Maine and New Hampshire Legislative Update

Maine and New Hampshire Legislative Update

The Maine legislature recently amended its law that protects a homeowner’s equity of redemption in a foreclosure action. The Maine Consumer Credit Code (the “Code”) was amended to improve the foreclosure process by regulating mortgage loan servicers, effective September 19, 2017.  The New Hampshire legislature recently amended its law regarding the licensing for a mortgage loan originator, effective August 28, 2017.

 

MAINE LEGISLATIVE DOCUMENT 880/SENATE PAPER 280

 

Current law establishes a period of redemption after a judgment of foreclosure has issued.  During this time period, the borrower (or his successors, heirs and assigns) may pay the sum that the court determines to be due and payable, with interest, and a writ of possession may not issue until the expiration of the period of redemption.   The amendment to the law clarifies that this provision does not impair the right of a lender to exercise rights set forth in the security instrument to protect the mortgaged property.

 

MAINE LEGISLATIVE DOCUMENT 1292/SENATE PAPER 444

 

Definitions under the Code have been amended and a new one added as follows:

  • “Creditor” is amended to include a mortgage loan servicer;
  • “Mortgage loan servicer” means a person or organization that undertakes direct collection of payments from or enforcement of rights against borrowers arising from a supervised loan secured by a dwelling;
  • “Supervised lender” means a person authorized to make or take assignments of or to service supervised loans.

 

Unless a person is a supervised financial organization, a financial institution holding company, or a mutual holding company, or has first obtained a license from the Superintendent of Financial Institutions (“Administrator”) authorizing the person to make or service supervised loans, that person must not engage in the business of:

  • Making supervised loans;
  • Taking assignments of and undertaking direct collection of payments from or enforcement of rights from an office in Maine against borrowers arising from supervised loans; or
  • Servicing mortgage loans.

 

The Code requirements remain the same, except they have been amended to reference the act of “servicing” as follows:

  • Administrator must receive and act on all applications for licenses to make or service supervised loans;
  • License to make or service supervised loans may not be issued unless the Administrator finds that the financial responsibility, character and fitness of the applicant are such as to warrant belief that the business will be operated honestly and fairly under the law;
  • A licensee may conduct the business of making or servicing supervised loans only at or from any place of business for which the licensee holds a license and not under any other name than that in the license;
  • Administrator may file a complaint with the District Court to suspend or revoke a license to make, originate or service supervised loans if the Administrator has reason to believe:
  • that the licensee has violated the law or any rule or order; or
  • facts or conditions exist that would clearly have justified the Administrator in refusing to grant a license;
  • Administrator may, by order, suspend a license to make or service supervised loans, if the public interest or the protection of borrowers so requires;
  • Administrator may direct each licensee to file annual and quarterly reports relating to all supervised loans made, arranged or serviced by that licensee;
  • A supervised lender may not carry on other business for the purpose of evasion or violation of the law at a location where the supervised lender makes or services supervised loans.

 

This law applies to all consumer credit transactions made by creditors that are not supervised financial organizations and that:

  • Are made to finance or refinance the acquisition of real estate or the initial construction of a dwelling; or
  • Are secured by a first-lien mortgage on real estate; or
  • Provide servicing for either of those transactions.

 

New Hampshire Senate Bill 81

 

The New Hampshire Bank Commissioner (“Commissioner”) may conditionally approve an application for a mortgage loan originator license if the applicant is currently licensed as a loan originator in another state and has met the requirements under New Hampshire law for a license, except for the requirement to have completed 2 hours of New Hampshire mortgage law education.  The conditionally approved license will expire after 60 days if the applicant fails to provide the Commissioner with proof that he/she has obtained the 2 hours of New Hampshire mortgage law education and has passed a written test developed by the Nationwide Mortgage Licensing System and Registry.