The Waiver Problem in Maine Real Property Foreclosure Law: A Commercial Paper Perspective

Authors

Dennis M. Patterson, University of Maine School of Law

Abstract

When a mortgagee accepts from a mortgagor payment of part of a mortgage arrearage, does the mortgagee then waive its right to foreclose? Many bank counsel will say that the mortgagee does waive its right to foreclose, and they will point for authority to the broad holding of Savings & Loan Association of Bangor v. Tear. In that decision, the Maine Supreme Judicial Court, sitting as the Law Court, seemed to hold that a mortgagee waives its right to foreclose if it accepts tender of a late payment. This broad interpretation of the Savings & Loan decision has proven to be particularly vexatious to attorneys representing institutional mortgagees with multi-branch facilities, in that under this interpretation any attempt to foreclose a real estate mortgage substantially in arrears can be thwarted by the mortgagor's tender of a single loan payment at any branch of the bank. In other words, to halt a foreclosure action a mortgagor need only travel to a distant branch office, tender a single mortgage payment, and stop the institution's foreclosure action. Counsel faced with such a situation frequently choose to dismiss the foreclosure action and start anew, only to run the risk that the mortgagor will later repeat his act at another branch where he is unknown. In an age in which local banks have taken on regional faces, the possibility of such mortgagor action clearly poses a substantial challenge to the efficiency and economy of banking activity.

First Page

49

Recommended Citation

Dennis M. Patterson, The Waiver Problem in Maine Real Property Foreclosure Law: A Commercial Paper Perspective, 38 Me. L. Rev. 49 (1986).
Available at: https://digitalcommons.mainelaw.maine.edu/mlr/vol38/iss1/3