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1. Foreclosures – “101”
The Process – Start to Finish

2. Disclaimer
• These slides were created to help the Maine real estate
practitioner gain a general and cursory understanding
of Maine foreclosures. For specific questions or issues,
one should always seek the advice of counsel.

3. Foreclosures – “101”
Maine Overview
• Residential foreclosures in Maine are completed
through the courts. The court must provide a Judgment
of Foreclosure in order for a mortgagee to foreclose a
residential mortgage. The court determines if the
conditions of the note or mortgage were breached and
also proscribes the priority of payments in the
foreclosure sale.
• DO NOT Believe all you read Online . . .

4. Foreclosures – “101”
• It’s a LEGAL process – defined by
Statute – Title 14, Chapter 713,
Subchapter 6 … §§6321 et. seq.
• Court process required for Nearly All –
(Deed in Lieu)
• Longer than Most Expect

5. Foreclosures – “101”
It All Begins at the Closing Table ??
Consensual
Lien
“Legal
Promise to “If you Pay ,
Pay” You can Stay
…
And if you
don’t …
We can
Foreclose”

6. Foreclosures – “101”
• Promissory Note – If you’re late, you’re in
Default.
• Default Notice Required
• 30 Day Right to Cure
• If Not Cured, Foreclosure is the Option of the
Legal Mortgage Holder
“Law is a Lawyer-Driven Process”

7. Foreclosures – “101”

8. Foreclosures – “101”
Maine’s Foreclosure Diversion Program –
effective Jan. 2010

9. Foreclosures – “101”

10. The Clerk’s Certificate

11. Foreclosures – “101”

12. Foreclosures – “101”
Potential Mediation Results . . .
OR . . .

13. Foreclosures – “101”

14. Foreclosures – “101”

15. Foreclosures – “101”

16. Foreclosures – “101”
The Judgment –
or Court Order
But Wait -
The Appeal Period
Begins . . .

17. Foreclosures – “101”
But Wait . . Again .
..
The Period of
Redemption . . .

18. Foreclosures – “101”
YES NO

19. Foreclosures – “101”
Then . . . Publish Notices for Public Sale
Not < 30 days & Not > 45 from 1st Notice Date
THE AUCTION HAPPENS . . .
UNLESS POSTPONED . . .

20. Foreclosures – “101”
• Start to Finish – LONGER than
Most Expect
• The Clerk’s Certificate of
Foreclosure is just the
beginning . . .

21. Foreclosures – “101”

22. Foreclosures – “101”
Common Issues in Maine (with examples)
• Foreclosure deed missing from record, although foreclosing
lender and buyer are the parties in a P & S (Wells Fargo is selling to our
buyer, title review shows Wells was the high bidder, no foreclosure deed on record,
proposed deed is from Wells to our buyer –need foreclosure deed from Wells to Wells
recorded)
• Judgment of foreclosure fails to name one of the mortgagors as
a defendant (Bob and Sue Smith gave a mortgage to Wells, Bob Smith only named
as defendant in Judgment –need to find out what happened to Sue Smith, may need to
redo foreclosure)
• Mortgage is assigned after the foreclosure sale (Wells Fargo obtained
judgment, was the high bidder at auction, then assigned the mortgage to U.S. Bank,
U.S. Bank selling to our buyer –require assignment from U.S. Bank back to Wells, deed
from Wells to our buyer)

23. Foreclosures – “101”
Common Issues in Maine (with examples)
• Judgment obtained, but lender agrees to a short sale (Wells Fargo
receives Judgment of Foreclosure & during or after the borrower’s 90 day
redemption period, the borrower enters a P&S, Wells agree to the payoff
amount –we must obtain and record a Waiver of Foreclosure and foreclosure
action must be dismissed)
• There may be non-foreclosure related title issues associated with
the property. Because the lender is often the owner of the
property, it is commonly difficult to resolve prior owner title
issues.
• Most common source of problems with Maine foreclosure review is
lack of information. Often the Clerk’s Certificate and Judgment are
the only recorded documents. Title insurers want the report of sale
returned to the court, however, the foreclosure statute does not
require this prior to a conveyance to a third party.

24. Foreclosures – “101”
What We Know….
• Limited ability to control transaction timeline
• Requires us to be flexible in dealing with:
• P&S Timeline
• Unexpected Title Issues
• Buyer Expectations
• Requires teamwork with all parties

25. Foreclosures – “101”
What Can We Do?
 Help Client(s) understand the Process & Remain
Flexible.
 Inform Buyer’s Lender of foreclosure purchase &
Request flexibility with loan programs/closing dates.
 Manage client expectations & work as a team with
your buyer’s lender & title company.

26. Foreclosures – “101”
OUR COMMON GOAL:
Limiting stress and anxiety related to a
foreclosure transaction.