Although Maine is normally considered a “judicial property foreclosure” state, Maine legislation nevertheless permits personal foreclosures. But, the guidelines for such elements as service of procedure, and accounting for equity into the property foreclosed upon, vary between private and judicial foreclosures. We at OCCR feel that people forms of conditions should always be constant both in general public and private foreclosures, because the stakes (losing ownership of one’s house) are exactly the same. Consequently, the legislation that is proposedAppendix #1, part 12) proposes to utilize exactly the same variety of solution of procedure requirements to private foreclosures as it happens to be needed in judicial foreclosures; and extra parts (part 13 and area 14) would repeal the existing right associated with the foreclosing party to postpone purchase of property for just two years and thereafter wthhold the entirety of this home without any responsibility to account to your customer for just about any equity. Instead, we propose enactment of a necessity that the home be offered to your bidder that is highest, as it is done in judicial foreclosures, with any equity in excess of the debt plus expenses incurred within the action, being came back to the customer following the purchase.
Issue #25: Payoff needs
The problem of lenders’ responses to payoff needs ended up being contained in our ask for Comment with offers to entice them not to refinance with other lenders because we heard from consumers that when the consumers requested payoff figures, their lenders bombarded them.
We now have maybe perhaps not included any new legislative proposition to address this problem. We now believe that any dilemmas may be prevented 1) by vigorously enforcing Maine that is current law calls for a loan provider or servicer to immediately react to a request 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 lenders (as an example, 9-A MRSA § 9-402 forbids the usage of unconscionable conduct to cause a consumer to come right into a credit deal). As long as lenders conform to the present statutory timeframes for producing a payoff figure, our company is perhaps maybe not associated with viewpoint which they must certanly be (or lawfully could possibly be) avoided from providing their clients a much better deal.
Issue #26: Possible addition of a OCCR staff lawyer and/or a detective to greatly help avoid lending that is predatory
The proposition established in the ask for Public Comment to include a detective and a lawyer 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 incredibly 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 brokers.
Nevertheless, the connected bill will not propose particular authorization for those two positions. Offered the present belief favoring the addition of state staff just as a final resort, we believe that the legislative committee that considers this bill (as well as the CEI anti-predatory financing bill aswell) should make such determinations after assessing the necessity for such resources and after hearing from all events about them.
Issue #27: Other associated proposals
The connected bill (Appendix no. 1) contains three proposals perhaps maybe not particularly addressed in the request Public Comment, but which are relevant to your problem of legislation of home loan lending. The foremost is found in area one of the bill. This part would allow (although not need) Maine to become listed on in a significant mortgage that is multi-state certification project that is presently underway in a number of states. Exactly exactly exactly What began as an attempt to look at license that is uniform kinds has resulted in a proposition, sponsored by two split state regulatory associations (the meeting of State Bank Supervisors, or CSBS, while the United states Association of Residential Mortgage Regulators, or AARMR), to operate a centralized certification system which could accommodate the requirements of loan providers, specially big home loan organizations with operations in lots of states. Patterned following the nationwide registration procedure that regulates the securities industry, this technique is made to lessen the burden on candidates as well as on participating states. Although some concerns stay to be answered, OCCR believes it wise to include destination the legislation required to allow Maine to participate this work, if so when it’s about time for such a move.
The next brand new problem can be found in Section 4 associated with bill, and it also proposes to broaden protection of Article 9 regarding the credit rating Code to encompass a kind of loan that few regulators knew existed until recently; particularly, a purchase-money loan that is second-lien. Most often occurring each time a loan provider splits up the total purchase quantity in to a first-lien loan and a higher-rate, second-lien loan, this kind of loan is wholly unregulated under present legislation as a result of verbiage of 9-A MRSA § 9-101, “Scope, ” which indicates that this article covers just first-lien loans. OCCR is regarding the viewpoint that such loans deserve at the very least the protection granted purchase that is first-lien or refinancing loans, if you don’t the protections regarding the complete Code relevant to second-mortgage, non-purchase, non-refinance loans.
The 3rd and final “new” proposition can be found in Section 8 associated with the bill connected as Appendix #1. It entails that loan agents disclose to customers quantities compensated to those agents by loan providers in the shape of yield spread premiums. Yield spread premiums enhance whilst the rate of interest on that loan increases, leading to a reason for a financial loan broker to set up a high-cost loan even in the event that customer may be eligible for a diminished price. We usually do not propose to limit the payment of these premiums; and then need so it be disclosed into the debtor. We feel this will be a step that is important the aim of monetary transparency into the consumer-broker relationship.
We feel the above actions installment loans louisiana, as further modified or supplemented through the legislative procedure, will play a crucial role in helping to fight predatory mortgage financing in Maine. Our company is additionally conscious that the so-called CEI bill is likewise considered by the Legislature during its future session, most likely by the exact same committee, as well as or just around the exact same time. Although the OCCR proposals are far more moderate compared to those proposed by CEI, we believe that the OCCR provisions are well-suited to your certain problems that have actually arisen in this State, as well as Maine’s restricted market share for mortgages and its concomitant restricted capability to influence major nationwide financing forces. Nevertheless, 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 all 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 Methods
Be it enacted because of the social people of this State of Maine to read through:
Sec. 1. 9-A MRSA, part 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 new requirements as are essential for the State to take part in the machine, including authorizing the device to gather permit charges on the behalf of the state and remit those costs towards the State, authorizing collection charges because of the machine to fund its solutions, amending definitions in this name to conform with consistent forms used by the machine, authorizing the device to process and keep maintaining permit documents, and authorizing utilization of the system’s consistent forms, upon the manager’s discovering that each brand brand new requirement is in keeping with the general public interest and also the purposes for this Title; and
C. Demand a credit and history research of each and every applicant for the permit as that loan broker, a supervised lender that’s not just a supervised standard bank, or that 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 part. The expense of such investigations must certanly be charged to your candidates. Information obtained or held by the manager pursuant for this subsection will probably be non-public pursuant to part 6-116 and never at the mercy of disclosure.