Maine home foreclosure rates are still historically high, according to William Lund, the director of the Maine Bureau of Consumer Credit Protection.

"The rates of past due mortgages right now is 7.84 percent," said Lund. "Last year at his time it was 8.21 percent. That may seem like improvement, but it is 400 percent higher than the average rate during the years 2002 through 2006."

In real numbers, Lund said there were 5,700 foreclosure filings in Maine in 2010. He expects 2011 to be the same or higher as lenders who have held off on foreclosures in 2011 move ahead to unload.

In an attempt to lower the foreclosure rate, federal home loan modifications were introduced in 2009, but they were plagued with problems. Lost paperwork by lenders, loan servicers and their subcontractors, bad advice, long delays and overall poor management and coordination resulted in far fewer loan modifications going through than the government had anticipated.

Overall, the federal program has helped not quite a million people keep their homes.

HARP: Home Affordable Refinance Program

In an effort to double that number, the federal government announced HARP, a renewed effort to help homeowners refinance even after they have been turned down by banks.

HARP, which was announced October 24, is the federal Home Affordable Refinance Program. It is the only refinance program that allows borrowers who owe more than their home is worth to take advantage of low interest rates to refinance. To qualify, homeowners cannot have more than 20 percent equity in their home, must be current on their mortgage payments with no late payments in the past six months and no more than one late payment in the past 12 months.

In an attempt to reach more homeowners who need to refinance but are unable to through traditional lenders, the HARP?program has eliminated some loan fees and will waive appraisals if a recent one is on file. The program will be extended for another two years, until December 13, 2013. To qualify for HARP, the orignal mortgage loan on a home had to be a Freddie Mac or Fannie Mae loan made before May 31, 2009. Homeowners who were previously not eligible to modify their mortgage under the federal program because they owed much more than the market value of their home may now be able to qualify.

Homeowners can determine if their mortgage was sold to Fannie or Freddie by going to www.FannieMae.com/loanlookup or calling 888-7FANNIE or www.FreddieMac.com/corporate or 800-FREDDIE.

Banks and other lenders must voluntarily choose to offer the HARP program. Homeowners can contact their lender to see if they offer HARP.

MaineStream Finance

It's not a sure-fire fix for everyone whose bills are piling up, but MaineStream Finance (MSF) is able to help some homeowners with high interest rates refinance their homes at a lower rate, even after they have been turned down by other lenders.

MSF is a non-profit Community Development Financial Institution that provides credit support and training programs for Maine residents with low or low-moderate income. MSF is affiliated with Penquis and primarily operates in Knox, Waldo, Penobscot and Piscatiquis counties, but is able to finance mortgages for primary homes in Lincoln County, too.

MSF does not guarantee applicants will get a loan or be able to refinance. The application process is similar to that of applying for a bank loan. Applicants must provide tax returns, proof of income, and bank account information. MSF runs a credit check and matches it to the application to verify the information.

"It's very similar to the bank process," said Jayne Crosby Giles, the chief executive officer of MSF. What is different is that the decision to lend or not to lend is decided by a volunteer committee made up of bankers. They look at other factors that the banks do not. Applicants have to demonstrate financial responsibility, but there is a little leeway.

Another difference is that MSF teaches homeowners how to budget, then follows up to check if they do as part of the requirement to qualify for an MSF loan.And if homeowners don't qualify for a loan, MSF counsels them in other ways to prevent foreclosure. If foreclosure isn't avoidable, MSF counsels them through that, too.

Take an example: an employed homeowner is managing her finances okay until she has a health problem not covered by her insurance plan. She ignores the bills while trying to figure out how to pay them. Then her 10-year-old car breaks down. She puts those repairs on her credit card. Then the furnace goes on the fritz and she pays to fix that, but now she is late on her mortgage payment, twice. Her mortgage, at 8 percent, is much higher than what the banks are now offering, but by now her credit score is damaged to the point that she's turned down when she goes in to refinance.

This is where MSF could help. "We will work with homeowners who have been turned down by lenders because of a drop in credit score and delinquency," said Giles.

Sometimes that help comes in the form of financial counseling to help a homeowner understand that foreclosure or a quick sale is their only option. Sometimes it is the help they need to apply for and be approved for an MSF?loan.

Currently, MSF finances up to $150,000 on a 30-year mortgage at a rate of six percent.

That is not the four-to-five percent mortgage rates seen at area banks.

"We don't compete with banks,"said Giles. "Our rates are higher because there is more risk involved because we are working with people who have already been turned down for a regular bank loan."

For more information on MaineStream Finance home and small business loans, call 800-215-4942.