Foreclosure Prevention Program

What are lenders required to do?

Lenders must be aware of several changes. They include:

1. Notice of Right to Cure Default.  These “cure” notices, sent before foreclosure can be started, previously required 30 days’ notice.  The new law expands that time frame to 35 days. The notice must contain the following information:
   • The borrower’s right to cure the default under the terms of the mortgage and state law;
   • An itemization of all past due amounts causing the loan to be in default;
   • An itemization of any other charges that must be paid in order to satisfy the full obligations of the loan;
   • A statement that the mortgagor may have options available other than foreclosure, including available options with the lender, servicer or a counselor approved by HUD. The statement must include language that the borrower is encouraged to explore available options prior to the end of the right-to-cure period;
   • The address, telephone number and other contact information for persons having authority to modify the loan to avoid foreclosure;
   • The name, address, telephone number and other contact information for all counseling agencies approved by HUD to assist Maine consumers. A current list can be found HERE (Trusted Partner Link);
   • A statement that the mortgagor may request court-supervised mediation, as that mediation becomes available.


2. Lenders are required to provide electronic notice to the Bureau within 3 days of providing a default notice to the borrower. Lenders must provide the following information to the BCCP:
   
   • The name and contact information of the company that mailed the notice;
   • The name and contact information of the owner of the mortgage;
   • Whether the owner of the mortgage is (choose one) a state-chartered bank or credit union; a federally-chartered bank or credit union; a non-bank mortgage company; or a private mortgage lender;
   • The date the Notice of Right to Cure was mailed;
   • The name and property address of the consumer;
   • The address to which the notice was sent;
   • The name and contact information of an individual with authority to negotiate a loan modification; and
   • The dollar amount needed to cure the default.
   
   The lender reporting form is available HERE.

What will the Bureau do with the information?

The Bureau is required to send information to those consumers who have received Notices of Right to Cure, providing additional information, and encouraging them to contact the bureau at its toll-free new consumer foreclosure prevention hotline, 1-888-664-2569 (1-888-NO-4-CLŌZ)

Must a lender take any additional new steps when foreclosing a residential (owner-occupied, 1-4 unit) mortgage?

Lenders must include a new cover document with each foreclosure summons and complaint. This document is a one-page form that the consumer can use to respond to the Complaint, and to request court-supervised mediation. The final form is available HERE (PDF).

The lender must also provide a pre-addressed envelope that the consumer can use to file his or her Answer with the court.

If the consumer requests mediation, that mediation is mandatory on lenders. The lender must provide an individual at the mediation proceeding who is authorized to enter into loan modification agreements.

What provisions, if any, apply to foreclosing on a commercial, multi-unit dwelling?

Foreclosure attorneys should carefully read the new law, since it requires that certain notices be provided to tenants in an apartment building.

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