This matter is talked about pertaining to problems #13 and #14, above. Conditions relating to prepayment charges have now been included in to the draft legislation connected as Appendix # 1; see area 3 and part 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 actually told OCCR which they didn’t understand they certainly were at the mercy of a prepayment penalty until they attempted to cover their loan off early, this proposition will have necessary that each and every time the lending company notified the debtor associated with unpaid stability on the loan (for instance, upon demand, or with every month-to-month declaration, or at year-end), the financial institution will be necessary to add into that stability the prepayment penalty, to deliver a precise image of the specific buck quantity required to pay back the mortgage.
We felt that the proposal ended up being a easy and revolutionary option to avoid “payoff shock. ” Nonetheless, we have opted for to not consist of it within our proposed legislation. Like a lot of apparently easy methods to complex problems, this proposition would probably show too problematic for loan providers’ billing computers to support, at the very least simply for borrowers when you look at the State of Maine. We continue to believe that the idea has merit, so we also note the actions other states have taken up to deal with, and indirectly discourage, such charges (Massachusetts, for instance, calls for loan providers to incorporate prepayment charges within the “points-and-fees” calculation to find out whether extra “Section 32”-type protections should really be imposed). But, until or unless other states or federal regulators follow the style, we believe that it might 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 obtain Public Comment raised the problem of high very very early appropriate charges, because inside our experience assisting customers that are delinquent within their re payments it usually seemed that loan providers incurred significant appropriate costs just after files had been provided for attorneys with directions to start foreclosure. The imposition of these high charges hindered the https://speedyloan.net/installment-loans-me talents of all of the events to “unwind” the situation to get the consumer back on track, because as well as gathering all delinquent re re payments, interest and belated costs, loan providers additionally demanded reimbursement of appropriate costs incurred up to now.
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. That is why, the connected legislation does not include measures to deal with appropriate costs incurred in the pre-foreclosure phase.
Issue #24: Personal foreclosures
Although Maine is normally considered a foreclosure that is“judicial state, Maine legislation nevertheless allows personal foreclosures. But, the guidelines for such elements as solution of procedure, and accounting for equity into the property foreclosed upon, vary between personal and judicial foreclosures. We at OCCR feel that people kinds of conditions must certanly be consistent both in public and private foreclosures, because the stakes (losing ownership of one’s house) are the same. Consequently, the proposed legislation (Appendix #1, part 12) proposes to put on similar sort of solution of procedure requirements to personal foreclosures as it happens to be needed in judicial foreclosures; and extra parts (Section 13 and area 14) would repeal the existing right of this foreclosing party to wait purchase of home for just two years and thereafter wthhold the entirety associated with property without any responsibility to account towards the customer for just about any equity. Alternatively, we propose enactment of a requirement that the home be offered to your highest bidder, as it is carried out in judicial foreclosures, with any equity more than your debt plus expenses incurred when you look at the action, being returned to the customer following the purchase.
Issue #25: Payoff demands
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’ve perhaps maybe 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 current Maine legislation that needs a loan provider or servicer to immediately react to a request 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 (for instance, 9-A MRSA § 9-402 prohibits the employment of unconscionable conduct to induce a customer to come into a credit deal). As long as lenders conform to the present statutory timeframes for creating a payoff figure, we’re perhaps perhaps perhaps not regarding the viewpoint which they should really be (or lawfully could possibly be) prevented from providing their clients a far better deal.
Problem #26: feasible addition of a OCCR staff lawyer and/or an detective to greatly help avoid lending that is predatory
The proposition established in the request Public Comment to add a 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 will be excessively useful in our efforts to quickly protect consumers by and flexibly react to allegations by customers, or by competitors, of predatory activity by loan providers or loan agents.
Nevertheless, 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 (while the CEI anti-predatory financing bill aswell) should make such determinations after assessing the need for such resources and after hearing from all events about the subject.
