

The standard judicial process, which involves a lawsuit filed by the lender against the borrower, is followed only under special circumstances. In most cases, the lender carries out a strict foreclosure which is based on the state’s foreclosure doctrine.

The doctrine states that until the mortgage is fully paid, the lender legally owns the home. If the borrower defaults or breaches any terms in the contract before full payment, they will lose all rights to the property regardless of how much they have paid. When this happens, the lender can either put the home up for sale or take possession.

Once the foreclosure is declared, the borrower is given a Redemption Period during which he or she can pay off the home’s sale value and regain possession. The period is usually three months for mortgages originated after 1975, and 12 months for those signed before 1975.

If the lender has chosen to take possession of the home, they must hold on to it until the redemption period has passed. The foreclosure is finalized when the buyer fails to redeem the home during the said period. If the lender decides to sell the home, they must first file a lawsuit and wait for the redemption period to pass before they can arrange the sale. The sale will follow special procedures defined by the court handling the foreclosure.

Lenders can also seek a deficiency judgment, a personal claim against the borrower to recover the balance not covered by the foreclosure. However, the state limits the value of deficiency to the difference between the balance and the home’s legally appraised fair market value.

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