In Maine, foreclosure is a type of court case normally brought by a lending institution to offer a borrower's (property owner's) home to please a financial obligation. In a foreclosure case, the property owner is the "defendant" and the lending institution is the "complainant."

A foreclosure case generally takes several months or more to complete. Simply filing a case does not allow a loan provider to seize the home or require a homeowner to vacate. There are frequently methods to settle the case before it is finished.

If you are a Maine homeowner who resides in a 1-4 system residential or commercial property that is in foreclosure, you have the right to demand mediation through the Foreclosure Diversion Program.

Foreclosure Step by Step

Step 1: Notice of Default Letter

If a property owner falls behind in paying the mortgage, the loan provider sends a letter to the property owner stating how much should be paid by a certain deadline (giving a minimum of 35 days) in order to get back on track and prevent foreclosure. This is called a "notification of default and right to treat" letter (default letter). See 14 M.R.S. § 6111.

Please note: if the property owner attempts to pay after the deadline, the quantity needed to catch up will be more than the quantity the default letter requires due to the fact that more will be needed after the deadline. Even if the loan provider accepts the default letter quantity after the deadline, the property owner will still be behind in monthly payments and/or the overall quantity due.

Step 2: Foreclosure Summons & Complaint

If the house owner does not capture up by the due date in the default letter, the lender might begin a foreclosure action by "serving" the homeowner with a foreclosure summons and grievance. The property owner may be served in individual by a sheriff, or by mail (if the property owner indications and returns a receipt of the sent by mail complaint).

Once a foreclosure case has actually begun, if the lender accepts any payment from the homeowner, even for less than the total owed, the foreclosure is cancelled (unless the celebrations agree in writing that it is not). Because of this, it is not unusual for homeowners who attempt to send in checks after they have actually been served to have those checks returned. See 14 M.R.S. § 6321 ¶ 5.

The foreclosure court papers include crucial information, consisting of:

- The location and address of the court where the case has been filed;
- The clerk's workplace telephone number;
- The amount declared to be owed; and
- A Reaction to Complaint and Ask for Mediation kind for the house owner to go back to the court within 20 days.

Step 3: Homeowner's Response

To challenge a foreclosure or to request mediation, a house owner must react to the complaint within 20 days by submitting a response with the court. There are a number of methods to do this. The property owner's reaction may be:

- A court document called an "response" prepared by a lawyer or by the homeowner;
- The one-page Response to Complaint and Request for Mediation kind. This kind is also consisted of with the foreclosure papers; or
- Another kind of composed request for mediation.

Even if the due date has passed, a property owner may still contact the court or send in a reaction to the foreclosure problem.

Step 4: First Call Day and Mediation

If you have asked for mediation, the clerk's workplace will mail you a notice of when and where to come for an Informational Session and very first mediation session (" First Call Day"). Please note: the area may be various from the court where the foreclosure case was filed. Discover more about foreclosure mediation.

If you are not able to come to First Call Day (or any court occasion) on the date set up, you should ask the court in writing to alter your date.

Step 5: Foreclosure Case is Settled OR Goes Forward "On The Docket"

You may be able to settle your case in mediation (or at any other point in the process). If your case is settled, you may ask the court for a "stay" (time out) up until any steps needed to complete the case are completed. If no extra steps require to be taken, the parties can ask the court to close the case (in some cases called a "Stipulation to Dismissal"). Then the case is over.

Some settlement choices you might discuss in mediation consist of:

- A "loan modification." (A modification in the terms of the loan so the homeowner can pay for the payment.).
- Setting up a "repayment strategy." (This is where the property owner pays a part of the back payments on top of the routine month-to-month payment for a set time period till payments depend on date.).
- A "brief sale." (Where the parties concur that the home is to be offered for less than is owed, with the sales continues going to the loan provider in exchange for the foreclosure being dropped (dismissed).).
- Giving a "deed in lieu of foreclosure." (The house owner offers a deed to the residential or commercial property to the lending institution in exchange for the loan provider dropping (dismissing) the case.)

If the case is not settled before or throughout mediation, it is returned to the court docket (a list of cases the clerk's office handles). The case then moves forward. Each side is enabled a certain quantity of time to gather information (" discovery") and/or make demands of the court for orders or judgments (" movements"). After discovery and movements are completed, the case is scheduled for trial. The parties may settle the case at any point before, or perhaps during, trial.

Step 6: Conclusion of the Case

Dismissal: This is when the case is canceled. Parties can accept request for a case to be dismissed, or a judge can purchase a termination when one celebration asks for it and the judge agrees that dismissal should be approved.

Judgment: After a trial, the court orders judgment for the complainant or judgment for the accused. The party against whom judgment is entered can submit an appeal within 21 days of entry of judgment. The parties can also agree to a judgment (a "Stipulation to Judgment"), which can not be appealed.

Step 7-Post Judgment, "Period of Redemption," and Public Sale.
When judgment for the complainant (lending institution) is gone into, a 90-day "duration of redemption" starts unless an appeal is submitted. This implies the homeowner has 90 days to pay the total of the judgment to "redeem" (save) the residential or commercial property. The homeowner can remain in the home during this duration.

After the 90-day redemption duration is over, if the homeowner has not paid the quantity in the judgment to redeem the residential or commercial property, the lending institution can then acquire the residential or commercial property and go forward with a public sale. The loan provider is enabled to bid on the residential or commercial property at the public sale. See 14 M.R.S. § 6323.