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.