New Hampshire has one of the highest rates of homeownership in the country, currently ranked 4th at a rate of 71%. Like most states, that number is slightly down from a few years ago when it peaked at 76%. Home buyers in the Granite State want to own their own piece of the American dream and many will seek special or alternative ways to finance their purchase. Standard mortgage loans offered by big lenders can require a lot of paperwork and are often slow to fund. Buyers willing to put their own home or another piece of owned real estate up as collateral will sometimes use what are called hard money loans. These are offered by individual and small group investors and they usually require much less time and paperwork.
New Hampshire Foreclosure Laws
Most foreclosures in the state of New Hampshire are managed through a non-judicial process, meaning that it happens outside of the court system. Some states require that a foreclosure be handled by the courts, in what is called a judicial process. Homeowners in New Hampshire used to have only 26 days to ready themselves for a foreclosure sale, in 2016 that timeframe increased a little bit but in general, foreclosures in the state move very fast and homeowners who fall behind on payments should make sure they know what to expect for the best chance to save their property from foreclosure.
Methods of Foreclosure
New Hampshire has three special methods of foreclosure. The following three options are ways that a lender can choose to execute on their intention to sell a property in foreclosure in the state of New Hampshire.
1. Entry under Process - The lender may foreclose by entering the property under process of law and maintaining actual possession of the property for one year.
2. Entry and Publication - By peaceable entry onto the property and continued, actual, peaceable possession for a period of one year, and by a publishing a notice stating the time of possession, the lender and borrowers name, the date of the mortgage and a description of the property in a newspaper of general circulation in the county where the property is located. The notice must be published for three (3) successive weeks, with the first publication appearing at least six (6) months before the borrowers right to redeem has expired.
3. Possession and Publication - By the lender in possession of the property publishing a notice stating that from and after a certain day, the property will be held for default of the mortgage and the borrowers rights to the property will be foreclosed. Said notice must be published in a newspaper printed in the county where the property is located for three (3) successive weeks and must give the borrower and lenders name, the date of the mortgage, a description of the property and the lenders intention to hold possession of the property for at least one (1) year.
Borrowers have no rights of redemption when any of the three (3) special methods of foreclosure are used.
Property Redemption after Foreclosure Sale
In some states, you can redeem (repurchase) your home within a certain period of time even after a foreclosure sale has taken place. New Hampshire law, however, does not provide the borrower with the right to redeem after the foreclosure. The homeowner can still redeem right up until the time of the foreclosure sale by paying off the full amount of the unpaid mortgage debt. This will stop the foreclosure. N.H. Rev. Stat. Ann. § 479:18.
Deficiency Judgments in New Hampshire
When a home is lost to foreclosure and sold to the highest bidder, sometimes the money from that sale is not enough to cover what was owed by the homeowner in the first place. In these cases, a lender will sometimes seek relief by asking the courts to force that homeowner to pay the remaining balance with what is called a deficiency judgment. In New Hampshire, the foreclosing party may obtain a deficiency judgment, though it must make every reasonable effort to obtain a fair and reasonable price at the sale.
Deed in Lieu of Foreclosure
Many homeowners who are at risk of losing their homes will ultimately decide to walk away from their property instead of fighting the foreclosure process. Known for being stressful and expensive, many homeowners feel they are unable to go through with foreclosure proceedings and simply choose to do nothing. However, in New Hampshire, home owners in this situation are allowed to enter into an agreement called “deed in lieu of foreclosure.” This agreement is made between the lender and the borrower, where the borrower voluntarily gives over ownership of their home. Also known as “cash for keys” this agreement may even allow the borrower to receive a small cash settlement in exchange for making the process easier on lenders.
Grace Period Notice
New Hampshire does not technically have a built-in waiting period for the foreclosure process to start. Some states force the lender to give a set number of days to mediate or make special arrangements to help the homeowner stay in their homes. But in New Hampshire, the process can start immediately when a lender declares that they are in default on the loan. However, New Hampshire does require a 30-day notice, so while it is not actually a grace period, homeowners in jeopardy do have some time to respond or to negotiate.
Protection For Military Service Members
New Hampshire law extends the protections under the Federal Service Members Civil Relief Act(which includes protections against foreclosure) to members of the state guard, National Guard, or militia called to active duty by the governor for a period of 30 days or more. N.H. Rev. Stat. Ann. § 110-C:2.
High Risk Mortgage Protections
Some states extend special help or protections to homeowners with what is considered a high risk mortgage - one with a very high interest rate or where the buy has a negative credit history but was still allowed to purchase the home. New Hampshire does not extend special help in these cases. All homeowners are subject to the same laws and provisions across the state.
Additional State Laws
The maximum legal interest rate on a loan in New Hampshire is 10%. New Hampshire imposes a 10 percent interest rate limit on loans that lack a written contract, with various exceptions.
New Hampshire is not a homestead state. The state of New Hampshire provides up to $100,000 worth of property (based on equity) to be declared a homestead in the event of a bankruptcy. This amount may be doubled for married couples.
Lender Licensing Requirements
The New Hampshire Banking Department supervises all aspects of the Mortgage Brokers application and activities in New Hampshire. Offices are located in Concord. All New Hampshire mortgage licenses are handled through the National Mortgage Licensing System.