Lack of Standing and 'Produce the Note' Defenses in Maine Foreclosure Cases

During the height of the mortgage securitization boom, residential loans originated by local banks in Portland, Bangor, and Augusta were bundled into Wall Street trusts and sold half a dozen times before a borrower ever missed a payment. In the rush to trade these loans electronically, banks routinely lost original promissory notes, relied on unverified rubber-stamped signatures, and used electronic registry nominees that never legally owned the underlying debt.

Unlike non-judicial states where a trustee can auction a home with minimal paperwork, Maine enforces one of the strictest judicial standing doctrines in the United States. Under 14 M.R.S. § 6321, a plaintiff filing a foreclosure complaint in a Maine court must prove an unbroken chain of title to both the promissory note and the mortgage deed at the exact moment the lawsuit commences. If the bank cannot produce admissible evidence establishing both halves of its ownership, the court lacks a justiciable controversy and must dismiss the foreclosure.

Maine's Bifurcated Standing Doctrine and the 'MERS' Defect

In many states, courts follow an informal rule that 'the mortgage automatically follows the note.' The Maine Supreme Judicial Court (sitting as the Law Court) explicitly rejected that shortcut in Mortgage Electronic Registration Systems, Inc. v. Saunders, 2 A.3d 289 (ME Supreme Judicial Court 2010) and Bank of America, N.A. v. Greenleaf, 96 A.3d 700 (ME Supreme Judicial Court 2014). Under Maine law, a foreclosure involves two separate legal instruments:

1. The Promissory Note: A negotiable instrument governed by Maine's Uniform Commercial Code, 11 M.R.S. § 3-1301, which represents the borrower's personal promise to repay the money.
2. The Mortgage Deed: A real property conveyance governed by Maine real estate law and 14 M.R.S. § 6321, which pledges the physical home as security for the note.

In Bank of America, N.A. v. Greenleaf, 96 A.3d 700 (ME Supreme Judicial Court 2014), Bank of America proved it held the borrower's endorsed promissory note, but its ownership of the mortgage relied on an assignment from Mortgage Electronic Registration Systems, Inc. (MERS). The Law Court held that a standard Maine mortgage grants MERS only the right to record the mortgage as the original lender's nominee-not ownership of the mortgage itself. Because MERS cannot assign rights it never possessed, any mortgage assignment executed solely by MERS is legally ineffective to transfer ownership of the mortgage. When the original lender has gone out of business without executing a direct assignment or a valid quitclaim ratification, the foreclosing bank lacks standing to foreclose, as reaffirmed in Homeward Residential, Inc. v. Gregor, 122 A.3d 947 (ME Supreme Judicial Court 2015).

Core Evidentiary Challenges to Note and Mortgage Ownership

Even when MERS is not involved, mortgage servicers and securitized trusts frequently stumble over three major evidentiary hurdles when attempting to prove standing under 14 M.R.S. § 6321.

Lost Note Affidavits

When a homeowner demands that the bank 'produce the note,' the plaintiff must generally demonstrate that it is the 'holder' in physical possession of the original wet-ink promissory note under 11 M.R.S. § 3-1301(1), as explained in Bank of America, N.A. v. Cloutier, 61 A.3d 1242 (ME Supreme Judicial Court 2013). If the bank admits the original note was lost, destroyed, or stolen during a servicing transfer, it cannot simply file a conclusory 'Lost Note Affidavit' and expect a rubber-stamp judgment.

Instead, the lender must satisfy every statutory requirement of 11 M.R.S. § 3-1309:

• Possession and Entitlement at the Time of Loss: Under 11 M.R.S. § 3-1309(1)(a), the plaintiff must prove that it was in possession of the instrument and entitled to enforce it when the loss of possession occurred (or that it directly or indirectly acquired ownership from a person who was entitled to enforce it when the loss occurred).
• No Voluntary Transfer or Seizure: Under 11 M.R.S. § 3-1309(1)(b), the loss of possession cannot be the result of a transfer by the plaintiff or a lawful seizure.
• Proof of Terms and Adequate Protection: Under 11 M.R.S. § 3-1309(2), the plaintiff must prove the exact terms of the instrument, and the court may not enter judgment unless it finds that the homeowner is adequately protected (such as through an indemnity bond) against loss if another entity later appears with the original note demanding payment.

If the servicer's witness lacks personal knowledge of when or how a prior bank lost the note, the Lost Note Affidavit fails under Maine's strict hearsay rules.

Fraudulent Robo-Signing by Servicers

The national 'robo-signing' scandal actually began in a Maine courtroom. In the litigation leading to Federal National Mortgage Ass'n v. Bradbury, 32 A.3d 1014 (ME Supreme Judicial Court 2011), a deposition taken in a Bridgton, Maine foreclosure revealed that a GMAC Mortgage employee was signing up to 10,000 foreclosure affidavits and mortgage assignments per month under oath without reading the files, verifying the loan figures, or signing in the presence of a notary.

In response, Maine courts strictly enforce M.R. Civ. P. 56(e) and the business records exception to the hearsay rule under M.R. Evid. 803(6). When a current loan servicer submits an affidavit relying on payment histories, endorsements, or assignments created by a prior servicer, the affiant cannot simply recite that they reviewed the computer screen. Under Bank of America, N.A. v. Greenleaf, 96 A.3d 700 (ME Supreme Judicial Court 2014), the witness must demonstrate firsthand knowledge of the prior servicer's record-keeping practices or prove that the records were rigorously verified and integrated during the loan boarding process. Any affidavit or assignment bearing hallmarks of robo-signing, backdating, or unverified hearsay can be stricken from the record.

Improper Endorsements (Allonges)

When a promissory note is transferred from the original lender to another bank, it must be endorsed-either specifically to the new bank or 'in blank' (making it payable to whoever holds it). When there is no room left on the signature page of the note, banks often use a separate sheet of paper called an allonge to hold the endorsement stamps.

Under 11 M.R.S. § 3-1204(1), an allonge is legally valid as an endorsement only if the paper is 'affixed to the instrument.' In Wells Fargo Bank, N.A. v. Burek, 81 A.3d 330 (ME Supreme Judicial Court 2013), the trial court found that Wells Fargo failed to prove it was a 'holder' of the note because the loose allonge stored in the same custodial folder was never physically stapled or affixed to the promissory note as required by 11 M.R.S. § 3-1204(1) (forcing the bank to rely on far more complex nonholder proof at trial). Defense attorneys routinely inspect the original note in court for missing staple holes, contradictory photocopies attached to earlier complaints that lacked the allonge, or undated endorsements signed by defunct companies.

Dismissal Without Prejudice vs. Judgment on the Merits

Understanding how Maine courts dispose of standing defects versus substantive trial defects is vital for any homeowner defending a foreclosure:

Step-by-Step Process to Assert a Standing Defense in Maine

If you are served with foreclosure papers in Portland, Lewiston, Bangor, or anywhere else in Maine, follow these steps to challenge the lender's standing:

Step 1: Audit Your Chain of Title at the Registry of Deeds

Search the land records at your local county office-such as the Cumberland County Registry of Deeds, Portland, the Penobscot County Registry of Deeds, Bangor, or the York County Registry of Deeds, Alfred-to pull copies of your original mortgage and every recorded Assignment of Mortgage. Check whether any assignment in the chain was executed by MERS acting solely as 'nominee' for the original lender.

Step 2: File Your Answer Raising Lack of Standing Within 20 Days

File your written Answer in the court where the complaint was docketed, such as the Cumberland County District Court, Portland, the Androscoggin County District Court, Lewiston, or the Kennebec County Superior Court, Augusta. Explicitly plead Lack of Standing as an affirmative defense and file Form FDP-01, Maine, Judicial Branch, Response to Complaint and Request for Mediation within 20 days of service.

Step 3: Challenge Standing in the Foreclosure Diversion Program

When you attend the informational session and fill out Form FDP-02B, Maine, Judicial Branch, Defendant's Foreclosure Mediation Information, inform the mediator if the plaintiff has a Bank of America, N.A. v. Greenleaf, 96 A.3d 700 (ME Supreme Judicial Court 2014) MERS defect or missing endorsement. Under 14 M.R.S. § 6321-A, the plaintiff must participate in mediation in good faith with authority to modify the loan.

Step 4: Demand Physical Inspection of the Original Wet-Ink Note

Through formal Requests for Production under M.R. Civ. P. 34, demand to inspect the original blue-ink promissory note and any attached allonges at the office of the bank's local counsel or at the courthouse. Compare the physical document against the photocopy attached to the initial complaint to spot newly added endorsements or unattached allonges.

Step 5: Investigate the Signers of Assignments and Affidavits

Look up the names of the individuals who signed the mortgage assignments, allonges, and summary judgment affidavits. If an assignment was signed by a known robo-signer or an employee of a third-party servicer without a recorded Power of Attorney from the original lender, move to exclude the document.

Step 6: File a Motion to Dismiss and Request Attorney's Fees

If the plaintiff cannot prove it owned both the note and the mortgage on the exact day the complaint was filed, move to dismiss the action for lack of standing and petition the court for reimbursement of your legal fees and costs under 14 M.R.S. § 6101.

How Much Does it Cost in Maine?

Here is what Maine homeowners can expect regarding court and legal expenses when contesting standing:

• Filing an Answer and Motion to Dismiss: $0. Maine courts do not charge a filing fee for defendants answering a foreclosure complaint, requesting mediation via Form FDP-01, Maine, Judicial Branch, Response to Complaint and Request for Mediation, or filing a Motion to Dismiss.
• Registry of Deeds Document Copies: Downloading or obtaining certified copies of mortgage assignments at county registries typically costs $1 to $2 per page.
• Deposition and Subpoena Costs: Purchasing a witness subpoena from the clerk's office costs $5, plus sheriff service fees of $25 to $50 and court reporter transcript fees if you depose a bank affiant. Indigent defendants can request fee waivers using Form CV-067, Maine, Judicial Branch, Application to Proceed Without Payment of Fees.
• Foreclosure Defense Lawyer Rates: Experienced Maine litigation attorneys generally charge $250 to $400 per hour or flat fees between $3,000 and $6,500. When a case is dismissed due to a Bank of America, N.A. v. Greenleaf, 96 A.3d 700 (ME Supreme Judicial Court 2014) standing defect, courts frequently order the bank to pay the homeowner's attorney fees under 14 M.R.S. § 6101.

How Long Does the Process Take?

Challenging standing and note ownership significantly extends the foreclosure timeline in Maine:

• Initial Pleading Window: 20 days after service of the complaint to file your Answer and mediation request.
• Foreclosure Mediation Phase: Typically spans 90 to 180 days across one or more mediation sessions.
• Discovery and Standing Motions: Inspecting the original note, briefing a Motion to Dismiss, or contesting summary judgment takes 4 to 9 months in Maine District or Superior Court.
• Post-Dismissal Impact: If the case is dismissed without prejudice because of a broken MERS chain of title and the original lender is defunct, it can take the bank years-or prove impossible-to locate a corporate successor or quiet title to fix the defect.

Because spotting an invalid MERS assignment or an unattached allonge requires a trained eye familiar with Maine's Uniform Commercial Code and real estate statutes, consult a local Maine foreclosure defense lawyer in our directory to review your loan documents right away.

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