Home Foreclosures and Delinquent Loans Continue to Increase Modestly at Maine Banks and Credit Unions


Mortgage Loan Originations, However, Also Increase in 2009 and Outpace 2008

AUGUSTA, MAINE – Bureau of Financial Institutions Superintendent Lloyd P. LaFountain, III announced this week that fourth quarter 2009 data submitted by Maine-chartered banks and credit unions shows a continuing increase in home foreclosures in Maine.  In general, foreclosure activity at Maine banks and credit unions appears to be lower than in many other states and it does not pose a threat to the stability of Maine-chartered financial institutions.

At the same time, the number of new first mortgage loans initiated during 2009 increased substantially—up 56% compared with 2008.

“The increase in new first mortgage loans during 2009 is encouraging and welcomed news,” Superintendent LaFountain commented.  “At the same time, we continue to see a modest increase in foreclosure activity, which indicates that too many individuals and families continue to struggle during a challenging economic time.”

This most recent data covers October through December 2009.  It pertains to residential real estate lending and was obtained from the 32 financial institutions (banks and credit unions) that have been state-chartered in Maine from the end of 2006 through December 2009.  The Bureau has been surveying state-chartered banks and credit unions regarding foreclosure activity since October 2006.

According to fourth quarter 2009 survey results, the 32 state-chartered financial institutions held 85,328 mortgage loans at the end of December, consisting of 48,677 first mortgage loans and 36,651 junior lien mortgage loans (including home equity lines of credit).  Of the 85,328 loans, 305 (226 first mortgages and 79 junior lien mortgages) were in process of foreclosure (IPF), or one loan for every 280 mortgages (one for every 215 first mortgages).  This continues the ongoing upward trend since 2006.  At the end of the third quarter of last year, 271 loans were in IPF status.  As a percentage of total mortgages, though, IPF loans remain relatively low, 0.36% at the end of the fourth quarter (up from 0.32% at the end of the third quarter of 2009).


Page 2,  Home Foreclosure Data from Maine Banks and Credit Unions

IPF 12/06 12/07 12/08 3/09 6/09 9/09 12/09 # Loans
1st REM 62 120 148 177 185 200 226 48,677
Jr REM 20 35 65 63 75 71 79 36,651
All REM 82 155 213 240 260 271 305 85,328
1st REM 0.15% 0.26% 0.30% 0.36% 0.38% 0.41% 0.46%
Jr REM 0.08% 0.12% 0.17% 0.17% 0.20% 0.19% 0.22%
All REM 0.12% 0.20% 0.24% 0.28% 0.30% 0.32% 0.36%

REM = Residential Mortgage

The Bureau also requests data on completed foreclosures (FC).  The table below shows numbers increasing from 52 in 2006 to 67 in 2007.  In 2008, that number jumped to 159 and increased further in 2009, to 175.  Completed foreclosures in the fourth quarter of 2009 totaled 42 mortgages, 0.049% of outstanding mortgages.  This represents a substantial decrease from the third quarter, and the overall number of FC remains low, especially in relation to total outstanding mortgages – only one for every 2,030 mortgages and one for every 1,312 first mortgages.

FC 2006

*

2007 ** 12/08 2008

**

3/09 6/09 9/09 12/09 2009

**

1st REM 50 52 26 119 21 35 33 37 126
Jr REM 2 15 11 40 17 5 22 5 49
All REM 52 67 37 159 38 40 55 42 175
% of Prior Quarter-end Loans
1st REM 0.12% 0.12% 0.053% 0.24% 0.042% 0.071% 0.068% 0.076% 0.26%
Jr REM 0.01% 0.05% 0.029% 0.11% 0.045% 0.013% 0.059% 0.014% 0.13%
All REM 0.07% 0.09% 0.043% 0.19% 0.044% 0.046% 0.064% 0.049% 0.20%

*     Annual percentage is based on number of loans outstanding at 12/31/06;

**    Annual percentage is based on average number of loans outstanding in the year.

Beginning in 2008, data on the number of foreclosures initiated in the current quarter was requested.  During the fourth quarter of 2009, foreclosure proceedings were started on 103 first mortgages, 0.21% of all outstanding first mortgages, or one for every 473 first mortgages.  This represents a noticeable increase from the prior quarter.  However, foreclosure proceedings initiated on junior mortgages decreased for the second consecutive quarter.

Foreclosures Initiated 3/08 6/08 9/08 12/08 3/09 6/09 9/09 12/09
# 1st REM 45 35 62 59 65 61 76 103
% 1st REM 0.09% 0.07% 0.13% 0.12% 0.13% 0.13% 0.16% 0.21%
FC Start/1st REM 1,060 1,362 794 839 756 800 639 473
# Jr. REM 26 14 26 20 16 27 22 20
% Jr. REM 0.07% 0.04% 0.07% 0.05% 0.04% 0.07% 0.06% 0.05%
FC Start/Jr REM 1,424 2,709 1,449 1,877 2,319 1,371 1,669 1,833

MORE

Page 3,  Home Foreclosure Data from Maine Banks and Credit Unions

The survey does not include data from entities not regulated by the Bureau which include federally-chartered banks, federally-chartered credit unions and mortgage companies licensed to do business in Maine.

More information on the status of residential real estate lending by Maine’s financial institutions is available in the Bureau’s 2010 Annual Report to the Legislature, which can be found at www.maine.gov/pfr/financialinstitutions.

The Bureau of Financial Institutions is part of the Department of Professional and Financial Regulation, which encourages sound ethical business practices through impartial regulation of insurers, financial institutions, creditors, investment providers, and numerous professions and occupations for the purpose of protecting the citizens of Maine.  Consumers can reach the Bureau through the Department’s website (www.maine.gov/pfr); by calling 1-800-965-5235 or by writing to Bureau of Financial Institutions, 36 State House Station, Augusta, Maine 04333.

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