Maine foreclosures rise slightly in first quarter
economy

Maine foreclosures rise slightly in first quarter


By Judy Harrison
BDN Staff

AUGUSTA, Maine — Data from Maine-chartered banks and credit unions released Thursday showed a modest increase in home foreclosures during the first quarter.

The information was made public the day after Maine lawmakers approved a bill designed to help homeowners avoid foreclosure.

Superintendent Lloyd LaFountain III of the Bureau of Financial Institutions said Thursday that the number of initiated foreclosure proceedings on first mortgages rose from January through March. Completed foreclosures, however, were down.

The bureau said 240 of 86,279 loans outstanding at the end of March, or 0.28 percent, were in foreclosure. LaFountain said the level of foreclosures poses no threat to the strength and solvency of Maine-chartered banks and credit unions.

LaFountain said the decline in completed foreclosures was a positive development and may reflect loan modification efforts and use of homeowner assistance programs.

More assistance will be available if LD 1418, passed Wednesday night, is signed into law, according to its sponsor, Rep, Sharon Treat, D-Hallowell.

Modeled after a law in Connecticut, it sets up a mediation program to help people avoid losing their homes.

Treat said LD 1418 would provide additional counseling for homeowners facing foreclosure and make it easier and faster for them to navigate through the court system.

The program is expected to cost about $900,000 a year over the next four years, according to the fiscal note on the bill, and was modeled on a successful program in Connecticut, she said.

The Maine program would be funded by court-filing fees paid primarily by lending institutions and the addition of a real-estate-transfer tax on homes bought at foreclosure auctions.

In addition to setting up a foreclosure help hot line, the bill would let homeowners facing foreclosure ask to take part in a mediation process. The bill also would allow retired judges on active status to act as mediators.

Many of the bill’s details were hammered out by the Commission on Foreclosure Diversion, which was made up of lawmakers, bankers, attorneys and members of the judiciary.

The commission’s 71-page report was released shortly after the bill passed in the House and Senate. Its recommendations include allowing homeowners to request mediation rather than respond to a summary judgment motion. It also recommends requiring that a person authorized to reach a settlement represent lending institutions during mediation sessions.

The new procedure is expected to cut in half the length of time it takes to complete the foreclosure. The report said that uncontested foreclosures take nine months to complete, and contested foreclosures often take more than a year.

Because Treat’s bill was passed as an emergency measure it would go into effect on July 1. The program first would be launched in a pilot project in southern Maine where foreclosure filings per capita are highest. It is expected to be implemented statewide by Jan. 1, 2010.

It was a bit of a coincidence that the Legislature and the commission were looking at the same issue at the same time, said District Court Judge David Kennedy, a commission member.

LD 1418 and the commission’s recommendations won’t solve all the problems of homeowners facing foreclosure but it will make the legal process easier to navigate, he said.

“One of the things in the commission’s report that struck me as particularly accurate was the observation that what we have now is a lose-lose-lose situation,” Kennedy said.

“The holder of the mortgage doesn’t ever recover what it’s owed. The homeowner doesn’t get out of the home what he or she’s put into it, and there are negative collateral damages for society that include lost property tax income, reduced property value and often the need for the former homeowner to seek public assistance. Everybody loses.”

The Associated Press contributed to this report.

jharrison@bangordailynews.net

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Comments
6 comments on this item

Is the public aware that local banks like for example; Bangor Savings Banks assets are over 2 billion. This is what the CEO told me personally at a meeting with a government official a few months ago. I went there to advocate for 22 homeowners... working poor homeowners. Some are ok with income now and have found new jobs but it is too late to save their home. They either lost their jobs or had a decrease Like one who worked at Wal-Mart and got laid off because his salary went down. Or a railroad worker who gets work so seldom that the family doesnt know what to do. Or the family who has a sick child with cancer. Or the gentlemen who lost his leg. Or the lady who is on treatments for Lymes disease. MOst just cant find jobs for the money they were making. I went to this CEO of Bangor Savings bank and was shot down. I have names of people who got thousands of money written off in interest but not my folks. I guess they didnt spell their names right. I only asked for a few months to get back on my feet along with others. I was told they didnt need to help these people as they were too high risk. I am these people. I do know of a local realtor who gets the names of the forclosure people from a certain bank official and they get their buddy to buy these homes up and put all their money together with these bank officials and split what they make on these MAINE working people from their home sales. This is public record and sometimes it takes a while to get the information to the Register of deeds, do a follow up. It is next to the district court. SHAME OF THEM for taking advantage of the working poor who made these banks who they are today. How do they think they have this much assets? From the working Maine people.......I was told they didnt need people like Me. In my opinion I was treated unfairly because I have stuck up for the Maine people. If you are a person who has been treated unfairly let me know. I also am going to do something about this and would like to help any forclosure people from the past or the future. Their are 22 of us and growing. So please know my heart goes out to you The government is givng tax write offs of eight thousand dollars to new homeowners which is good for them. but what about the ones who have paid for many years. You see for yourself who gets rich off these Maine homeowners with families. . Deborah Deane

Well said Ms. Deane.

You know there used to be a day in this country when you had multiple generations of families who all lived in the same house, that was the way it had to be so that people could afford to get by. For some reason Americans as a whole feel that they have this ENTITLEMENT to own their own homes and live there with just Mom, Dad, and the kids. If Grandma has to move in for any number of reasons for many families its like the world is coming to an end. Maybe we should shift back to a lifestyle where families take care of eachother and help out their neighbors and get away from this "the world revolves around me mentality"

My point I guess is while I understand there are people who are facing forclosure that maybe were living within their means and then experienced a crisis that put them way behind, the truth is the majority of people today have spread their budget so thin that they are often living paycheck to paycheck so that they can have this enormous house, new cars, snowmobiles, etc. Yet they are not putting any money into their savings account and preparing for the worst. If you cant afford to pay your bills and still put a good chunk of change into savings every paycheck then maybe you need to re-evaluate your lifestyle.

GixxerRider, great commentary.

GikxxerRider, well said! I was truly hoping, and still am, that this global economic fiasco would get the attention of many; however, it appears that too many of the "many" still have their hand out wanting more -- and our politicians keep on handing out the funny money. I guess it boils down to the key word, "ENTITLEMENT"! I love this new American way -- one doesn't have to work and save for anything anymore -- credit cards, loans, and 100% financing. I well remember those days when many households consisted of grammy and grampy, one or more of their children, and perhaps a parcel of grandchildren. I'm not saying let's go back, however, let's pause and see if we can recall and put into practice some of those values of years gone by; the ethics, caring, and love that made this country prosperous and great. I don't know about you, but I don't want Uncle Sam in my house or bed; and I don't want him to give me anything that I didn't work and pay for, because I know in time he'll come knocking on my door with his hand out!

This whole stimulus package is just part of the governments long term plan to take away the power of the people. Are we going to do something about it or be lazy and think someone else is going to do it for us? It is time for a revolution. We need to overthrow the government and take our power back. Before there is nothing we can do about it.. you should check http://obamamortgage2009.blogspot.com/2009/03/obamas-mortgage-modification-do-you.html#comments

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