Maine Revised Statutes

(1) A high-rate, high-fee mortgage may not include payment terms under which the outstanding principal balance or accrued interest will increase at any time over the course of the loan because the regularly scheduled periodic payments do not cover the full amount of interest due.

(2) A high-rate, high-fee mortgage may not contain a provision that increases the interest rate after default. This subparagraph does not apply to interest rate changes in a variable rate loan otherwise consistent with the provisions of the loan documents, as long as the change in the interest rate is not triggered by the event of default or the acceleration of the indebtedness.

(3) If the date of maturity of a high-rate, high-fee mortgage is accelerated due to default and the consumer is entitled to a rebate of interest, that rebate must be computed by a method that is not less favorable than the actuarial method, as that term is defined in the federal Housing and Community Development Act of 1992, Public Law No. 102-550, Section 933(d)106 Stat. 3672, 3892 (1992) and 15 United States Code, Section 1615.

(4) A high-rate, high-fee mortgage may not include terms under which more than 2 periodic payments required under the loan are consolidated and paid in advance from the loan proceeds provided to the borrower.

(5) A creditor may not make a payment to a contractor under a home improvement contract from amounts extended as credit under a high-rate, high-fee mortgage except:

(6) All high-rate, high-fee mortgage documents that create a debt or pledge property as collateral must contain the following notice on the first page in a conspicuous manner: "Notice: This is a mortgage subject to special rules under the federal Truth in Lending Act. Purchasers or assignees of this mortgage could be liable for all claims and defenses with respect to the mortgage that the borrower could assert against the creditor. Maine law also provides for the liability of purchasers or assignees of this high-rate, high-fee loan."

(7) For a high-rate, high-fee mortgage loan with a term of less than 5 years, the payment schedule may not include regular payments that when aggregated do not fully amortize the outstanding principal balance.

(8) A high-rate, high-fee mortgage loan may not include a demand feature that permits the creditor to terminate the loan in advance of the original maturity date and to demand repayment of the entire outstanding balance except in the following circumstances:

(9) A creditor may not extend a high-rate, high-fee mortgage to a consumer based on the value of the consumer's collateral without regard to the consumer's ability to pay as described in section 8-206-I, subsection 1, paragraph A.

(10) High-rate, high-fee mortgages are subject to rules relating to escrows as described in section 8-206-I, subsection 1, paragraph C. [2009, c. 362, Pt. A, §12 (NEW).]

(1) In connection with a high-rate, high-fee mortgage, a creditor may not directly or indirectly finance any points or fees.

(2) In addition to the limitation found in paragraph A, subparagraph (7), a high-rate, high-fee mortgage may not contain a scheduled payment that is more than twice as large as the average of earlier scheduled payments. This subparagraph does not apply when the payment schedule is adjusted to the seasonal or irregular income of the borrower.

(3) A creditor may not make a high-rate, high-fee mortgage without first receiving certification from a counselor with a 3rd-party, nonprofit organization approved by the United States Department of Housing and Urban Development, a housing financing agency of this State or the Bureau of Consumer Credit Protection that the borrower has received counseling on the advisability of the loan transaction.

(4) A prepayment fee or penalty may not be included in the loan documents or charged under the terms of a high-rate, high-fee mortgage. [2009, c. 362, Pt. A, §12 (NEW).]

(1) Has in place, at the time of the purchase or assignment of the subject loan, policies that expressly prohibit its purchase or acceptance of assignment of any high-rate, high-fee mortgages;

(2) Requires by contract that a seller or assignor of residential mortgage loans to the purchaser or assignee represent and warrant to the purchaser or assignee that either the seller or assignor will not sell or assign any high-rate, high-fee mortgages to the purchaser or assignee, or the seller or assignor is a beneficiary of a representation and warranty from a previous seller or assignor to that effect; and

(3) Exercises reasonable due diligence, at the time of purchase or assignment of residential mortgage loans or within a reasonable period of time after the purchase or assignment of such residential mortgage loans, intended by the purchaser or assignee to prevent the purchaser or assignee from purchasing or taking assignment of any high-rate, high-fee mortgages. For purposes of this subparagraph, reasonable due diligence must provide for sampling and may not require loan-by-loan review.

(1) Within 5 years of the closing of a high-rate, high-fee mortgage, the borrower may assert a violation of this section in connection with the loan as an original action; and

(2) Within 10 years of the closing of a high-rate, high-fee mortgage, after an action to collect on the residential mortgage loan or foreclose on the collateral securing the residential mortgage loan has been initiated or the debt arising from the residential mortgage loan has been accelerated or the residential mortgage loan has become 60 days in default, the borrower may assert any defense, claim or counterclaim or action to enjoin foreclosure or preserve or obtain possession of the property that secures the loan.