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During 2007, the steepest decline in home ownership, led partly by the steepest rise in foreclosures since the Great Depression, had a chilling effect on the national economy. Nationally, foreclosures were up 75%, the number of owner-occupied homes dropped 1.1% in a single year, and the drop in the sale price of homes is the largest since records began to be kept in the mid-sixties, a loss of over 7%.
Since most Americans keep the majority of their personal wealth in their homes, these losses represent more than mere paper. Of course, for the record number who lost their homes last year, the hit has been catastrophic. But beyond the nearly half million families in the country who lost a home, many more of us will lose some portion of our net worth, because our homes are simply not worth what they were when we bought them.
Maine has been better than most states at keeping families in their homes. Last year, there were only 286 foreclosures in Maine.
Of course, for those 286 families, it might as well be the end of the world. But it could have been worse - in California, 250,000 families lost their homes, and in Nevada, there were almost four foreclosure filings for every 100 households - the highest rate of foreclosures in the nation.
Maine has clearly been doing something right, but we can’t rely on luck in the lean times to come. It is time, now, to establish astate policy to help keep families in their homes, by helping to convert high-interest mortgages to lower ones. We must provide incentives for local, Maine banks to help Mainers avoid foreclosure, and for new homebuyers to invest in a Maine home. In the long run, this will help all homeowners in Maine, by keeping housing prices buoyant, and keeping property values higher than they would be if we suddenly have hundreds of boarded-up buildings in our neighborhoods.
We call on Governor Baldacci and the State Legislature to start the process now, so that the plague that is ravaging California, Michigan, Nevada, and Colorado will never visit Maine.
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