Issue #21: Effective notice of prepayment charges
This dilemma is talked about with regards to problems #13 and #14, above. Conditions relating to prepayment charges have already been integrated in to the draft legislation connected as Appendix # 1; see area 3 and area 7 of the proposed legislation.
Problem #22: needing that “unpaid balance” figures reflect extra funds needed as prepayment charges
Because a lot of customers have told OCCR which they didn’t understand these people were at the mercy of a prepayment penalty until they attempted to cover down their loan early, this proposition will have needed that each and every time the lending company notified the debtor associated with unpaid stability to their loan (for instance, upon demand, or with every month-to-month declaration, or at year-end), the financial institution is expected to include into that stability the prepayment penalty, to offer a detailed image of the particular buck quantity essential to pay back the mortgage.
We felt that the proposition ended up being a straightforward and revolutionary solution to prevent “payoff surprise. ” Nevertheless, we now have selected never to 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 that the style has merit, therefore we also note the actions other states have actually taken fully to deal with, and indirectly discourage, such penalties (Massachusetts, for instance, calls for loan providers to add prepayment charges when you look at the “points-and-fees” calculation to ascertain whether extra “Section 32”-type defenses ought to be imposed). But, until or unless other states or regulators that are federal the style, we believe that it could be impracticable to need such calculations entirely for Maine loans.
Problem #23: High attorney’s fees into the initial states of foreclosure or pre-foreclosure
The ask for Public Comment raised the problem of high very early fees that are legal because within our experience assisting customers who’re delinquent inside their re re payments it frequently seemed that loan providers incurred significant appropriate costs just after files had been delivered to lawyers with guidelines to start property property property foreclosure. The imposition of these high charges hindered the talents of most events to “unwind” the situation and acquire the consumer 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.
Just as much we are now of the opinion that the situation should be addressed by 1) requiring the lenders to obtain specific information from their attorneys to demonstrate exactly how claimed fees were incurred in a short time; and, if necessary, 2) communicating with the attorneys and/or with the Bar Overseers in egregious or repeated cases as we think this type of occurrence deserves scrutiny. 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 foreclosure that is“judicial state, Maine legislation nevertheless allows personal foreclosures. Nevertheless, the principles for such elements as solution of procedure, and accounting for equity when you look at the property foreclosed upon, vary between personal and judicial foreclosures. We at OCCR feel that people forms of provisions should really be consistent both in general public and private foreclosures, because the stakes (losing ownership of one’s house) are identical. Therefore, the legislation that is proposedAppendix number 1, area 12) proposes to use the exact same variety of solution of procedure criteria to personal foreclosures as it 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 property for just two years and thereafter wthhold the entirety regarding the home without any responsibility to account into the customer for just about any equity. Rather, we propose enactment of a requirement that the home be offered into the bidder that is highest, because is done in judicial foreclosures, with any equity more than your debt plus expenses incurred into the action, being gone back to the consumer following the purchase.
Issue #25: Payoff needs
The problem of lenders’ responses to payoff demands 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 perhaps not included any brand new legislative proposition to deal with this dilemma. We now believe that any dilemmas could be prevented 1) by vigorously enforcing Maine that is current law calls for a loan provider or servicer installment loans md to immediately 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 application of unconscionable conduct to cause a customer to enter a credit deal). As long as lenders adhere to the present timeframes that are statutory creating a payoff figure, we’re maybe maybe not associated with the opinion which they ought to be (or lawfully might be) avoided from providing their clients an improved deal.
Issue #26: Possible addition of an OCCR staff lawyer and/or a detective to greatly help prevent predatory financing methods
The proposition established in the request Public Comment to include a detective and a lawyer 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 could be incredibly useful in our efforts to quickly protect consumers by and flexibly react to allegations by consumers, or by rivals, of predatory activity by loan providers or loan agents.
Nevertheless, the connected bill will not propose particular authorization for those two jobs. Provided the sentiment that is current the addition of state staff just as a final resort, we believe the legislative committee that considers this bill (and also the CEI anti-predatory financing bill too) should make such determinations after assessing the necessity for such resources and after hearing from all events about them.