January 2024
"The Law Court, as it said itself, is moving on from 'casino-by-court'."
To read the full decision, please click the link below. 2024 ME 2 Finch (maine.gov)
The End to "Free House" Decisions in Maine
This week the Maine Law Court overturned the “one and done” foreclosure rule in Maine which had resulted in debtors receiving “free houses” since 2017 through miniscule, and frequently irrelevant, discrepancies in legitimate demand letters provided to debtors under Title 14 § 6111. The Law Court specifically found that such a rule, (which received its legitimacy under the Deschaine/Pushard cases) created an anomaly only for Maine cases so that if there was a technical defect in a foreclosure notice, no further action could be taken to enforce the note or mortgage. Maine has now joined the rest of America in declaring that a typo in a demand letter will not result in the debtor receiving a free house. Maine has waited with anticipation for the decisions in Finch v. U.S. Bank, 2024 ME 2 and J.P. Morgan Mortgage Acquisition Corp. v. Camille J. Moulton, Oxf-21-412 (Argued Nov. 1, 2022, and in which Doonan, Graves & Longoria, LLC filed an amicus brief asking for the Rule of Pushard to be reversed)The Law Court, as it said itself, is moving on from “casino-by-court”.
Since Doonan, Graves & Longoria has waged these battles for decades, some perspective is helpful on how far we have come on this long journey. At one point Maine stood alone, in a number of respects, which seriously chilled lending, impeded servicing, and hamstrung loan sales. Maine had a singular perspective on evidence, which required that ALL servicers that had touched a loan must testify as to the related business records and Maine alone required non-existent probate estates to be joined as necessary parties. Maine defense counsel even argued that law firms could not send acceleration notices under the Maine Statute. We fought these rules in both the State and Federal Courts and through the Jones, Needham and Keniston decisions confirmed basic business records exceptions to the hearsay rule, agency relationships apply to foreclosure matters, and fictional parties are not required to be named in foreclosure cases.
Finch, in essence, adopts the argument we made in our Amicus that the demand letter, in and of itself, does not accelerate the entire loan. There are a number of points that are very relevant in this 67-page decision that represents a sea-change in Maine Law. The Law Court suggests that sanctions may be used more frequently by trial courts for abuses in the foreclosure context. Additionally, there is clearly a risk that if a demand is defective any interest that accrues from the original default to the finding that the demand is defective is not collectable.
Today we learned that Jimmy Stewart was right, you can succeed by fighting for what seems to be a lost cause. We will continue to fight for our clients. We will review pending litigation and outline strategic recommendations for all impacted files.
If you would like to learn more about this decision or our Default Services in Maine, Massachusetts and New Hampshire please reach out and contact our Business Development Lead, Beth Stillings, to set up time to discuss. bs@dgandl.com
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