Claxton bill to help homeowners receives committee support
AUGUSTA — Legislation from Sen. Ned Claxton, D-Auburn, LD 1327, “An Act To Require Residential Mortgage Loan Servicers To Act in Good Faith in Dealing with Homeowners,” received the unanimous support of the Legislature’s Judiciary Committee on Tuesday. The bill would hold mortgage servicers to the same standards that banks are held to.
“Maine’s rate of foreclosure is higher than the national average, and Androscoggin County continues to see foreclosure rates above Maine’s average,” said Sen. Claxton. “I’m glad the Judiciary Committee has supported this bill. It will help our communities decrease foreclosure rates by making mortgage service providers be more responsive to homeowner issues and holding them to the same good-faith standard before and after mediation.”
Foreclosure is a complicated process for homeowners and often starts with the inability to work out problems with the company that holds their mortgage. In many instances, the secondary loan servicer who has the mortgage can be hard to find or work with. Service lenders often sell the mortgage to yet another servicer. This process increases the rate of billing errors, statement errors and delays in payments. It can make the process of working out any problems with the mortgage more complicated. Requiring mortgage servicers to use Maine standards of fair dealing and to act in good faith during mediation will help resolve problems with the mortgage before foreclosure is imminent.
LD 1327 changes the foreclosure mediation program to allow the courts to directly sanction a mortgage servicer when the servicer fails to act in good faith during mediation.
The bill now faces votes before the Maine Senate and House.