Foreclosure Law in Maine

In Gray, 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 usually 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 allows 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 usually does not apply to second mortgages or refinanced loans.

How to Possibly Avoid Foreclosure in Gray, 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.

Throughout all this, you should remember one thing: the bank doesn't really want your house. After all, banks aren't real estate speculators, they're mainly money lenders. They stand to make a great deal of money if you are able to make your mortgage payments until it's paid off. They're likely to make much less if they're forced to sell your house.

If you experience a sudden change in your financial situation, your lender, in an effort to keep you from defaulting, might be willing to accept lower monthly payments, at least temporarily.

Lastly, there is the "short sale." Usually considered a last resort, a short sale results in the borrower losing their home, but discharges almost all of their remaining mortgage debt. If the house is worth far less than the balance of the mortgage, this might be a good choice. In Maine, when a house is sold in a short sale, the proceeds go to the lender. If it sells for less than the mortgage balance, whatever's leftover is forgiven. If it sells for more, the surplus goes to the homeowner.

Can a Gray, Maine real estate attorney help?

If you are facing foreclosure in Gray, Maine, and want to do everything practicable to save your house, the assistance of a reputable real estate lawyer might prove invaluable.