Committee OKs Chipman bill to improve foreclosure process
The Legislature’s Insurance and Financial Services Committee voted unanimously in support of a bill by Sen. Ben Chipman, D-Portland, to ensure families undergoing foreclosure processes aren’t kicked out of their homes unexpectedly early in that process.
There is typically a 90-day period after the entry of a foreclosure judgement during which the lender cannot begin the foreclosure sale process. This period allows homeowners to make new living accommodations if they’re unable to salvage their mortgage. 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. Several foreclosure lawyers, however, have 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. The bill protects the mortgager’s right to protect the mortgaged property.
“The foreclosure process puts an enormous amount of stress on a family,” said Sen. Chipman. “This bill will ensure that Maine families aren’t also needlessly worried that they’ll be kicked out of their homes before they’ve had time to find new living arrangements.”
According to a CoreLogic report from January, Maine has one of the highest foreclosure rates in the country.
LD 880 now heads to the Senate for initial votes.