Foreclosure numbers are falling in NH, but plenty of problems still exist

The foreclosure numbers are looking better these days, but that doesn’t mean the property crisis that helped cause the Great Recession is over in southern New Hampshire.

“Sadly enough, we’re seeing more people coming through our doors for counseling,” said Paul McLaughlin, home ownership program manager for NeighborWorks Southern NH, which counsels homeowners facing foreclosure. “The last three months of 2013, we saw 75 percent the number of clients that we had seen the whole previous 12 months.”

Raw numbers indicate that things are getting better. The number of foreclosures, residential and commercial, recorded at the Hillsborough County Registry of Deeds office fell by almost one-third last year, after falling about 10 percent in 2012.

“That doesn’t account for all the people out there who haven’t hit that point yet – who are about to go delinquent, because they lost a job, had a death in the family, or some other factor,” McLaughlin said. “We’re also seeing more people that have already tried at least once or twice to work with their lender without success, or people that actually did get a (loan) modification but found it wasn’t enough.”

And while the subprime situation has largely worked its way through the system, he added, “We do occasionally see somebody with a subprime loan who is just starting to deal with it.”

Greater Nashua is still seeing a lot more foreclosures than it did in the boom years, however. Hudson, for example, saw 15 percent more foreclosures in 2013 than in 2007, the year that foreclosures first began to climb as an early sign of the subprime mortgage crisis. Merrimack had 44 percent more foreclosures than in 2007.

In Nashua, foreclosures have fallen almost back to the level of 2007, although that’s partly a reflection of the fact that the region’s urban areas were hit earlier by the subprime crisis than more rural areas.

Part of this improvement is undoubtedly because of the economy, but it may also reflect efforts like those of NeighborWorks that stem from New Hampshire’s share of a $10 billion settlement reached by the federal government with five banks (Bank of America, Citigroup, GMAC, JPMorgan Chase and Wells Fargo) whose lending practices contributed to the foreclosure crisis.

New Hampshire received $43.6 million from that settlement.

“Most of the money went directly from banks to consumers in the form of principal reduction and interest rate reduction,” said James Boffetti, senior assistant attorney general in charge of consumer affairs.

Boffetti said that $19 million was earmarked to pay banks to reduce the principal – that is, the amount of money still owed – on New Hampshire home loans facing foreclosure. Actual principal reduction has been much greater, he said: “I think that figure’s going to come in around $60 to $70 million – although that has still to be verified by the national monitor.”

Another $9 million or so has been used to reduce the interest rates on New Hampshire home loans, he said, while about $6.5 million was paid out directly to some 4,400 homeowners in the form of checks for $1,480 each.

New Hampshire appears to be ahead of the national trend in the category of direct payments. A report by Huffington Post last week said that as of January, more than 730,000 settlement checks to homeowners, worth a total of $600 million, from the foreclosure settlement have not been cashed, many because the affected homeowners can’t be found, and questions have been raised about the effectiveness of the consulting firm hired by the Office of the Comptroller of the Currency.

Another $10.5 million from the settlement is being used for indirect aid, said Boffetti, including:

About $3.5 million of that is paying eight housing counseling services like NeighborWorks, which works in Nashua and Manchester, as well as the statewide 2-1-1 service, which provides a single phone number for homeowners begining to seek aid.

This counseling program, known under the umbrella term HomeHelpNH, has been going on for about a year and will continue for two more.

In its first year, Gov. Hassan reported last week, it “assisted over 800 at-risk homeowners” to make their mortgages current, modify their mortgage, or even sell their properties.

“That’s the first question we ask: Do you want to keep the house?” McLaughlin said. “For some people, just guiding them through the short sale process, rather that having them just walk away (from the loan), is a big benefit.”

People who are facing foreclosure can find out what help is available by calling 2-1-1 or visiting

About $3.5 million for legal services from the Legal Advice Referral Center and other groups. This is designed to give people free or low-cost legal help in dealing with the complexity of banks’ demands. That program is still going on.

The remainder of the money being used to set up a financial fraud unit in the attorney general’s office that will operate for at least four years and to create an integrated consumer complaint database.

The database will allow different state agencies that receive or deal with complaints about foreclosures to “more efficiently share complaint information,” Boffetti said.

As McLaughlin noted, complaints are likely to continue.

“We hear the stories all the time: my documents got lost, they changed my contact (information), things like that. That’s where people need help … from experienced counselors,” he said.

David Brooks can be reached at 594-6531 or dbrooks@nashua Follow Brooks on Twitter (@GraniteGeek).