Foreclosure is a frightening prospect at any time of the year, but when you are threatened with losing your home during the holiday season, it can send a family over the edge, especially when it comes to deciding between buying Christmas presents for your kids or paying the mortgage on time.

Several southern Maine families, who say they are facing foreclosure on their homes, have applied to the Bruce Roberts Toy Fund for assistance with obtaining gifts for their children.

The Bruce Roberts Toy Fund uses donations from readers of The Portland Press Herald/Maine Sunday Telegram to buy gifts for children in need, then distributes the gifts. The fund serves Cumberland, York, Lincoln, Sagadahoc and Knox counties. Gift packs, for children 18 and younger, contain items appropriate to each child’s age and gender.

A Lebanon couple with three children had to drain their savings and 401K fund after the father lost his job in March.

“We are now in the process of losing our home due to foreclosure,” the mother wrote in her application to the Toy Fund. “We are worried about heat and where we will end up living, never mind buying Christmas presents. I lay in bed at night worrying about it. In spite of the stress we are going through, I want them to have the magic of Christmas.”

Unfortunately, thousands of Mainers will find themselves in a similar situation this holiday season.

According to a report published by the state’s Bureau of Consumer Credit Protection, more than 32,000 Maine homeowners received default notices from their mortgage lenders between June and September. Those numbers are expected to continue through the end of 2010.

“The numbers are huge,” said William N. Lund, superintendent of the Bureau of Consumer Credit Protection, who said homeowners have been receiving notices at an unprecedented rate.

Default notices are official notifications to homeowners that they have fallen behind in their mortgage payments.

Consumer advocates say it is crucial that homeowners acknowledge receipt of the notices and try to work out revised payment schedules with the lenders. If they ignore the paperwork, the foreclosure process kicks in — a process that can take as long as one to two years.

“It’s the beginning of the foreclosure process,” warned Linda Conti, an assistant attorney general who heads up the state’s Consumer Protection Division. “Some people ignore the paperwork until someone is knocking at their door. You should not ignore it.”

Conti and Lund urge homeowners who are having difficulty making payments to contact the Maine Foreclosure Prevention Hotline at 1-888-664-2569. A specialist can try to help you work with your lender to modify your mortgage to suit your budget. The service is relatively new, having been established in June 2009.

While the state urges people not to panic, it’s hard not to react when your children want to know if Santa will bring them gifts for Christmas.

“My husband was laid off from his job in January of this year. Our income was cut considerably. We are now struggling to keep our home,” a Gorham mother wrote in her application.

A single mother in South Berwick wrote that her husband left her this year. She now cares for their 13-year-old son.

“My part-time job is not enough to pay my monthly bills, let alone the two mortgages on our house. I have almost used up my savings. I now have $400 left,” the mom wrote. “My house will most likely be foreclosed on in about eight to 10 months.”

“I’ve made some changes to try and save money. My phone will be shut off … along with cable, but it just isn’t enough,” she said.

Conti, from the Attorney General’s Office, recommends that people who can’t afford a lawyer contact Pine Tree Legal Assistance, or call the hotline for help in dealing with banks that are pressuring them.

“I wish we had the power to have all the stories end well, but we do get positive results in a lot of cases,” said Lund from the Bureau of Consumer Credit Protection. “We operate under the theory that a lender doesn’t really want to foreclose on a home.”

Staff Writer Dennis Hoey can be contacted at 791-6365 or at:

dhoey@pressherald.com