AUGUSTA, Maine — A new law enacted by the Legislature and signed by Gov. Paul LePage will improve the foreclosure process in Maine, Attorney General Janet T. Mills said Thursday.
The legislation stemmed from a study, spearheaded by Mills, of the state’s efforts to handle residential foreclosures that resulted in a report submitted to the Judiciary Committee.
LD 1389 was drafted after a six-month examination of the home foreclosure process, two public forums and meetings with dozens of bankers, mediators, housing counselors, judicial personnel, attorneys and other stakeholders, according to a press release issued Thursday by Mills’ office.
“The data we collected shows that the housing crisis is still rippling through Maine,” she said. “Maine courts saw 4,756 foreclosure filings in 2013, up from 4,339 the year before. Our state has still not recovered from the recession. Maine families and communities continue to suffer.
“Many people in Maine are still struggling to make ends meet,” Mills said. “My work in this area reinforces that we need a legal framework that works efficiently but is responsive to the individual needs and interests of homeowners.”
Any impact on the costs or revenues within the Bureau of Consumer Credit Protection in the Department of Professional and Financial Regulation as a result of the new law are expected to be minor and absorbed within existing budget resources, according to the fiscal note attached to the bill.
Mills’ report concluded that the foreclosure mediation process, enacted into law in 2009 and adopted by court rule that same year, is successful and should be improved.
The legislation will:
— Strengthen the role of mediation by incorporating the National Mortgage Settlement standards.
— Establish an expedited procedure to deal with abandoned properties.
— Shorten the challenge period from 15 years to five years for property subject to municipal tax liens recorded after Oct. 13.
— Authorize the Bureau of Consumer Credit Protection to regulate property preservation entities operating on behalf of lenders.
— Strengthen standards and training for foreclosure mediators.
— Protect funding for housing counselors, a critical part of the foreclosure process, by closing a loophole that allowed foreclosing banks to avoid paying the full real estate transfer tax when the transfer was done with an affiliated entity.
Mills will review the foreclosure process and report her findings to the Legislature in January 2015, the press release said.