This dilemma is talked about pertaining to problems #13 and #14, above. Conditions relating to prepayment charges have now been integrated in to the draft legislation connected as Appendix # 1; see area 3 and area 7 of this proposed legislation.
Problem #22: needing that “unpaid balance” figures reflect extra funds needed as prepayment charges
Because a lot of consumers have actually told OCCR which they didn’t understand these were susceptible to a prepayment penalty until they attempted to cover down their loan early, this proposition will have needed that every time the lending company notified the debtor of this unpaid balance on the loan (for example, upon request, or with every month-to-month statement, or at year-end), the financial institution will be necessary to add into that stability the prepayment penalty, to give you an exact image of the particular buck quantity required to pay back the loan.
We felt that the proposition ended up being an easy and revolutionary method to prevent “payoff surprise. ” Nonetheless, we now have selected to not add 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 feel that the style has merit, and now we also note the actions other states have actually taken fully to deal with, and indirectly discourage, such penalties (Massachusetts, as an example, calls for loan providers to add prepayment charges in the “points-and-fees” calculation to ascertain whether extra “Section 32”-type defenses should always be imposed). But, until or unless other states or regulators that are federal the idea, we believe that it will be impracticable to need such calculations solely for Maine loans.
Issue #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 online installment loans in maryland their re payments it usually seemed that loan providers incurred significant appropriate costs right after files had been provided for lawyers with directions to start property property foreclosure. The imposition of these high charges hindered the talents of most events to “unwind” the situation and acquire the consumer back on track, because as well as gathering all delinquent re re payments, interest and belated charges, loan providers additionally demanded reimbursement of appropriate costs incurred up to now.
The maximum amount of 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. This is exactly why, the connected legislation will not include measures to deal with appropriate costs incurred in the pre-foreclosure phase.
Issue #24: Personal foreclosures
Although Maine is typically considered a “judicial property foreclosure” state, Maine legislation nevertheless permits personal foreclosures. Nonetheless, the principles for such elements as solution of procedure, and accounting for equity within the property foreclosed upon, vary between personal and judicial foreclosures. We at OCCR feel that people kinds of conditions ought to be constant both in general public and private foreclosures, considering that the stakes (losing ownership of one’s home) are exactly the same. Consequently, the proposed legislation (Appendix # 1, part 12) proposes to make use of the exact same form of solution of procedure requirements to private foreclosures as happens to be needed in judicial foreclosures; and extra sections (Section 13 and part 14) would repeal the existing right for the foreclosing party to postpone purchase of home for just two years and thereafter wthhold the entirety associated with home without any responsibility to account to your consumer for almost any equity. Rather, we propose enactment of a requirement that the house 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 demands
The matter of lenders’ responses to payoff needs was contained in our ask for Comment because we heard from people who once the customers asked for payoff numbers, their loan providers bombarded them with provides to entice them to not ever refinance along with other loan providers.
We now have maybe maybe not included any new proposal that is legislative deal with this problem. We now believe that any dilemmas could be prevented 1) by vigorously enforcing Maine that is current law needs a loan provider or servicer 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 lenders (as an example, 9-A MRSA § 9-402 forbids the utilization of unconscionable conduct to cause a customer to get into a credit deal). So long as lenders conform to the present timeframes that are statutory creating a payoff figure, we have been perhaps not for the viewpoint which they must be (or legitimately might be) avoided from providing their clients an improved deal.
Problem #26: feasible addition of an OCCR staff lawyer and/or an detective to simply help avoid predatory financing techniques
The proposition established in the ask for Public Comment to include an 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 kind of step could be excessively useful in our efforts to quickly protect consumers by and flexibly answer allegations by customers, or by rivals, of predatory activity by loan providers or loan agents.
But, the connected bill doesn’t propose authorization that is specific those two jobs. Because of the sentiment that is current the addition of state staff just as a final resort, we believe that the legislative committee that considers this bill (as well as the CEI anti-predatory financing bill also) should make such determinations after assessing the necessity for such resources and after hearing from all parties about the subject.