Maine’s Foreclosures and Newly Delinquent Mortgage Loans Decline

State-chartered banks and credit unions in Maine saw an overall decrease in home foreclosure activity during the third quarter of 2010, according to data released this week by the state’s ""Bureau of Financial Institutions"":http://www.maine.gov/pfr/financialinstitutions/.
[IMAGE] Both new delinquencies and foreclosure starts dropped, which could mean future foreclosures are also on the wane. However, seriously delinquent first mortgages increased during the same period.

Foreclosure activity at Maine banks and credit unions is among the lowest in the country and does not pose a threat to the stability of Maine-chartered financial institutions, the Bureau said.

According to third quarter survey results, state-chartered financial institutions held 83,008 mortgage loans at the end of September, consisting of 47,774 first mortgage loans and 35,234 junior lien mortgage loans.

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Of the 83,008 loans, 265 (216 first mortgages and 49 junior lien mortgages) were in the process of foreclosure, or one loan for every 313 mortgages. At the end of the second quarter of 2010, 297 loans were in foreclosure.

During the third quarter of 2010, foreclosure proceedings were started on 52 first mortgages, 0.11 percent of all outstanding first mortgages, or one for every 919 first mortgages. The Bureau says this represents the third consecutive quarter of noticeable decrease from the prior three-month period and the lowest level since June 2008. Foreclosure proceedings initiated on junior mortgages also continued on a downward trend.

The Bureau also reported that the number of new first mortgage loans initiated in Maine during the third quarter increased by 24 percent from the prior quarter. For the first time in 2010, originations during Q3 exceeded those for the same period in 2009.

The Bureau attributes the growth in originations to record low interest rates and the expiration of the federal housing tax credit, which led to higher home sales by requiring a mortgage closing by September 30, 2010.

The data included in the Q3 survey was obtained from the 32 financial institutions (banks and credit unions) that were state chartered in Maine from the end of 2006 to September 2010. It does not include data from entities not regulated by the Bureau, including federally chartered banks, federally chartered credit unions, and mortgage companies licensed to do business in Maine.