This matter is talked about with regards to problems #13 and #14, above. Conditions relating to prepayment charges have already been integrated to the draft legislation connected as Appendix #1; see part 3 and part 7 of the proposed legislation.
Problem #22: needing that “unpaid balance” figures reflect extra funds needed as prepayment penalties
Because a lot of customers have actually told OCCR which they didn’t understand these were at the mercy of a prepayment penalty until they attempted to cover their loan off early, this proposition might have needed that each and every time the lending company notified the debtor regarding the unpaid maine installment loans laws stability on the loan (for instance, upon demand, or with every month-to-month statement, or at year-end), the financial institution will be necessary to include into that stability the prepayment penalty, to offer a precise image of the particular buck quantity required to pay back the mortgage.
We felt that the proposition ended up being an easy and revolutionary method to avoid “payoff shock. ” Nonetheless, we’ve opted for to not consist of it inside our proposed legislation. This proposal would likely prove too difficult for lenders’ billing computers to accommodate, at least just for borrowers in the State of Maine like so many seemingly simple solutions to complex issues. We continue steadily to believe the idea has merit, and we additionally also note the actions other states have actually taken up to deal with, and indirectly discourage, such charges (Massachusetts, for instance, requires loan providers to incorporate prepayment charges within the “points-and-fees” calculation to find out whether extra “Section 32”-type defenses should always be imposed). But, until or unless other states or federal regulators follow the style, we believe it might be impracticable to need such calculations entirely for Maine loans.
Problem #23: High attorney’s fees when you look at the initial states of foreclosure or pre-foreclosure
The ask for Public Comment raised the problem of high early legal charges, because within our experience assisting customers that are delinquent inside their re payments it frequently seemed that loan providers incurred significant appropriate charges just after files had been delivered to lawyers with guidelines to start property foreclosure. The imposition of these high charges hindered the talents of most events to “unwind” the situation and obtain the consumer straight back on track, because along with gathering all delinquent re re payments, interest and belated costs, loan providers additionally demanded reimbursement of appropriate costs incurred up to now.
Just as much as we think this particular incident deserves scrutiny, we have been now of this viewpoint that the problem must be addressed by 1) requiring lenders to have particular information from their lawyers to show precisely how reported fees had been incurred very quickly; and, if required, 2) chatting with the lawyers and/or with all the Bar Overseers in egregious or duplicated situations. The attached legislation does not contain measures to address legal fees incurred at the pre-foreclosure stage for this reason.
Issue #24: Personal foreclosures
Although Maine is usually considered a foreclosure that is“judicial state, Maine legislation still allows personal foreclosures. Nonetheless, the principles for such elements as service of procedure, and accounting for equity within the property foreclosed upon, vary between personal and foreclosures that are judicial. We at OCCR feel that people kinds of conditions must certanly 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 no. 1, part 12) proposes to put on similar kind of solution of procedure criteria to personal foreclosures as happens to be needed in judicial foreclosures; and extra parts (part 13 and part 14) would repeal the existing right for the foreclosing party to postpone purchase of home for just two years and thereafter wthhold the entirety associated with home without any responsibility to account to your customer for just about any equity. Rather, we propose enactment of a necessity that the home be offered towards the greatest bidder, as it is carried out in judicial foreclosures, with any equity more than your debt plus expenses incurred in the action, being gone back to the buyer following the purchase.
Issue #25: Payoff needs
The problem of lenders’ responses to payoff needs had been a part of 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 maybe not included any brand brand new legislative proposition to deal with this dilemma. We now believe any issues could be avoided 1) by vigorously enforcing current Maine legislation that takes a lender 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 unconscionable conduct to cause a customer to come into a credit deal). As long as lenders conform to the present timeframes that are statutory creating a payoff figure, we have been maybe not associated with viewpoint which they ought to be (or lawfully might be) avoided from providing their clients an improved deal.
Problem #26: feasible addition of an OCCR staff lawyer and/or an detective to greatly help avoid lending that is predatory
The proposition established when you look at the ask for Public Comment to incorporate an detective and legal counsel to OCCR’s staff came across with unanimous help from customer groups and from industry commenters. We at OCCR believe that this type of step will be exceptionally useful in our efforts to quickly protect consumers by and flexibly react to allegations by customers, or by rivals, of predatory activity by loan providers or loan brokers.
Nonetheless, the connected bill will not propose particular authorization for those two roles. 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 any such determinations after assessing the necessity for such resources and after hearing from all parties on the subject.