Maine has a higher-than-average percentage of residents who own their homes. While owning a home is a source of both security and pride, it's not necessarily a help when you need cash -- and many of Maine's homeowners are often cash-poor.

That situation has been an open invitation to unscrupulous mortgage lenders who prey on those who have equity in a home but also have poor credit and a need for cash. They're called predatory lenders and in the last few years, their practices in providing refinancing and other mortgages at higher-than-prime rates have led to a dramatic rise in mortgage defaults. Maine now bears the unfortunate distinction of having the highest rate of home foreclosures in New England.

Predatory lenders lure those hungry for cash with promises of low rates and low payments. Such enticements are especially attractive to the usual targets of predatory lenders: those with poor credit.

What's happening in Maine mirrors a trend of increasing predatory lending across the nation. The lending takes a variety of forms, from payday and rent-a-center loans to subprime mortgages. The latter are mortgages which cost more to compensate for the higher risk being taken by the lender. Studies have found that predatory subprime mortgage lending has grown rapidly in the United States; subprime mortgages added up to $90 billion in 1996 but by 2004, that amount had increased to $401 billion. And the lending is disproportionately focused in minority and rural communities.

The lenders' promises can conceal hidden costs, such as astronomically high closing fees (sometimes two to three times that of a regular mortgage), exorbitant prepayment penalties and dangerous fine print.

Their mortgages often call for mandatory arbitration in the event of disputes, which bars victims of predatory lending from seeking court action to remedy their problem.

And many of the mortgages have terms that end up stripping the equity out of a home so that when a financial crunch comes, the homeowner loses the home.

Maine House Majority Leader Glenn Cummings has taken an aggressive stance towards the practice in the state and has promised to introduce legislation this session to curb the excesses of predatory lending.

"To build financial security through homeownership," says Cummings, "families have to work hard ... Unfortunately ... this kind of hard work and financial progress can be wiped out in a very short time by a predatory lender."

Cummings took pains to point out several salient facts: that so far, the predatory lenders working in Maine are based out of state; that not all higher-than-prime-rate mortgages are predatory -- though all predatory mortgages are subprime; and that many of those who believe they are only eligible for subprime mortgages can actually get loans at lower rates. Cummings also maintains that predatory lending by out-of-state financial service companies not only costs Maine homeowners $23 million a year, it takes legitimate business away from responsible in-state lenders.

So Cummings is proposing legislation that would outlaw the most destructive lending practices including excessively high fees and prepayment penalties while providing for stronger disclosure and lending requirements. His bill would also prevent the practice of flipping, in which lenders promote repeat mortgage refinancings that strip the equity out of a home.

These reforms aren't rocket science, though in previous legislatures even weaker provisions than these have been rejected.

In 2003, the financial services industry mounted a pre-emptive strike and inserted rehashed federal law language (to which they were already subject) into Maine law in the guise of predatory lending reform.

This time around, they're claiming that with just a little more enforcement, consumers will be protected and that any tightening of the laws will result in tighter credit and a depressed secondary mortgage market, which pumps capital into the state's mortgage holders.

Lawmakers need to be careful to keep credit available to Maine's neediest. But when wealthy financial services companies start worrying about consumer access to credit, that's a warning sign.

Cummings is on the right track with these reforms, which have been passed in substantially similar form in a dozen other states. And according to the Center for Responsible Lending in South Carolina, which is a consumer group dedicated to ending abusive financial practices, those states which have passed lending reform have seen no diminishment in consumer access to credit or in the secondary mortgage market. They've just seen a diminishment in access to consumers by predatory creditors. That's an important difference to remember.