An Act To Establish a Voluntary Preforeclosure Mediation Program
Be it enacted by the People of the State of Maine as follows:
Sec. 1. 14 MRSA §6113 is enacted to read:
§ 6113. Voluntary preforeclosure mediation
1. Preforeclosure mediation. A mortgagee may request that a mortgagor participate in mediation before the mortgagee commences a foreclosure action under section 6321 if:
A. The mortgage is on owner-occupied residential property of no more than 4 units that is the primary residence of the mortgagor; and
B. The mortgage is more than 35 days delinquent.
2. Request by mortgagee. A mortgagee must provide the request for mediation under subsection 1 to a mortgagor at the last known address of the mortgagor by:
A. Registered mail, return receipt requested. For purposes of this paragraph, the request is made on the date the mortgagor signs the receipt or, if the request is undeliverable, the date the post office last attempted to deliver it; or
B. Ordinary first-class mail, postage prepaid. For purposes of this paragraph, the request is made on the date when the mortgagor receives the request. A post office certificate of mailing to the mortgagor is conclusive proof of receipt on the 3rd calendar day after mailing.
3. Contents of request. A request for mediation under subsection 1 must include the following:
A. The name of the mortgagee;
B. A copy of the notice provided to the mortgagor under section 6111; and
C. A statement that participation in mediation is voluntary on the part of the mortgagor, that participation in mediation as well as failure or refusal to participate constitute a waiver of the mortgagor's rights under the foreclosure mediation program established pursuant to section 6321-A and that no other rights of either party are waived in any foreclosure action by participating in mediation.
4. Failure to respond; refusal to participate. If a mortgagor does not respond to the request to participate in mediation within 35 days after the date that the request is made pursuant to subsection 2, the mortgagor is deemed to have refused the request and failed to participate in mediation under this section.
5. Fee. Before a mediation session is conducted under this section, a mortgagee must pay to the Superior Court or District Court in the county or division in which the mortgaged premises or any part of the mortgaged premises is located the fee established under section 6321-A, subsection 7, paragraph C.
6. Mediation program. The following apply to mediation sessions conducted under this section: section 6321-A, subsections 3 and 4; section 6321-A, subsection 7, paragraph A; and section 6321-A, subsections 12 and 13.
7. Completion deadline; extension. Mediation is deemed completed under this section 90 days following receipt of the request under subsection 2. The parties may mutually agree to extend the deadline beyond 90 days.
8. Mediator's report. In addition to the information required or permitted to be included under section 6321-A, subsection 13, the mediator's report must also include the following:
A. The mortgagee's name;
B. The mortgagor's name;
C. The address of the mortgaged property;
D. Certification that the fee required under subsection 5 has been paid;
E. An acknowledgment by the mortgagor that participation in preforeclosure mediation waives the mortgagor's right to participate in the mediation program established under section 6321-A if a foreclosure action is commenced within 12 months of the date of the report;
F. The date of the report;
G. The mediator's signature;
H. The signature of a representative of the mortgagee having authority to agree to a proposed settlement, loan modification or other action or forbearance on behalf of the mortgagee; and
I. The signature of the mortgagor.
Sec. 2. 14 MRSA §6321-A, sub-§2, ¶¶B and C, as enacted by PL 2009, c. 402, §18, are amended to read:
B. A sample answer and an explanation that the defendant may fill out the form and return it to the court in the envelope provided as the answer to the complaint. If the debtor returns the form to the court, the defendant does not need to file a more formal answer or responsive pleading and will be scheduled for mediation in accordance with this section; and
C. A description of the program . ; and
Sec. 3. 14 MRSA §6321-A, sub-§2, ¶D is enacted to read:
D. If applicable, a statement that the defendant is not entitled to participate in the foreclosure mediation program because mediation under section 6113 was completed or the defendant failed or refused to participate in mediation under section 6113.
Sec. 4. 14 MRSA §6321-A, sub-§7, ¶C, as enacted by PL 2009, c. 402, §18, is amended to read:
C. Notwithstanding subsection 10, establish a fee upon a foreclosure filing made on or after June 15, 2009 to support mediation services to be paid for by the plaintiff , except the fee is not required to be paid upon a foreclosure filing when the fee required under section 6113, subsection 5 has previously been paid. A copy of the mediator's report that includes the statement required under section 6113, subsection 8, paragraph D is conclusive evidence that the fee has previously been paid; and
summary
This bill provides Maine consumers with an opportunity to avoid home mortgage foreclosure by participating in mediation at an early stage of default before foreclosure has commenced. A mortgagee may request a mortgagor to participate in preforeclosure mediation if the property subject to the mortgage is owner-occupied residential property of 4 or fewer units, and the mortgage payment is at least 35 days late. A mortgagor who participates or who fails or refuses to participate in the preforeclosure mediation program is not entitled to participate in the existing foreclosure mediation program. Current law provides for foreclosure mediation only after a foreclosure has been filed in court.