Claxton submits bill to fight for Androscoggin County and all state homeowners

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 a public hearing before the Legislature’s Committee on Judiciary on Wednesday. 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. “This bill 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.”

The rate of foreclosure in Maine is above the national average. It is often a difficult process for a homeowner due to the inability to work out problems with the entity they chose for their mortgage. In many instances, the secondary loan servicer who has the mortgage could be hard to find or work with. That service lender also often will sell the mortgage to yet another servicer. This process increases the rate of billing errors, statement errors and delays in payments, and it can make the process of working out any problems with the mortgage complicated if something goes wrong. Requiring mortgage servicers to use Maine standards of fair dealing and to act in good faith during mediation will help resolve issues with the mortgage before foreclosure is imminent.

“Homeowners do not have the right to choose the loan servicing company even though they are able to choose the bank they will use for the mortgage. The loan servicing company is the entity the homeowner interacts with,” said Frank D’Alessandro, who is the Executive Director of Policy for Maine Equal Justice Partners.

Maine Equal Justice Partners, Mallard Law Firm, National Consumer Law Center and Pine Tree Legal spoke in support of LD 1327.

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 faces more action in the committee and votes before the Maine House and Senate.

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