Chipman introduces bill to clarify foreclosure processes

Posted: April 28, 2017 | Senator Chipman

A bill introduced by Senator Ben Chipman, D-Portland, would ensure families undergoing foreclosure processes aren’t kicked out of their homes unexpectedly early in that process. The bill was the subject of a public hearing in the Legislature’s Insurance and Financial Services Committee on April 27.

There is typically a 90-day period between the entry of a foreclosure judgement and the so-called “equity of redemption,” during which the lender cannot begin the foreclosure sale process. This bill would codify that practice into law. Most foreclosure lawyers and banking institutions already follow this process, believing that the borrower’s right to possession continues until the end of this 90-day redemption period.

One foreclosure lawyer, however, has recently begun asking that foreclosure judgements allow for immediate issuance of writs of possession, which would allow lenders to evict homeowners at any time during the 90-day redemption period.

The bill — LD 880 “An Act To Protect a Homeowner’s Equity of Redemption in a Foreclosure Action” — clarifies that homeowners under foreclosure may remain in their homes for the full 90-day period.

“Maine families facing foreclosure are under tremendous stress,” said Sen. Chipman. “This bill will allow people facing the stress of the loss of their homes to at least have the peace of mind that a sheriff will not come knocking on their door to evict them while they are struggling to make new living arrangements.”

According to a CoreLogic report from January, Maine has one of the highest foreclosure rates in the country.

“Forcing homeowners to leave their home while they still have the ability to take steps to remain in their property and avoid foreclosure makes little sense and simply makes a bad situation worse,” said Frank D’Alessandro of Pine Tree Legal. “Possession during the redemption period is important even when retention is not possible because it allows the homeowner the right to a fair hearing but then time to make the transition from their home… to other alternative housing.”

LD 880 faces further action in the Insurance and Financial Services Committee and votes in the House and the Senate.