Foreclosure Diversion Program Announcement About Foreclosure Actions Instituted By Condominium Associations

December 1, 2010

There has been some recent confusion regarding whether foreclosure actions brought by condominium associations to collect on liens established pursuant to 33 M.R.S. § 1603-116(a) are eligible for referral to the Foreclosure Diversion Program for mediation. These cases are not eligible. Although these liens "may be foreclosed in like manner as a mortgage on real estate," 33 M.R.S. §1603-116(a) (2009), actions foreclosing liens do not involve "foreclosures of mortgages on owner-occupied residential property" as provided for in the statute creating the Foreclosure Diversion Program. See 14 M.R.S. § 6321-A(3) (2009) ("Under the authority granted in Title 4, section 18-B, the court shall adopt rules to establish a foreclosure mediation program to provide mediation in actions for foreclosure of mortgages on owner-occupied residential property . . .")(emphasis added). Maine Rule of Civil Procedure 93 is in accordance, defining a diversion-eligible foreclosure as:

. . . [A]ny civil action initiated pursuant to title 14, chapter 713 of the Maine Revised Statutes (14 M.R.S. § 6101-6325) to foreclose on a property subject to a mortgage or other note or bond secured by that property, other than a State mortgage pursuant to 14 M.R.S.§ 6151-6153.

M.R. Civ. P. 93(a)(2) (emphasis added); see M.R. Civ. P. 93(b)(1).

However, because these actions are foreclosure actions, they are subject to the $200 administrative fee imposed upon all foreclosure actions. See JB-05-26 (A. 7-14) fn 6.

To help avoid further confusion, in these actions instituted by condominium associations, it is suggested that plaintiff's counsel avoid sending with the complaint the one page form notice developed by the Department of Professional and Financial Regulation, Bureau of Consumer Credit Protection, that permits the defendant to request mediation. This notice applies only to an "action for the foreclosure of a mortgage on an owner-occupied residential real property of no more than 4 units that is the primary residence of the owner-occupant . . ."14 M.R.S. § 6321-A(2).

The Manager of the Foreclosure Diversion Program, can be reached at FDMP@courts.maine.gov or at 822-0706 with any questions.