Although Maine is typically considered a “judicial property foreclosure” state, Maine legislation nevertheless permits private foreclosures. Nonetheless, the guidelines for such elements as solution of process, and accounting for equity within the property foreclosed upon, vary between personal and foreclosures that are judicial. We at OCCR feel that people forms of conditions must certanly be constant both in general general public and private foreclosures, because the stakes (losing ownership of one’s house) are exactly the same. Consequently, the proposed legislation (Appendix no. 1, Section 12) proposes to utilize exactly the same kind of solution of procedure criteria to personal foreclosures as it happens to be needed in judicial foreclosures; and extra parts (part 13 and part 14) would repeal the present right associated with the foreclosing party to wait sale of home for just two years and thereafter wthhold the entirety for the home without any responsibility to account into the customer for almost any equity. Alternatively, we propose enactment of a necessity that the house be offered towards the greatest bidder, as it is done in judicial foreclosures, with any equity more than the debt plus expenses incurred into the action, being gone back to the buyer following the purchase.
Issue #25: Payoff needs
The matter of lenders’ responses to payoff demands ended up being incorporated into our ask for Comment because we heard from people who once the customers asked for payoff numbers, their loan providers bombarded them with proposes to entice them not to ever refinance along with other loan providers.
We now have perhaps maybe perhaps not included any brand new proposal that is legislative deal with this problem. We currently believe that any dilemmas are prevented 1) by vigorously enforcing present Maine legislation that takes a loan provider or servicer to immediately react to an ask for a payoff figure (see 9-A MRSA § 9-305-B); and 2) by likewise enforcing, where appropriate, the buyer Credit Code’s provision against unconscionable conduct by loan providers (as an example, 9-A MRSA § 9-402 forbids the employment of unconscionable conduct to cause a customer to enter a credit deal). So long as lenders conform to the present statutory timeframes for creating a payoff figure, our company is not of this viewpoint which they must certanly be (or lawfully could possibly be) avoided from providing their clients a significantly better deal.
Problem #26: feasible addition of an OCCR staff lawyer and/or a detective to greatly help avoid predatory financing methods
The proposal established in the ask for Public Comment to include an detective and legal counsel to OCCR’s staff came across with unanimous help from customer groups and from industry commenters. We at OCCR believe that this type of step will be exceedingly useful in our efforts to protect customers by quickly and flexibly react to allegations by customers, or by rivals, of predatory activity by loan providers or loan agents.
But, the connected bill will not propose particular authorization for those two jobs. Provided the sentiment that is current the addition of state staff just as a final resort, we believe that the legislative committee that considers this bill (in addition to CEI anti-predatory lending bill aswell) should make such determinations after assessing the necessity for such resources and after hearing from all events about them.
Issue #27: Other associated proposals
The bill that is attachedAppendix no. 1) contains three proposals perhaps perhaps maybe not particularly addressed in the request Public Comment, but which can be relevant to your problem of legislation of home loan financing. The foremost is found in area hands down the bill. This part their site would allow (although not need) Maine to participate in an important multi-state home loan business certification project that is presently underway in many states. Exactly just exactly What started as an endeavor to consider consistent permit application types has progressed into a proposition, sponsored by two split state regulatory associations (the meeting of State Bank Supervisors, or CSBS, and also the United states Association of Residential Mortgage Regulators, or AARMR), to operate a centralized certification system that may accommodate the requirements of loan providers, particularly big mortgage businesses with operations in lots of states. Patterned following the nationwide registration procedure that regulates the securities industry, this method was created to reduce steadily the burden on candidates as well as on participating states. The legislation necessary to enable Maine to join this effort, if and when the time is right for such a move although many questions remain to be answered, OCCR thinks it prudent to put in place.
The next brand new problem can be found in Section 4 of this bill, plus it proposes to broaden protection of Article 9 of this credit rating Code to encompass a form of loan that few regulators knew existed until recently; specifically, a second-lien purchase-money loan. Most frequently occurring whenever a loan provider splits within the purchase that is total into a first-lien loan and a higher-rate, second-lien loan, this sort of loan is totally unregulated under present legislation as a result of the verbiage of 9-A MRSA § 9-101, “Scope, ” which indicates that this article covers just first-lien loans. OCCR is of this viewpoint that such loans deserve at the very least the protection granted purchase that is first-lien or refinancing loans, or even the defenses of this full Code relevant to second-mortgage, non-purchase, non-refinance loans.
The next and final “new” proposition can be found in Section 8 of this bill connected as Appendix no. 1. It needs that loan agents disclose to customers quantities compensated to those agents by loan providers in the shape of yield spread premiums. Yield spread premiums enhance whilst the rate of interest on that loan increases, leading to a reason for a financial loan broker to prepare a loan that is high-cost in the event that customer may be eligible for a lesser price. We never propose to limit the re payment of these premiums; simply to need so it be disclosed into the debtor. We feel that is a step that is important the purpose of economic transparency within the consumer-broker relationship.
We have the above actions, as further modified or supplemented through the legislative procedure, will play an important role in helping to fight predatory home loan financing in Maine. We have been additionally conscious that the so-called CEI bill will additionally be considered because of the Legislature during its future session, probably because of the same committee, and also at or just around the time that is same. As the OCCR proposals are far more moderate compared to those proposed by CEI, we believe that the OCCR conditions are well-suited towards the certain conditions that have actually arisen in this State, and to Maine’s market that is limited for mortgages and its concomitant restricted capacity to influence major nationwide financing forces. Nonetheless, we additionally feel highly that CEI’s bill deserves severe debate, since Maine consumers will in the long run take advantage of a strenuous conversation of all of the viable methods to the process of preventing predatory home loan financing.
William N. Lund, Director
Workplace of Consumer Credit Regulation
123 rd MAINE LEGISLATURE
FIRST AVERAGE SESSION – 2007
Legislative Document No. ___
An Act to stop Predatory Mortgage Lending Techniques
Be it enacted by the individuals for the State of Maine to learn:
Sec. 1. 9-A MRSA, part 6-104-A is enacted to see:
Sec. 6-104-A. For purposes of taking part in the establishment and utilization of a uniform multistate automatic certification system (hereinafter the “system”) for loan brokers, supervised lenders that aren’t supervised finance institutions, and loan that is individual thereof, the director regarding the Office of credit rating Regulation may:
A. Modify by guideline the license renewal dates established in parts 2-302(1) and 10-201;
B. Establish by guideline such brand new requirements as are essential for the State to take part in the machine, including authorizing the device to gather permit costs with respect to the state and remit those charges towards the State, authorizing collection costs by the device to cover its solutions, amending definitions in this name to conform with consistent forms used by the machine, authorizing the machine to process and keep maintaining permit documents, and authorizing utilization of the system’s uniform forms, upon the director’s discovering that each brand new requirement is in keeping with the public interest plus the purposes for this Title; and
C. Require a credit and back ground research of each and every applicant for a permit as that loan broker, a supervised loan provider that’s not really a supervised standard bank, or that loan officer thereof, by means including fingerprint checks for state and nationwide unlawful histories, commencing at such time while the State joins the machine pursuant for this part. The expense of such investigations must certanly be charged into the applicants. Information obtained or held by the director pursuant for this subsection will be non-public pursuant to section 6-116 and never at the mercy of disclosure.