Foreclosure Law in Maine
In Farmington, Maine, foreclosure is a process through which a lender that issued a mortgage loan retakes possession of the property that was bought with the mortgage in the event that the borrower has defaulted on his or her payments.
When individuals are facing foreclosure, it normally involves a house. The bank will acquire the house with the intent of selling it at an auction, hoping to cover whatever's left on the mortgage, giving them at least a chance to break even on the loan.
Like every other state in the U.S., Maine authorizes homeowners facing foreclosure to opt for a foreclosure by judicial sale. This is a procedure through which a court oversees the sale of the house by the lender. The purpose is to see that the lender takes reasonable steps to notify the public of the auction, and other steps to ensure that the house sells for the highest price possible. This is meant to protect the borrower, making it less likely that they'll have to pay a large deficiency judgment (the remaining amount due on the mortgage if the house sells for less than the remaining balance).
In some states, original mortgages are regarded "non-recourse" loans. This means that once the house or other property that secured the mortgage is sold, and if it sells for less than the balance of the mortgage, the lender has to absorb the loss, and cannot sue the borrower for the remainder. This normally does not apply to second mortgages or refinanced loans.
How to Possibly Avoid Foreclosure in Farmington, Maine
Communication between you and your lender is perhaps the most significant way to prevent foreclosure. Ignoring the issue is guaranteed to be counterproductive. Honesty is the best policy when it comes to dealing with lenders.
Bear in mind that banks aren't in the business of real estate speculation - they're in the business of lending money, and making profits through interest on their loans. In short, the bank doesn't really want your house - they'd much rather have you continue making your mortgage payments. For banks, foreclosing on a home is a last resort. Essentially, nobody likes foreclosures, and everyone wants to prevent them.
Because banks don't specifically enjoy foreclosing, they will probably be willing to work out an alternative payment plan with you, if necessary. Nonetheless, if you think that this might be needed in the near future, you should contact your lender immediately. The sooner they know about it, the more options you have.
As a last resort, you might consider a "short sale," which results in loss of the home, but it normally leads to a great deal of the debt on the mortgage being forgiven. Basically, a short sale in Maine involves selling the house for whatever price it can fetch. The proceeds from the sale go to the lender, and if it sells for less than what's left on the mortgage, the balance of the debt is forgiven.
Can a Farmington, Maine real estate attorney help?
If you feel that your home is close to being foreclosed in Farmington, Maine, and want to try to prevent this, the advice and assistance of an accomplished real estate lawyer can mean the difference between keeping or losing your home.