By Sonia J. Buck, Esq.

Brock & Scott,PLLC *

USFN Member (AL, CT, FL, GA, KY, ME, MD, MA, MI, NH, NJ, NC, OH, PA, RI, SC, TN, VA)

The Maine Law Court has requested amici briefs in an appeal filed by J.P. Morgan Mortgage Acquisition Corp., regarding key issues in Maine foreclosure law: strict statutory compliance with Maine’s demand letter statute and the res judicata effect of a judgment for a defendant based on a finding that a mortgagee’s demand letter failed to strictly comply.

The Oxford County (Maine) Superior Court ruled that J.P. Morgan failed to comply with 14 M.R.S.A. § 6111 (Maine’s comprehensive and unforgiving foreclosure demand letter statute), based on a discrepancy with respect to the total amount due. J.P. Morgan Mortgage Acquisition Corp., v. Camille J. Moulton, SOPDC-RE-19-02 (November 24, 2021, J. Tammy Hamm-Thompson, at page 7). Not only did the Superior Court find for the defendant homeowner, but the Court’s opinion further ruled that res judicata forever precluded a second foreclosure. Id. at pg. 9.  Going further, the Superior Court specifically ordered that judgment “shall enter for the Defendant, declaring that she holds title to the real property at issue, unencumbered by the mortgage and promissory note.” Id.

The Court relied on prior Maine case law that has resulted in “free homes” to defendants for even technical or minor noncompliance by the plaintiff with respect to the demand letter. That prior case law, most notably, FNMA v. Deschaine, 2017 ME 90, and Pushard v. Bank of America, 2017 ME 230, now has the potential to be overturned.

Although the request for the amici briefs centers around the preclusive effect of a judgment for the defendant based on the demand letter statute, it remains to be seen whether the Law Court will also provide guidance in Moulton as to the level of scrutiny the itemization and other components of a Maine demand letter will be subject to going forward.

Will minor defects in a demand letter render a note and a mortgage forever unenforceable? Stay tuned.

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