Number of foreclosures up more than 300 from 2004
If there’s any doubt the national mortgage crisis has hit New Hampshire, consider this: Four years ago, there were 32 foreclosures in Merrimack County; last year, there were 376.
And while there were no statewide foreclosure numbers available late last week, those who watch the real estate market said Merrimack County is not the exception. The foreclosure hotline the state Banking Department set up in December 2007 receives between 100 and 150 calls a month from mortgage holders in trouble, according to Banking Commissioner Peter Hildreth.
What state statistics don’t reveal is exactly why people are defaulting on their individual mortgage payments.
“It’s a combination of a lot of things,” said state Rep. Stephen DeStefano of Bow, who owns Century 21, a realty company in Concord that sells many properties taken in foreclosures. “People were in mortgages they couldn’t afford, where the rates bumped up. People lost their jobs. Divorce plays a big part. We’ve seen people who never even made it to their first or second mortgage payment.”
The number of foreclosures has been climbing for several years in New Hampshire but nothing like it has in the last two years.
Between 2006 and 2008, the number of foreclosures in Merrimack County went from 100 to 376, according to records at the Merrimack County Registry of Deeds. A sampling of the foreclosures showed many of those who lost their homes had signed their mortgages only two or three years earlier.
A woman lost her Wilmot property in early 2008 owing $155,619 on a mortgage she had signed in 2006, according to registry records. Another woman lost her Hooksett condominium about the same time because she couldn’t pay the $126,640 she owed on the mortgage she’d signed a year earlier.
A Concord couple lost their Alice Drive home, on which they owed $248,067, according to registry records. Another couple couldn’t pay the $140,000 they owed on their Airport Road home and lost it to foreclosure in November. They had signed their mortgage three years earlier.
The same scenario played out across the county throughout the year.
A Bow couple lost their Old Ferry Road home in February when they couldn’t pay the $191,250 they owed on it. A Boscawen couple lost their Tremont Street home a month later, unable to make their $202,755 mortgage, according to registry records.
A Concord couple bought their Chesterfield Drive home in 2004 for $223,700 but couldn’t pay the remaining $179,100 they owed this year. They lost the property to foreclosure in December.
The records at the registry do not indicate why the properties ended up in foreclosure. Attorney Raymond D’Amante of Concord, who represents banks and creditors in property transactions, blames what he described as unscrupulous mortgage companies.
“The problem is not with the banks,” he said. “I think they have done their due diligence and not made loans to people who cannot afford to pay them back. The problem is with mortgage companies that . . . frankly in many cases were dishonest in marketing loans to customers.”
D’Amante said he turned away several mortgage companies that asked him to handle their closings because he disliked their “predatory” lending style. He rejected companies that offered adjustable rate mortgages or mortgages that had excessive or impossibly low upfront costs.
All, he said, were red flags. “A lot of (home buyers) got into a jam not understanding the mortgage they were getting into,” he said. None of his firm’s clients have landed in a foreclosure, D’Amante said, and he credits that to its selective screening.
Hildreth, the banking commissioner, said the calls to his office’s foreclosure hotline suggest there are several reasons driving the climb in foreclosure. The subprime mortgages that D’Amante described seem to have played a significant role, Hildreth said. More recently, job loss has been an increasing culprit.
Hildreth created the hotline at the end of 2007 as a way to give New Hampshire mortgage holders in trouble a more direct connection to their mortgage companies.
It works this way: When a property owner calls the hotline – 800-437-5991 – for help with a foreclosure, Hildreth’s office contacts the person at the mortgage company with the authority to modify the terms of the loan. The state’s authority is limited; it can reach out to only those mortgage companies it regulates, and it can’t force a company to adjust a loan.
Still, the hotline has helped, Hildreth said.
One woman who was going to sell her home in a short sale, for a loss, was able to renegotiate her loan and stay in her home, he said. In another case, Hildreth’s office got an auction set for a Friday postponed until a Monday so the property owners could secure a new loan.
“Call us early,” Hildreth advised. “If they can’t pay the mortgage and have no ability to, there is nothing we can do. But we have had some luck.”
None of those interviewed for this story foresaw an immediate turnaround in the housing market.
The foreclosures have created a surplus of properties, they said. That and the fact that foreclosed homes are selling for a bargain at auctions is driving housing prices down. Until that housing stock is absorbed, the economy will continue to suffer and eat away at jobs. Unemployment will, in turn, land more people in foreclosure.
It’s not all bad news though, DeStefano said. If you’re looking to buy a property, this is the time. Especially if you don’t have to sell first.
He recently sold a three-bedroom ranch in Concord that had been taken in a foreclosure for $81,500. Three years ago, the property sold for $189,000, DeStefano said.
“It’s a great time to be a first-time home buyer,” he s