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An Act To Protect Consumers against Residential Real Estate Title Defects
Be it enacted by the People of the State of Maine as follows:
Sec. 1.  33 MRSA §508  is enacted to read:
§ 508. Nominee mortgagees
 
1.  Authority presumed.     A person or entity that is appointed the nominee mortgagee by the person or entity that holds legal title to a mortgage is presumed to have the authority to execute an assignment, partial release, discharge or other instrument that affects the title to the mortgaged property unless the person or entity making the appointment:
 
A.  Explicitly negates such authority within the instrument in which the appointment is made; or
 
B.  Executes a separate instrument that explicitly negates such authority and that is recorded in the registry of deeds within the county or district in which the mortgaged property is located.
 
2.  Instrument valid.     An assignment, partial release, discharge or other instrument affecting the title to mortgaged property or any interest in the property that is otherwise valid and that is executed by a nominee mortgagee with authority as provided in subsection 1 is valid even if the assignment, partial release, discharge or other instrument does not state the authority of the nominee mortgagee to take the action.
 
3.  Statement not a limitation of authority.     A statement in an instrument described in this section to the effect that, for purposes of recording, the nominee mortgagee is the mortgagee of record, or any statement of similar meaning, may not be considered to be a limitation upon the authority of the nominee mortgagee.
 
SUMMARY
The purpose of this bill is to protect consumers against defects in titles to real estate in which Mortgage Electronic Registration Systems, Inc., appears in the chain of title. Under current Maine law, according to Bank of America v. Greenleaf, 2014 ME 89, 102 A.3d 774, any action by Mortgage Electronic Registration Systems, Inc., other than the recording of a mortgage, is invalid and of no force or effect. A large proportion of Maine residential real estate transactions include Mortgage Electronic Registration Systems, Inc., in the chain of title, putting consumers at risk of a defect in the title to their property.
This bill amends Maine law to eliminate that risk by establishing the presumption that a nominee mortgagee has the authority to assign or otherwise affect the mortgage even if the instrument assigning authority to the nominee mortgagee does not specifically so state. The authority is not presumed if the instrument explicitly negates the authority or if a separate written instrument negates the authority and that instrument is recorded in the appropriate registry of deeds.