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Today at 9:30 am, the Judiciary Committee will review LD 1444, An Act to Prevent Foreclosures Without Strict Compliance with Notice Requirements. The bill, sponsored by Senator Anne Carney (D-Cumberland) would reinstate “strict compliance” with notice requirements regarding foreclosure (14 M.R.S.A. §6111). This rule was known as the “free house” rule in Maine since having any error in the notice and procedure process resulted in mortgages under foreclosure being effectively canceled.
The rule was first set by a 2017 court case, Pushard v. Bank of America, which found that a a mistake in the notice of default meant that the mortgage obligation was nullified. Due to legal principles, this became the final finding of the court and borrowers received a free house with no mortgage as lenders were barred from re-litigation due to res judicata.
Last year, the Law Court issued a decision on Finch v. U.S. Bank, which overturned the previous “free house” precedent set by Pushard. Credit unions and banks across the state were relieved by the decision, since it prevented large losses during difficult foreclosure cases. Unfortunately, LD 1444 seeks to re-enact the “free house” rule by placing it into statute. The proposed law would specifically prohibit a lender from bringing any foreclosure actions after a failure to comply with all the notice provisions. The bill would also retroactively apply to any foreclosure judgments that were entered in favor of the lender.
Due to the technical nature of the bill and its strong list of sponsors and co-sponsors who are attorneys, the League has asked Daniel Cummings of Norman Hanson Detroy to testify. Cummings has decades of experience representing credit unions in foreclosure cases and and is well positioned to answer any technical questions that the committee may pose. If you wish to watch the hearing you may view it online. You also can contact any member of the League’s Governmental Affairs team if you would like to share information with us or the committee.