Ten years after an explosion of home foreclosures plunged the nation into a sharp economic recession, Maine is still in recovery mode and lagging behind many other states.

A national report that looked at foreclosure activity during the first quarter of 2017 found that in Greater Portland, foreclosures were still up 1,400 percent from the pre-recession average. There were 235 foreclosures in the Portland area in the first quarter, compared with a pre-recession quarterly average of 15, according to the report by Attom Data Solutions, based in Irvine, California.

In contrast, nearly half of the 216 U.S. metropolitan areas examined in the report had first-quarter foreclosure activity that was below pre-recession levels.

Nationwide, the report shows foreclosure filings – defined as default notices, scheduled auctions and bank repossessions – were reported on 234,500 U.S. properties in the first quarter of 2017, down 19 percent from a year earlier to the lowest level since the third quarter of 2006.

“U.S. foreclosure activity on a quarterly basis first dipped below pre-recession averages in the fourth quarter of last year, and this report shows that trend continuing for the second consecutive quarter,” said Daren Blomquist, senior vice president of Attom Data. “The number of local markets dropping below pre-recession levels continues to grow, up from 78 a year ago to 102 in this report.”

But in Maine, it’s a different story. Foreclosure activity statewide remained up nearly 7,500 percent in 2016 compared with 2006, the last full year before the housing crisis began.

There were 3,779 Maine properties in 2016 with at least one foreclosure filing, down 37 percent from Maine’s peak foreclosure year of 2013, when 6,037 properties in the state had at least one foreclosure filing.

In 2006, that number was just 50, according to Attom Data and RealtyTrac.


Maine’s foreclosure activity peaked one to two years after the national average, primarily because of Maine’s lengthy judicial foreclosure process, analysts said.

“There’s such a lag when these properties actually foreclose,” said Dean Gilbert, branch manager of Mortgage Network Inc. in Freeport. “It’s taking an average of two years.”

Gilbert said that in many other states, “they can basically rubber-stamp them” after a lender files to foreclose on a property.

A more expedited foreclosure process isn’t necessarily better. Thousands of lawsuits have sprung up over the past decade in states with so-called “fast-track foreclosure” laws, with ousted homeowners alleging that their homes were taken away by lenders improperly or illegally.

Still, a negative consequence of Maine’s more deliberate process is that it can leave distressed homeowners in limbo for years before the foreclosure is completed or averted.

A second problem in Maine is that its peak rate of foreclosures was much higher than the national average. Maine peaked at a rate of about 1.7 percent of all mortgaged properties, compared with the national average of about 0.8 percent, Gilbert said.

A report issued in March by financial analytics firm CoreLogic Inc., based in Irvine, California, found that Maine’s peak foreclosure rate was the seventh-highest in the nation, exceeded only by Florida, Nevada, New Jersey, Illinois, New York and Connecticut.

Contributing factors in Maine included a relatively weak economy, plant closures and mass layoffs, the analysts said. The paper industry alone has lost thousands of jobs as five mills closed in the past three years.

Those risk factors still exist today and are leading to new foreclosures, Gilbert said.

“There’s always going to be a fair number of them because of job losses,” he said.


In 2016, the highest county foreclosure rates in Maine by far were in Androscoggin and Penobscot, according to Attom Data. Androscoggin County led with a foreclosure rate of 0.85 percent of all housing units, followed by Penobscot County’s rate of 0.83 percent. There were 613 foreclosure filings in Penobscot County in 2016, compared with 552 filings in Cumberland County, despite Cumberland County having nearly twice as many homes.

The state’s lowest county foreclosure rate by far was in Lincoln County, where it was only 0.2 percent of all housing units in 2016. Statewide, the foreclosure rate in 2016 was 0.52 percent, according to Attom Data.

Overall, foreclosures in Maine are trending downward, and Gilbert said there are reasons to be optimistic about the future.

A report issued in February by the state Bureau of Financial Institutions found that foreclosures initiated by state-chartered banks declined for the fifth consecutive year in 2016.

While the study is limited to the 31 community banks chartered in Maine, it shows that the default rate on mortgage loans originated by those institutions has basically returned to normal.

“Foreclosure activity at Maine’s state-chartered institutions has steadily declined over the past five years and has reached pre-recessionary levels,” bureau Superintendent Lloyd LaFountain said in the report.

The state’s housing market continues to improve, with home sales and median prices steadily increasing month by month over the past few years. Meanwhile, thousands of Mainers affected by foreclosure are rebuilding their credit, and many already have successfully returned to home ownership, Gilbert said.

“I do think that we’re coming out of this,” he said.

J. Craig Anderson can be contacted at 791-6390 or at:

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