In Maine, lenders may foreclose on mortgages in default by using either a judicial or strict foreclosure process.
Although Maine allows lenders to pursue foreclosure by judicial methods, which involves filing a lawsuit to obtain a court order to foreclose, it is only used in special circumstances. The primary method of foreclosure in Maine is strict foreclosure.
The strict foreclosure process is based on Maine's foreclosure doctrine in which the lender owns the property until the mortgage has been paid in full. If the borrower breaks any of the conditions established in the mortgage prior to the time the loan is paid in full, he or she will lose any right to the property and the lender will either take possession of the property or arrange for it's sale.
In either case, the borrower has either a three (3) month (post-1975 mortgages) or a twelve (12) month (pre-1975 mortgages) redemption period. If the lender has taken possession of the property, they must hold possession of it for the entire redemption period to finalize the foreclosure. If the lender chooses to sell the property without taking possession of it first, they must file an initial suit and then wait until the redemption period has passed to sell the property by special procedures set forth by the court.
The lender may file a for a deficiency judgment, but it is limited to the difference between the fair market value, as determined by an appraisal, and the balance of the loan in default.