This matter is talked about pertaining to problems #13 and #14, above. Conditions relating to prepayment charges have now been integrated to the draft legislation connected as Appendix no. 1; see part 3 and area 7 of this proposed legislation.
Issue #22: Requiring that “unpaid balance” figures reflect extra funds needed as prepayment charges
Because plenty customers have actually told OCCR which they didn’t understand these people were susceptible to 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 associated with the unpaid stability on the loan (for instance, upon demand, or with every month-to-month declaration, or at year-end), the lending company could be expected to include into that stability the prepayment penalty, to offer a precise image of the specific buck quantity required to repay the mortgage.
We felt that the proposition had been a simple and revolutionary solution to avoid “payoff shock. ” However, we’ve plumped for to not ever include it within 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 that the style has merit, and then we also note the actions other states have taken up to address, and indirectly discourage, such charges installment loans maine (Massachusetts, as an example, calls for loan providers to incorporate prepayment charges within the “points-and-fees” calculation to ascertain whether extra “Section 32”-type defenses should really be imposed). Nevertheless, until or unless other states or regulators that are federal the idea, we believe that it will be impracticable to need such calculations entirely for Maine loans.
Problem #23: High attorney’s fees into the initial states of pre-foreclosure or foreclosure
The obtain Public Comment raised the matter of high very very early appropriate charges, because inside our experience assisting customers who’re delinquent inside their re re re payments it usually seemed that loan providers incurred significant appropriate charges just after files were delivered to solicitors with directions to start property property foreclosure. The imposition of these high costs hindered the talents of all of the events to “unwind” the situation and obtain the consumer straight straight straight back on track, because along with collecting all delinquent re payments, interest and belated charges, loan providers additionally demanded reimbursement of appropriate costs incurred up to now.
The maximum amount of as we think this kind of incident deserves scrutiny, we have been now of this viewpoint that the problem ought to be addressed by 1) needing lenders to acquire particular information from their lawyers to show precisely how reported charges had been incurred very quickly; and, if required, 2) chatting with the lawyers and/or because of 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 normally considered a “judicial property foreclosure” state, Maine legislation nevertheless allows personal foreclosures. Nevertheless, the principles for such elements as solution of procedure, and accounting for equity into the property foreclosed upon, vary between personal and foreclosures that are judicial. We at OCCR feel that people kinds of conditions ought to be constant both in general general public and private foreclosures, because the stakes (losing ownership of one’s house) are exactly the same. Consequently, the legislation that is proposedAppendix # 1, part 12) proposes to make use of equivalent types of solution of procedure requirements to private foreclosures as is now needed in judicial foreclosures; and extra parts (part 13 and area 14) would repeal the existing right associated with the foreclosing party to wait purchase of home for just two years and thereafter wthhold the entirety associated with the property without any responsibility to account towards the customer for almost any equity. Rather, we propose enactment of a necessity that the home be offered towards the greatest bidder, as it is done in judicial foreclosures, with any equity more than your debt plus costs incurred within the action, being came back to the customer following the purchase.
Issue #25: Payoff needs
The matter of lenders’ responses to payoff needs had been incorporated into 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 not included any new proposal that is legislative deal with this problem. We currently believe that any problems may be avoided 1) by vigorously enforcing Maine that is current law calls for a loan provider or servicer to quickly answer 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 utilization of unconscionable conduct to cause a customer to come into a credit deal). As long as lenders conform to the present statutory timeframes for creating a payoff figure, we have been perhaps perhaps maybe not regarding the viewpoint they ought to be (or legitimately might be) avoided from providing their clients a much better deal.
Problem #26: feasible addition of an OCCR staff lawyer and/or an detective to simply help avoid lending that is predatory
The proposition established in the request Public Comment to include an detective and a legal professional to OCCR’s staff came across with unanimous help from customer teams and from industry commenters. We at OCCR believe that this type of step is acutely useful in our efforts to protect customers by quickly and flexibly react to allegations by customers, or by rivals, of predatory activity by loan providers or loan agents.
Nonetheless, the connected bill will not propose authorization that is specific those two roles. Because of the present belief favoring the addition of state staff just as a final resort, we believe that the legislative committee that considers this bill (therefore the 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.