UPDATE* : The End to "Free House" Decisions in Maine Moulton Math Clarified | Doonan, Graves & Longoria, LLC

March 2024

Moulton Math Revised by Maine Law Court

To read the updated decision and order, please click the links below.

2024 ME 13 Moulton

2024-13 Order on Motion to Reconsider (Moulton)

The End to "Free House" Decisions in MaineUpdate:  Moulton Math Clarified

The Maine Law Court overturned the “one and done” foreclosure rule in Maine, which, since 2017, has resulted in debtors receiving “free houses” through 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 waited with anticipation for the decisions in Finch v. U.S. Bank, 2024 ME 2 (2024 WL 118478) and J.P. Morgan Mortgage Acquisition Corp. v. Camille J. Moulton (2024 ME 13), however as with many things, the controversy is in the details and it quickly became apparent that the “Math” for the re-demand, the formula outlined in Finch differed from that in Moulton.  A Motion to clarify Moulton was filed in early March and the Law Court addressed and responded quickly that it was the Finch formula that controlled. The Court specifically revised Paragraph 12 of the opinion as follows:

[¶12] In Finch v. U.S. Bank, N.A., we held that where a lender has not complied with the prerequisites to acceleration under Section 6111, a court cannot conclude that initiation of a foreclosure action nevertheless accelerates the note balance. 2024 ME 2, ¶ 6, --- A.3d ---. Therefore, when a court enters summary judgment against a lender or dismisses the lender’s foreclosure claim due to a deficient notice of the right to cure under Section 6111, the effect of the judgment or dismissal of the claim is to preclude any future claim for the unaccelerated balance due on the note as of the date of the judgment (unless the lender has asserted a separate claim for the unaccelerated balance due). Id. ¶¶ 51-52. It does not preclude the lender from bringing a future foreclosure claim based on a future default, nor does it discharge the entire mortgage or effect a transfer of title. Id. ¶ 52.

Any hesitation to dismiss and re-demand following these additional guideposts was addressed in a footnote commenting that while not appealed here, a lender’s Motion to Dismiss without prejudice to re-demand should be granted.  The Law Court noted, “J.P. Morgan did not raise, and we therefore do not address, any issue regarding the court’s denial of its motion to dismiss. Nonetheless, we note that such dismissal would be appropriate, especially in light of Finch, 2024 ME 2, --- A.3d ---.”

With this guidance we go forward and carefully assess and reassess, especially matters pending during the Covid years to confirm the foreclosure is brought on a compliant demand.

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