BY TREVOR MAXWELL

Portland Press Herald

When Maine National Bank collapsed during the recession of the early 1990s, Tom Cox's job was to collect money from businesses that had borrowed from the failed bank.

The lawyer from Portland had to tell business owners that federal regulators wanted those loans repaid immediately. No extensions, no excuses.

"That was very unpleasant," Cox said during an interview last week at a coffee shop on Exchange Street. "These were good Maine businesses for the most part. There were a lot of good borrowers that got caught up in that mess."

Nearly two decades later, as Mainers face a new economic crisis, the 64-year-old retired lawyer has emerged on the flip side of debt collection.

Cox volunteers several hours each week in a program called Maine Attorneys Saving Homes. It was developed over the past year within the Volunteer Lawyers Project, a division of Pine Tree Legal Assistance.

The program provides free legal help to individuals and families on the brink of foreclosure.

Sometimes that can mean a lawyer getting on the phone and negotiating a new payment schedule with a lender. Other times it means contesting a foreclosure case in court because the homeowner was the victim of predatory lending.

"I was reading a lot in the papers about what was going on with the foreclosure crisis," said Cox, who retired in 2000. "I got to the point where I wanted to use what little ability I had to contribute in a much more constructive way."

This past spring, just as the Maine Attorneys Saving Homes program was getting started, Cox made a telephone call and offered to help.

"It felt like a gift from heaven," said Juliet Holmes-Smith, director of the Volunteer Lawyers Project.

Holmes-Smith had about 20 lawyers who had taken preliminary training on foreclosure and were ready to take some cases. But the program didn't have anyone with the expertise of Cox. And it didn't have a volunteer willing to come into the office, analyze the case files and farm them out to the lawyers across the state. Cox stepped easily into that role.

So far, Cox has referred more than 20 cases to the volunteer lawyers. Some could be resolved relatively quickly with the cooperation of lenders, while others could end up in court for years.

"I question whether we would have been able to get very many cases out at all without him," Holmes-Smith said.

Chet Randall, a lawyer with Pine Tree Legal Assistance, worked with Holmes-Smith to develop the Maine Attorneys Saving Homes program. Randall and two other lawyers accept some foreclosure cases through Pine Tree, but they needed help from the private bar in Maine.

"We have three attorneys, one full-time paralegal and a part-time paralegal, and we are swamped," Randall said.

Although Maine has a lower foreclosure rate than the national average, the numbers here continue to rise. At present there are around 1,850 properties in foreclosure in Maine, according to RealtyTrac, a California-based company that follows foreclosure activity. In October, Maine had one property in foreclosure for every 1,974 properties statewide. That's up from one for every 4,700 properties in the summer of 2007.

Every Wednesday, Cox goes in to the Volunteer Lawyers Project office on Federal Street. He picks up any new files and finds an unoccupied desk and phone. Then he starts going through the file, to identify the issues and prepare a case summary.

"We don't take every case," Cox said. "If there is merit, then by all means the borrower should be well-represented."

Most of the cases Cox has reviewed involve a job loss, a sickness in the family or a divorce. Those are life circumstances that dramatically change a family's ability to pay a mortgage, Cox said. Some are examples of loans that never should have been made.

In one case, a 64-year-old man inherited the home where he had lived all his life with his parents. The man initially took out a loan on the property to help pay for his mother's nursing home expenses and other bills. He then refinanced twice with adjustable rate mortgages, spending huge closing fees along the way.

"He couldn't afford even the first mortgage," Cox said. "He got way over his head."

Cox saw the loans were made through Bryco Funding, a California-based company that went into bankruptcy earlier this year. Cox also noticed that the man's income was apparently misstated on several loan documents, making it seem that he had more money to pay the loans. It looked to Cox like a clear case of predatory lending.

"Now his house is going to be foreclosed, and we're trying to help," Cox said.

At Molleur Law Offices in Biddeford, James Molleur and Andrea Stark have volunteered to take several cases through the program. The lawyers attended in-depth training sessions on foreclosure law earlier this year.

"They gave us the background so we could be aggressive advocates on behalf of homeowners," Molleur said. "It has been very helpful. It provided an educational base for attorneys who hadn't done a lot of this work before. The hope is to provide clients with a solution, which isn't just buying time."

Cox said the best outcome for the overall economy, the banks and homeowners is to keep people in their homes and working toward repayment.

"I come to it from a mixed viewpoint," he said. "Most of the borrowers, I think, knew they were getting in deeper than they should have. And most of the lenders were pushing these impossible loans."

Holmes-Smith and Randall expect foreclosure proceedings to rise in Maine at least for the next three years. They hope to offer another round of training for lawyers in January.

Cox said the heroes of the Maine Attorneys Saving Homes program are the lawyers who take the cases.

"I give a lot of credit to these lawyers for being willing to do this," Cox said. "These are hard cases. They are complicated and the lawyers are willing to commit themselves to doing good work on them."