Disclaimer: This article provides general information about Maine law. It does not constitute legal advice. Consult a qualified attorney for advice on your specific situation.
Detailed Answer
When a foreclosure or tax-sale in Maine generates surplus funds, the court allocates those funds according to a statutory priority scheme. Under 14 M.R.S. § 6321, distribution follows this order:
- Costs and expenses of the sale;
- Senior mortgage or lien balances;
- Subordinate liens and judgments in order of their recording date;
- Accrued interest or penalties due to lienholders;
- Balance to the former property owner (mortgagor).
To determine whether other creditors or lienholders may claim all or part of the surplus, follow these steps:
1. Perform a Real-Estate Lien Search
Visit the county registry of deeds where the property is recorded. Review all recorded documents—mortgages, deeds of trust, and notices of lis pendens. Note recording dates to establish lien priority.
2. Check Judicial and Tax Liens
Search the county clerk’s judgment docket for court judgments against the property owner. Contact the local tax collector or Maine Revenue Services to uncover any unpaid property tax liens or state tax liens.
3. Review UCC Filings
Access the Maine Secretary of State’s online UCC filing system to find any secured-party financing statements. These cover personal-property collateral and may attach to real estate assets.
4. Examine Foreclosure Notices and Court Filings
The foreclosure complaint or tax-lien petition often lists known junior lienholders. The court will issue a notice to creditors, who must file a formal claim—often within 30 days after the sale.
5. Confirm Through Court Records
Obtain a certified copy of the final foreclosure judgment or surplus-deposit order. The court file will include any claims already filed by lienholders.
Helpful Hints
- Priority Depends on Recording Date: Earlier-recorded liens receive payment before later ones.
- Keep Detailed Records: Track each public-records search and note filing dates.
- Use Online Portals: Many counties offer free online access to deed and judgment records.
- Watch Claim Deadlines: Creditors must timely file a proof of claim in the foreclosure case to participate in the distribution.
- Consult a Title Professional: A title abstractor or real-estate paralegal can streamline lien and UCC searches.