The number of foreclosure filings in Maine dropped in the first six months of this year compared with the same time last year, countering a national trend for the biggest drop among all states, a report released Thursday found.
Mainers filed 22 percent fewer foreclosure applications, or about 555 filings, so far this year compared with the first six months in 2022, according to the report by real estate data firm ATTOM.
That continues the drop in applications seen in the first quarter of this year in Maine. Foreclosure applications were up 13 percent nationally, and are expected to keep rising, according to ATTOM. A program administered by MaineHousing helped keep the numbers low, financiers here said.
The Homeowner Assistance Fund was established by the 2021 American Rescue Plan Act to help homeowners experiencing financial hardship after Jan. 21, 2020.
Maine received $50 million to assist homeowners struggling with their mortgage payments or other housing costs due to the COVID-19 pandemic. Qualifying homeowners can get up to $50,000 to use for expenses of past-due bills including mortgage payments.
“I think Maine can attribute the decrease in the first six months to the homeowner’s assistance program,” said Renee Smyth, a spokesperson for Camden National Bank, which continues to have record-low foreclosures.
Since May 2022, the program has disbursed or approved a total of $16.34 million to help homeowners having trouble paying mortgages, according to MaineHousing. About $8.68 million of that was to help people catch up on their mortgages, $3.2 million for utility assistance and another $1.25 million for property tax assistance.
Those in counties with higher-priced homes tended to ask for more assistance more, MaineHousing spokesperson Scott Thistle said. Some 978 applications since May 2022 were from Cumberland, 932 from York and 734 from Penobscot counties.
Recent homeowner equity gains driven by a hot housing market and strong employment numbers probably have a lot to do with the latest foreclosure-case rate dropping in Maine more than any other state, Rob Barber, CEO of ATTOM, said.
Only 2.5 percent, or one in 40 mortgage-paying Maine homeowners, were seriously underwater on loans in the first quarter of 2023, owing at least 25 percent more than their properties were estimated to be worth, he said. That was down from 3.1 percent, or one in 32, during the first quarter of 2022.
During the same time period, the portion of homeowners here with mortgages who were considered equity-rich, or owing less than half the estimated value of their homes, rose from 48.5 percent to 55.5 percent. That was the 9th best improvement among the 50 states.
“With fewer homeowners in dire straits and more sitting pretty with their mortgages — and the employment picture so bright — it makes sense that the foreclosure cases would decline,” Barber said.
It also is important to consider the impact the pandemic had on halting foreclosures and creating a backlog for Maine’s court system, which is now catching up, Jen Burke, spokesperson for the Maine Credit Union League, said.
The federal government imposed a foreclosure moratorium at the end of 2020 through mid 2021 to provide relief during the height of the pandemic, when people lost jobs and companies closed.
Maine has low unemployment and the state’s tight housing market and rising home values have created an environment where would-be foreclosed homeowners can sell their troubled asset prior to being foreclosed on, Burke said.
“That was not the case when the housing market crashed in 2008,” she said.