PORTLAND, Maine — A mortgage company can’t bring a second foreclosure action against a borrower after losing a similar foreclosure in the court system, Maine’s supreme court ruled.
The court on Thursday unanimously upheld a ruling against mortgage giant Fannie Mae, which tried to launch a second foreclosure on a property in Lincoln after a judge threw out the original case.
“It reinforces case law that says you really get only one bite of the apple,” said James Cloutier, attorney for Patricia and Paul Deschaine, who own the home in Lincoln.
The Deschaines took out a loan on principal of $127,920 to buy the property in October 2004, and Fannie Mae brought a foreclosure proceeding in 2011 after finding the Dechaines in default.
But Fannie Mae’s lawyers failed to respond to the judge’s orders in the case, and the judge eventually dismissed the case altogether in 2012.
More than a year later, Fannie Mae sent a new notice of default to the Deschaines on new grounds. The Deschaines sought an early ruling from a judge before the case went to trial, arguing the complaint was essentially the same because it was focused on the same loan and parties.
The mortgage problems that the couple experienced are familiar to many living in rural Maine, which has been hard hit by paper mill closings.
As the Lincoln Pulp and Paper Co. mill struggled, and eventually closed, the couple’s property value plummeted by 70 percent, Cloutier said.
The couple ended up owing more than the value of the property, he said. “They were deeply underwater. It’s not an uncommon story in rural Maine,” he said.
Lawyers for Fannie Mae didn’t immediately return a call seeking comment. A phone number for Paul Deschaine, who still lives in the Lincoln home, rang unanswered. His wife divides her time between Maine and North Carolina, their lawyer said.