Foreclosures in Maine
Contents
Overview
Maine offers several forms of a foreclosure, but the most common form is judicial foreclosure.
Common Forms
The most common form of foreclosure in Maine is Judicial. There is actually more than one form of judicial foreclosure available. The most common type is called an Action at Law for Possession. The other forms of judicial foreclosure are rarely used and so not addressed here. Non‐Judicial Foreclosure is only available for commercial properties for Security Instruments that contain a Power of Sale clause. Power of Sale clauses do not normally appear in residential Security Instruments.
Assignments of Security Instruments
The chain of title for security instruments should be verified during examination to ensure that the proper party has the rights to satisfy, release, or foreclose on a given security instrument. All assignments must be recorded prior to the commencement of foreclosure.
Recorded Foreclosure Notice
After a standard judicial foreclosure action is commenced in Maine by filing a foreclosure Complaint. Shortly after filing the Complaint, a Clerk’s Certificate of Foreclosure or the Complaint itself is recorded in the public land records. Once recorded, the Certificate or Complaint will act as a bar to subsequently filed or recorded in personam liens.
Foreclosure Process
The primary form of Judicial Foreclosure in Maine is commenced by the filing of the Complaint. The Complaint must name the foreclosed borrowers, any non‐titled spouses, any tenants or occupants of the property, and any lien holders that are junior in position to the foreclosed mortgage. Junior lien holders are typically named as “Parties in Interest” and not as party defendants. Upon completion of the foreclosure, all junior liens are discharged from the property so long as the lien holders were properly named and served. The best method for determining the result of the foreclosure is to review the Judgment of Foreclosure and Sale entered by the Court at the conclusion of the foreclosure.
Attachment of Liens after Commencement
Any in personam liens filed or recorded after the recording of the Clerk’s Certificate of Foreclosure or Complaint do not attach to the property. Liens not Discharged in Foreclosure – Real Property Taxes and Municipal Liens, including Water and Sewer Liens, are not discharged by foreclosure in Maine.
Foreclosure Deed
The most common form of foreclosure deed in Maine is called a Foreclosure Deed although it is becoming more common to see them title as Quitclaim Deeds Without Covenant Pursuant to Foreclosure. Unlike most judicial foreclosures in other states, the foreclosure sale is conducted by the foreclosing lender or their representative. This practice tends to resembles non‐judicial foreclosure in other states. In addition, the grantor in the foreclosure deed will also be the foreclosing lender or their representative and not a public official like a Sheriff. The foreclosure deed will typically include a page evidencing compliance with the advertisement of the foreclosure including a copy of an affidavit containing the notice of sale published in a local newspaper. We are currently not required to look behind these documents, but any obvious discrepancies, such as the wrong address for the foreclosure property, should be noted as possible defects in the foreclosure process.
Borrower Redemption Rights
For the primary form of Judicial Foreclosure, there is a 90‐day right of redemption in favor of the borrower from the date of entry of the foreclosure judgment. This information typically appears in the Judgment of Foreclosure and Sale. It should be noted, however, the foreclosure sale is typically only conducted after the expiration of this redemption period.
Third Party Redemption Rights
There are no redemption rights in favor of third parties other than junior liens held by the IRS or other branches of the Federal Government.
