GOVERNOR BALDACCI PROMOTES STATE AND FEDERAL PROGRAMS THAT HELP STRUGGLING HOMEOWNERS AVOID FORECLOSURE

AUGUSTA - Although Maine has one of the lowest foreclosure rates in the country, Governor John E. Baldacci is
taking steps to protect wary homebuyers and existing homeowners who may be struggling to pay their mortgage.

Last month, Governor Baldacci signed into law the Maine Homeownership Protective Act, which will be effective on January 1, 2008. The Act is designed to fight excessive fees and abusive lending practices that strip home equity
and put consumers at risk. The Act is also intended to protect consumer rights in court and make predatory lenders more accountable.

"Today more than ever we need to help Maine people know the pitfalls as well as the benefits of homeownership,
and how they can avoid default once they own a home," Governor Baldacci said. "Better informed homebuyers and homeowners will help prevent the American dream of homeownership from becoming the American nightmare."

In addition, last week Governor Baldacci met with Taylor Caswell, regional director of the U.S. Department of
Housing and Urban Development (HUD), to announce a $123,000 housing counseling grant to Maine State Housing Authority (MaineHousing). HUD-approved housing counseling agencies provide an invaluable service by offering
advice on buying a home, renting, defaults, foreclosures, credit issues, and reverse mortgages.

Part of the grant will be used to provide a two-day foreclosure prevention training course in November for 35 non-profit organization workers who counsel people facing foreclosure, noted MaineHousing Director Dale McCormick.

"This excellent course examines every aspect of default and delinquency," McCormick said. "It covers reasons for defaults, ways to maximize income and reduce expenses, loan workout procedures, and legal information about foreclosures. Many people in jeopardy of losing their homes could prevent it if they have a better understanding of their mortgage and how to avoid foreclosure once they became delinquent."

Governor Baldacci and Mr. Caswell also discussed FHA Secure, a new federal program that could help struggling homeowners avoid foreclosure.

FHA Secure is designed for people who have adjustable rate mortgages that are expected to reset to a higher rate, which could cause a hardship for families who are already struggling to pay monthly household expenses. The
program is administered by the Federal Housing Administration, the branch of HUD that insures mortgages against default.

Under the new FHA Secure plan, families with strong credit histories who had been making timely mortgage
payments before their adjustable loans reset to a higher rate�but who are now in default�will qualify for
refinancing.

"FHA Secure is designed for people who are good borrowers but were steered into high-cost loans with teaser
rates," said Caswell. "The program will give eligible families who were in good financial standing before their loans
reset a chance to keep their homes."

Eligible homeowners will be required to meet strict underwriting guidelines and pay a mortgage insurance premium, which offsets the risk to FHA's insurance fund at no cost to the taxpayer.

To qualify for FHASecure, eligible homeowners must meet the following criteria:

1. A history of on-time mortgage payments before the borrower's teaser rates expired and loans reset;
2. Interest rates must have or will reset between June 2005 and December 2009;
3. Three percent cash or equity in the home;
4. A sustained history of employment; and
5. Sufficient income to make the mortgage payment.

Since its inception in 1934, FHA has helped almost 35 million people nationwide become homeowners, making it the largest insurer of mortgages in the world.

For more information about FHASecure and other FHA products, please call (800) CALL-FHA, contact your lender,
or contact a local HUD-certified housing counseling agency.

For more information on information and programs offered by MaineHousing, please visit www.mainehousing.org.

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