Maine’s top court will begin weighing two cases Tuesday that could rewrite the rules for how home foreclosures are handled in the state.

The cases before the Maine Supreme Judicial Court focus on whether a mortgage servicer can try to foreclose on a home a second time, after previously losing the foreclosure case because the company failed to present proper evidence of ownership and the amount owed on the loan.

Under law that dates to 1997 and was upheld in 2017, the mortgage company can’t refile. In some cases where the evidence is lacking, the courts can even require that the lien on the property be removed – in other words, the rest of the mortgage debt is forgiven and the home is owned free and clear by the borrower, said Thomas A. Cox of Yarmouth.

In the current case, J.P. Morgan v. Moulton, the court is being asked to review a South Paris District Court decision last year that found the mortgage lender, Morgan, didn’t provide an adequate default notice and information for the plaintiff to repay the loan.

Cox, who has provided free legal representation for hundreds of borrowers in foreclosure cases, was the lawyer who discovered the “robo-signing” scandal during the nationwide foreclosure crisis that began in 2008. Mortgage servicing company officials were signing hundreds or thousands of foreclosure documents daily without verifying, as the law required, that the information in those papers was accurate.

In some cases, the mortgage servicing companies had a hard time proving that they actually owned the mortgages, which often passed through a lot of hands in the years before the real estate market crashed in the financial meltdown of the late 2000s.


In response, Maine courts and the Legislature clamped down on lender practices to make sure that the mortgage servicing companies were pursuing foreclosures properly.

Cox said that culminated in a ruling five years ago that led to the courts limiting mortgage companies’ ability to file a new foreclosure case if they failed to present proper evidence the first time around.

He said that made the system fair because those mortgage companies have another recourse and can sue their lawyer or the lawyer of the mortgage servicer if the lien on the property is released after an initial court case is thrown out.

“If a bank loses a foreclosure case, it’s either due to the negligence of the servicer or the negligence of the servicer’s lawyer,” Cox said. He said there have only been about 20 cases in the state where a lien was removed after the lender or mortgage servicer lost a case, so the decision hasn’t led to a huge wave of homeowners having the liens on their houses removed.


Cox said he thinks the Supreme Judicial Court decided to hear the two cases on their calendar for Tuesday because of a significant change in the makeup of the court – Gov. Janet Mills has appointed four of the seven justices since she became governor in 2019.


“Simply because there’s new justices on the court, that is not a reason to change established law,” he said. “What this Law Court is doing is making me realize that I am no longer practicing law in a fair or just legal system.”

Cox also said that he thinks one of the justices on the case should recuse herself from participating in the decision because she represented a mortgage company in one of the 2017 cases and wrote a “friend of the court” brief for the Maine Bankers Association in the other.

So far Justice Catherine Connors has declined to recuse herself from the case. A spokeswoman for the court did not return a call Monday to find out of she still planned to hear the case.


Decisions on whether a judge should recuse themselves are largely up to the judge, said Dmitry Bam, vice dean of the University of Maine School of Law.

“Each judge or justice decides for themselves,” he said and noted there have been only a few cases where lawyers have appealed that decision to the U.S. Supreme Court and the court told a judge that recusal was needed.


There are some “red lines” that clearly call for a recusal, Bam said, such as owning stock in a company that is before the court, a relative’s involvement in a case or previous participation the case.

But even then, it’s largely up to judges to decide if they can’t be impartial.

“It’s basically a judge deciding his own case,” Bam said, and there’s no process for other justices to call for a colleague to recuse themselves.

He said the system is set up this way because judges who may have been involved in similar cases aren’t bound by their previous views.

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