Although Maine is typically considered a foreclosure that is“judicial state, Maine legislation nevertheless allows personal foreclosures. Nonetheless, the rules for such elements as solution of procedure, and accounting for equity within the property foreclosed upon, differ between personal and foreclosures that are judicial. We at OCCR feel that people kinds of conditions ought to be constant both in general public and private foreclosures, considering that the stakes (losing ownership of one’s house) are exactly the same. Therefore, the legislation that is proposedAppendix no. 1, part 12) proposes to put on equivalent sort of solution of procedure criteria to personal foreclosures as it is now needed in judicial foreclosures; and extra parts (part 13 and part 14) would repeal the present right regarding the foreclosing party to postpone purchase of home for just two years and thereafter wthhold the entirety associated with the home without any responsibility to account towards the customer for just about any equity. Alternatively, we propose enactment of a requirement that the house be offered to your bidder that is highest, since is done in judicial foreclosures, with any equity in excess of your debt plus expenses incurred into the action, being came back to the buyer following the purchase.
Issue #25: Payoff demands
The matter of lenders’ responses to payoff requests ended up being a part of our ask 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 now have perhaps not included any brand brand new legislative proposition to deal with this dilemma. We now believe that any issues could be prevented 1) by vigorously enforcing present Maine legislation that needs a loan provider or servicer to quickly 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 usage of unconscionable conduct to cause a customer to come into a credit transaction). As long as lenders conform to the present statutory timeframes for creating a payoff figure, our company is maybe perhaps perhaps not for the viewpoint which they must certanly be (or lawfully might be) avoided from offering their clients a significantly better deal.
Problem #26: feasible addition of an OCCR staff lawyer and/or a detective to greatly help avoid predatory financing practices
The proposition established when you look at the ask for Public Comment to include an investigator 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 quickly protect consumers by and flexibly answer allegations by customers, or by rivals, of predatory activity by loan providers or loan agents.
Nonetheless, the attached bill doesn’t propose particular authorization for those two jobs. Because of the present belief favoring the addition of state staff just as a final resort, we believe the legislative committee that considers this bill (in addition to 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 attached bill (Appendix number 1) contains three proposals perhaps maybe perhaps not particularly addressed in the obtain Public Comment, but which are relevant into the problem of legislation of home loan lending. The very first is found in part one of the bill. This part would allow (although not need) Maine to become listed on in a significant multi-state home loan company certification project that is presently underway in lot of states. Just just What began as an endeavor to consider license that is uniform types has resulted in a proposition, sponsored by two split state regulatory associations (the meeting of State Bank Supervisors, or CSBS, therefore the United states Association of Residential Mortgage Regulators, or AARMR), to operate a centralized certification system that may accommodate the requirements of lenders, specially big home loan businesses with operations in a lot of states. Patterned following the nationwide registration procedure that regulates the securities industry, this technique was designed to lower the burden on applicants as well as on participating states. The legislation necessary to enable Maine to join installment loans online montana direct lenders 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 new problem can be found in Section 4 associated with bill, plus it proposes to broaden protection of Article 9 regarding the credit rating Code to encompass a form of loan that few regulators knew existed until recently; particularly, a second-lien purchase-money loan. Mostly occurring each time a loan provider splits up the purchase that is total into a first-lien loan and a higher-rate, second-lien loan, this sort of loan is wholly unregulated under present legislation as a result of verbiage of 9-A MRSA § 9-101, “Scope, ” which indicates that the content covers only first-lien loans. OCCR is associated with the viewpoint that such loans deserve at the least the protection granted first-lien purchase money or refinancing loans, or even the protections of this complete Code relevant to second-mortgage, non-purchase, non-refinance loans.
The 3rd and final “new” proposal is situated in Section 8 associated with bill attached as Appendix #1. It needs 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 since the interest rate on financing increases, leading to a reason for a financial loan broker to set up a high-cost loan even in the event that consumer may be eligible for a a lowered price. We usually do not propose to limit the re re payment of these premiums; simply to need it be disclosed towards the debtor. We feel this is certainly a step that is important the purpose of monetary transparency into the consumer-broker relationship.
We have the above actions, as further modified or supplemented through the legislative procedure, will play a crucial role in helping to fight predatory home loan financing in Maine. Our company is additionally mindful that the so-called CEI bill is likewise considered by the Legislature during its future session, most likely by the exact exact exact same committee, as well as or around the time that is same. Although the OCCR proposals are far more moderate compared to those proposed by CEI, we believe that the OCCR conditions are well-suited to your certain problems that have actually arisen in this State, also to Maine’s restricted share of the market for mortgages and its concomitant restricted power to influence major nationwide financing forces. Nonetheless, we additionally feel highly that CEI’s bill deserves severe debate, since Maine customers will in the long run reap the benefits of a strenuous conversation of all of the viable methods to the process of preventing mortgage lending that is predatory.
William N. Lund, Director
Office of Credit Rating Regulation
123 rd MAINE LEGISLATURE
FIRST AVERAGE SESSION – 2007
Legislative Document No. ___
An Act to avoid Predatory Mortgage Lending Methods
Be it enacted by the social people regarding the State of Maine to read through:
Sec. 1. 9-A MRSA, area 6-104-A is enacted to learn:
Sec. 6-104-A. For purposes of playing the establishment and utilization of a uniform multistate automated certification system (hereinafter the “system”) for loan brokers, supervised lenders that aren’t supervised banking institutions, and loan that is individual thereof, the manager of this workplace of credit rating Regulation may:
A. Modify by rule 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 for the State to take part in the machine, including authorizing the device to gather permit costs on the part of their state and remit those charges into 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 system, 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 together with purposes with this Title; and
C. Need a credit and back ground research of every applicant for the permit as that loan broker, a supervised loan provider that’s not really a supervised standard bank, or that loan officer thereof, by means including fingerprint checks for state and nationwide unlawful records, commencing at such time given that State joins the machine pursuant for this area. The price of such investigations must certanly be charged towards the candidates. Information obtained or held by the manager pursuant for this subsection will probably be non-public pursuant to area 6-116 and never susceptible to disclosure.