PORTLAND (AP) – Sanford is only the eighth largest community in Maine, but in terms of home foreclosures, it ranks No. 1.

The state Office of Community Development says Sanford saw 65 foreclosures between September 2007 and November 2008. That compares to 44 in Lewiston, Maine’s second-largest city, and 28 in Portland, the largest.

Mike Baran of the Office of Community Development says the state is receiving $19.6 million in federal assistance that will be used to acquire and redevelop foreclosed properties that might otherwise be abandoned or become sources of blight.

With the federal money, communities will work with nonprofit housing organizations in their areas, which will buy and fix up homes and be reimbursed by the municipality. The first sales from the Neighborhood Stabilization program are expected to take place in March.

Five of the 15 municipalities to get aid are located in York County. Chris LaRoche, who oversees housing issues for the nonprofit York County Community Action Corp., said people flocked to those communities in recent years because homes were more affordable than in the more affluent coastal towns and money was available through aggressive mortgage lenders.

“People who are buying homes in many cases are first-time buyers and purchase mortgage products that may not have been right for them, or maybe they had issues with their credit, and so they chose products that may be more expensive to them because they didn’t do the work themselves to get a better credit rating, to get a better credit score,” he said.

Maine is not seeing the type of home abandonment that has shuttered entire neighborhood blocks in states such as Nevada and Florida. But the situation in Maine is as bad as the state has ever experienced and is expected to get worse, said Catherine Kessler of the title and closing company Market Street Settlement Group.

That’s not good for home sellers in Sanford, where real estate agents say foreclosed properties have dragged down home prices. But Kessler says it is good news for buyers.

“It’s not just the lower-priced properties that are in these foreclosures,” said Kessler. “If you look at the list you’ll notice quite a wide spread, because across every economic circumstance, people are having hardship.”

Real estate agent Teri Woods says she’s not surprised at the high foreclosure rate in Sanford. Woods cited its rural character, high unemployment, low incomes and high taxes.

But it can be hard to sell foreclosed homes that are in bad shape, she said as she gave a tour of a gambrel-style house off a rural road that was abandoned months ago by a young family and has since been repossessed by bank.

The house needs new flooring and new interior paint, and both bathrooms need to be redone.

“The property was listed on Nov. 10th at $117,900 and we’ve had approximately 16 showings,” she said. “They reduced the price to $109,155 and that produced more showings but we still don’t have any offers, so we’ll probably be looking for another price reduction.”

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Information from: WMEA-FM, http://www.mpbn.net/index.html

AP-ES-01-08-09 1141EST

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