Although Maine is typically considered a “judicial property foreclosure” state, Maine legislation nevertheless allows personal foreclosures. Nonetheless, the principles for such elements as solution of procedure, and accounting for equity when you look at the property foreclosed upon, vary between personal and judicial foreclosures. We at OCCR feel that people forms of conditions must be constant both in general general general public and private foreclosures, because the stakes (losing ownership of one’s house) are identical. Consequently, the proposed legislation (Appendix #1, part 12) proposes to use equivalent kind of solution of procedure requirements to personal foreclosures as it is now required in judicial foreclosures; and extra parts (part 13 and area 14) would repeal the present right for the foreclosing party to postpone sale of home for just two years and thereafter wthhold the entirety associated with the home without any responsibility to account into the customer for just about any equity. Rather, we propose enactment of a necessity that the home be offered towards the bidder that is highest, because is carried out in judicial foreclosures, with any equity more than your debt plus expenses incurred into the action, being came back to the consumer following the purchase.
Issue #25: Payoff demands
The matter of lenders’ responses to payoff demands ended up being incorporated into our Request for Comment because we heard from people who once the customers asked for payoff numbers, their loan providers bombarded them with proposes to entice them to not refinance along with other loan providers.
We’ve maybe maybe not included any brand brand new proposal that is legislative deal with this matter. We now believe that any dilemmas could be prevented 1) by vigorously enforcing current Maine legislation that takes a loan provider or servicer to promptly react to an ask for a payoff figure (see 9-A MRSA § 9-305-B); and 2) by likewise enforcing, where appropriate, the buyer Credit Code’s supply against unconscionable conduct by loan providers (as an example, 9-A MRSA § 9-402 forbids the application of unconscionable conduct to induce a customer to come into a credit transaction). As long as lenders conform to the present timeframes that are statutory creating a payoff figure, our company is maybe maybe not associated with the viewpoint they must be (or legitimately could possibly be) avoided from providing their clients an improved deal.
Problem #26: feasible addition of an OCCR staff lawyer and/or a detective to simply help avoid lending that is predatory
The proposition established when you look at the request Public Comment to include a detective and a legal professional to OCCR’s staff came across with unanimous support from customer teams and from industry commenters. We at OCCR believe that this type of step will be exceedingly useful in our efforts to protect customers by quickly and flexibly react to allegations by customers, or by rivals, of predatory activity by loan providers or loan agents.
Nevertheless, the connected bill will not propose authorization that is specific those two jobs. Offered the present belief favoring the addition of state staff just as a final resort, we believe the legislative committee that considers this bill (together with CEI anti-predatory financing bill also) should make such determinations after assessing the necessity for such resources and after hearing from all events about the subject.
Issue #27: Other proposals that are related
The connected bill (Appendix #1) contains three proposals perhaps perhaps maybe not especially addressed in the ask for Public Comment, but which are relevant towards the problem of legislation of home loan financing. The very first is found in area one of the bill. This area would allow ( not need) Maine to participate in a significant mortgage that is multi-state certification project that is presently underway in lot of states. Exactly just What started as an endeavor to consider license that is uniform forms has now resulted in a proposition, sponsored by two split state regulatory associations (the Conference of State Bank Supervisors, or CSBS, plus the United states Association of Residential Mortgage Regulators, or AARMR), to operate a centralized certification system that may accommodate the requirements of loan providers, specially big home loan organizations with operations in a lot of states. Patterned following the nationwide registration procedure that regulates the securities industry, this method is made to reduce steadily the burden on candidates and on participating states. The legislation necessary to enable Maine to join this effort, if and when the time is right for such a move although many questions remain to be answered, OCCR thinks it prudent to put in place.
The 2nd brand brand brand new problem is situated in Section 4 of this bill, and it also proposes to broaden coverage of Article 9 associated with credit Code to encompass a kind of loan that few regulators knew existed until recently; specifically, a purchase-money loan that is second-lien. Most often occurring installment loans minnesota each time a loan provider splits within the purchase that is total as a first-lien loan and a higher-rate, second-lien loan, this kind of loan is totally unregulated under present law as a result of the verbiage of 9-A MRSA § 9-101, “Scope, ” which indicates that this article covers just first-lien loans. OCCR is associated with viewpoint that such loans deserve at the very least the protection granted purchase that is first-lien or refinancing loans, or even the defenses of this complete Code relevant to second-mortgage, non-purchase, non-refinance loans.
The next and final “new” proposition is situated in Section 8 of this bill connected as Appendix # 1. It entails that loan agents disclose to customers amounts compensated to those agents by loan providers by means of yield spread premiums. Yield spread premiums enhance since the rate of interest on that loan increases, leading to a bonus for the loan broker to set up a high-cost loan even in the event that consumer may be eligible for a a diminished rate. We try not to propose to restrict the re re payment of these premiums; and then need so it be disclosed towards the debtor. We feel that is a essential action toward the aim of monetary transparency into the consumer-broker relationship.
We have the above actions, as further modified or supplemented through the process that is legislative will play a crucial role in helping to fight predatory home loan financing in Maine. We’re additionally conscious that the so-called CEI bill is likewise considered because of the Legislature during its future session, most likely by the exact same committee, as well as or just around the exact same time. As the OCCR proposals are far more moderate compared to those proposed by CEI, we believe that the OCCR conditions are well-suited towards the particular conditions that have actually arisen in this State, and to Maine’s restricted market share for mortgages and its concomitant restricted capacity to influence major nationwide financing forces. But, we additionally feel highly that CEI’s bill deserves severe debate, since Maine customers will in the long run reap the benefits of an energetic conversation of most viable methods to the process of preventing predatory home loan financing.
William N. Lund, Director
Workplace of Credit Rating Regulation
123 rd MAINE LEGISLATURE
FIRST AVERAGE SESSION – 2007
Legislative Document No. ___
An Act to stop Predatory Mortgage Lending Techniques
Be it enacted by the individuals associated with the State of Maine to see:
Sec. 1. 9-A MRSA, area 6-104-A is enacted to see:
Sec. 6-104-A. For purposes of taking part in the establishment and utilization of a uniform multistate automatic certification system (hereinafter the “system”) for loan brokers, supervised lenders that aren’t supervised banking institutions, and specific loan officers thereof, the manager regarding the workplace of credit rating Regulation may:
A. Modify by guideline the permit renewal dates established in parts 2-302(1) and 10-201;
B. Establish by guideline such brand brand new requirements as are essential when it comes to State to take part in the machine, including authorizing the machine to get permit costs on the part of the state and remit those costs towards the State, authorizing collection costs by the machine to cover its solutions, amending definitions in this name to conform with consistent forms used by the device, authorizing the machine to process and continue maintaining permit documents, and authorizing utilization of the system’s consistent forms, upon the manager’s discovering that each brand new requirement is in keeping with the general public interest in addition to purposes with this Title; and
C. Need a credit and back ground research of each and every applicant for the permit as that loan broker, a supervised loan provider that’s not a supervised standard bank, or a loan officer thereof, by means including fingerprint checks for state and nationwide criminal records, commencing at such time since the State joins the device pursuant for this area. The expense of such investigations needs to be charged into the candidates. Information obtained or held by the manager pursuant to the subsection will probably be pursuant that is non-public part 6-116 and never at the mercy of disclosure.