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Two New Maine Laws Related to Mortgages

Financial Institutions should be aware of two recent amendments to Maine’s laws related to mortgages, both of which became effective on September 27, 2011.  One new law requires mortgagees to provide mortgagors with a copy of the release of mortgage after recording.  The other law enables mortgagors to recover attorneys fees in certain foreclosure proceedings where the mortgagee is not the prevailing party.  Here are the details.

Title 33, Section 551 of the Maine Revised Statutes was amended by PL 2011, ch. 146, “An Act to Require a Mortgagee to Provide the Original Release of Mortgage to the Mortgagor after the Release is Recorded.”  In addition to recording a release with the registry of deeds within sixty days of full performance of a mortgage, the mortgagee must now also mail a copy of the release by first class mail to the mortgagor within thirty days of receiving the recorded release.  Failure to satisfy this new obligation will result in the mortgagee’s liability to “any aggrieved party” for $500 in exemplary damages as well as for court costs and attorney’s fees in the enforcement of the obligation.  Under Section 551, the term “mortgagee” includes both the “owner of the mortgage at the time it is satisfied” and “any servicer who receives the final payment satisfying the debt.”

Title 14, Section 6101 of the Maine Revised Statutes was amended by PL 2011, ch. 269, “An Act to Provide Prevailing Mortgagors Attorney’s Fees in the Foreclosure Process.”  This amendment allows the court in a foreclosure action to (i) order the mortgagee to pay the mortgagor’s reasonable court costs and attorney’s fees and (ii) deny all or a part of an award of the mortgagee’s court costs and attorney’s fees, in the event the mortgagee “does not prevail” in the foreclosure action or there is evidence to show that the action was not brought by the mortgagee in good faith.  The phrase “does not prevail” is not defined, except that the statute explicitly excludes stipulations of dismissal, agreed-upon motions to dismiss without prejudice to facilitate settlement, and successful mediations under the State’s foreclosure mediation program.

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