5/16/2013 - Foreclosures in the Granite State are on the decline.
The 274 foreclosure deeds in March represent a 24-percent decrease from March 2012. The first quarter this year marks a 16-percent decrease in foreclosures compared to the first quarter last year, according to the New Hampshire Housing Finance Authority. When the market collapsed, New Hampshire saw foreclosures skyrocket to nearly 4,000 in 2010. 2012 marked a 5-percent drop in foreclosures compared to 2011.
“It’s a long, slow downward trend,” said Jane Law, director of communications for the New Hampshire Housing Finance Authority. “Nothing is going to happen in a hurry, but as long as the economy continues to stay on a good trend, we expect to continue to see a long, slow decline.”
Gov. Maggie Hassan announced a three-year statewide initiative to provide free homeowner counseling to at-risk homeowners, which is funded through the National Foreclosure Settlement. As part of the program, eight regional nonprofit housing counseling agencies will provide services.
While foreclosures are decreasing, there are still people in danger of losing their homes. The housing market collapse was characterized by the subprime mortgage crisis and people overextending themselves, taking out mortgages they couldn’t afford.
“Some were in homes that if they tried to buy them today, they’d never be able to get it,” Law said.
Today, foreclosures are happening to folks who are losing jobs or hours at their job, to homeowners experiencing medical problems that prevent them from working, and to people who are going through a divorce. But officials aren’t seeing people who have overextended themselves to the same extent they had been, Law said.
“When unemployment goes down, we expect loan delinquency to go down as well,” Law said.
Foreclosure can happen relatively quickly in New Hampshire, since it’s a non-judicial state, which means banks do not have to take homeowners to court to foreclose on them. Once a homeowner is 30 days past due, the lender can send a delinquency letter and begin the foreclosure process. Law said a foreclosure can take place in as a little as 150 days.
“Time is not on your side,” Law said. “But a lot can be done.”
Help is a phone call away
It benefits everyone to avoid foreclosures. Homeowners get to stay in their homes, lenders get their money and neighbors don’t have to worry about decreasing property values.
When homeowners begin to experience difficulties making payments, they can call their lender or 211, the state’s service link line, and they’ll be put in touch with free in-state homeowner counseling, which is approved by the federal Department of Housing and Urban Development.
“The sooner you act, the more chance you can have to obtain a loan modification or work something out with your lender, depending on your circumstances,” Law said.
George Helwig, director of education and counseling with CATCH Neighborhood Housing in Concord, said the loan modification process takes about eight months on average.
“What I’m looking for is their current financial situation and their status with their mortgage. Actually, it’s very formula-driven,” he said.
Helwig begins by looking at a household’s total gross income and then comparing the mortgage payment and balance to other costs. The idea is to determine what the relationship between the borrower and the mortgage is now, and what it could be if he can get the borrower into some kind of a modification program.
Helwig said counselors determine what 31 percent of the household’s total income is then take the current mortgage payment and calculate what it would be if the interest rate were reduced to 2 percent and the term extended to 40 years. If that payment would be less than 31 percent of the household’s total income, Helwig said, a loan modification is likely possible. That’s one option.
A forbearance could allow someone who lost their job time to find a new job, as much as 12 months. Counselors look at how much someone is collecting in unemployment benefits to determine a more reasonable payment. At the end of the 12 months, the borrower would have to make up the difference between what they paid and what was owed during that period.
Helwig will also see people who ran into some temporary issues who are bouncing back. They might just need to make a payment and a half for a few months to catch up.
If the homeowner can’t stay in the house and they owe more than the home is worth, they can do a short sale. That can ultimately lead to a variety of options for the homeowner as well. If the bank finds a buyer at current market value, then the homeowner is on the hook for whatever is left over, although sometimes that amount is waived.
Sometimes the bank will allow the homeowner to simply sign the deed back over to the bank, and then the homeowner would again be on the hook for the leftover dollar amount on the loan. Other times the bank will forgive the borrower, although that comes with tax ramifications, Helwig said.