An Act To Create Transparency in the Mortgage Foreclosure Process

Sec. 1. 14 MRSA §6321, first and 2nd ¶¶,  as amended by PL 2007, c. 391, §9, are further amended to read:

After breach of condition in a mortgage of first priority, the mortgagee or any person claiming under the mortgagee , as long as that person is the owner of the mortgage loan secured by the mortgage and also is the party entitled to enforce the debt secured by the mortgage, may proceed for the purpose of foreclosure by a civil action against all parties in interest in either the Superior Court or the District Court in the division in which the mortgaged premises or any part of the mortgaged premises is located, regardless of the amount of the mortgage claim.

After breach of condition of any mortgage other than one of the first priority, the mortgagee or any person claiming under the mortgagee , as long as that person is the owner of the mortgage loan secured by the mortgage and also is the party entitled to enforce the debt secured by the mortgage, may proceed for the purpose of foreclosure by a civil action against all parties in interest, except for parties in interest having a superior priority to the foreclosing mortgagee, in either the Superior Court or the District Court in the division in which the mortgaged premises or any part of the mortgaged premises is located. Parties in interest having a superior priority may not be joined nor will their interests be affected by the proceedings, but the resulting sale under section 6323 is of the defendant or mortgagor's equity of redemption only. The plaintiff shall notify the priority parties in interest of the action by sending a copy of the complaint to the parties in interest by certified mail.

Sec. 2. 14 MRSA §6321,  as amended by PL 2013, c. 555, §2, is further amended by adding after the 2nd paragraph a new paragraph to read:

As used in this section, "owner" means the ultimate economic beneficiary of the loan secured by the mortgage, except that, if the loan is held in trust for the benefit of investors or as a means to provide investment interests in a pool of loans, the trustee is considered to be the owner.

SUMMARY

This bill requires a mortgage loan owner to conduct a foreclosure in the name of the mortgage loan owner, instead of a mortgage loan servicer, to ensure that courts and parties know that the foreclosing plaintiff is the mortgage loan owner and the entity whose loan modification programs affect the ability of homeowners to obtain loan modifications.