Friday, September 08, 2006

Foreclosures Up In Maine

From WCSH in Portland, Maine. "Times are so tight for many Mainers. They are losing the money battle and their homes with it. Len Morley, an attorney who specializes in foreclosures, says cases are up 400% from this time last year. 'What I'm seeing mostly are relatively young loans,' says Morley. 'Loans that were closed in the past couple years. Either refinance transitions or acquisition transactions but loans that were closed in 2003, 4 or 5 are the ones going into default.'"

"Morley cites a variety of factors for the sharp increase: people overextending in the last few go-go years of the real estate market, rising fuel costs, medical bills and general inflation at a time when most people's income is steady or falling. Another big culprit: Adjustable Rate Mortgages, or ARMs. 'If you're living with not much of a margin, then a couple hundred here a couple hundred dollars there a month is a lot of money,' Morley says."

"Leah Pyy of Bath knows the harsh new reality all too well. She and her husband saved 15 years before they were able to buy their home in Bath in 1995. They almost lost it in the space of 6 months. In 1997, they refinanced with heavy fees, adding thousands to their mortgage. Then, in 2003 Leah lost her job. She soon wracked up $31,000 in credit card bills."

"So in 2004, the family took out a second mortgage on their home, at 13.9% interest. 6 months later, Leah says, 'Got a foreclosure notice. We owed them like 4,000 dollars.' The Pyy's avoided having their house taken by mere hours, thanks to a long awaited disability check and some intervention by the office of Senator Olympia Snowe."

"Morley warns people to beware of overextending their finances in this market. Pyy wholeheartedly aggrees. 'It flipped my thinking around..that this isn't gonna happen again. No more credit cards. I refuse to refinance.'"


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