Bar News - September 17, 2014
Foreclosure Relief Project Assists Hundreds of NH Families
Attorneys participating in the NH Bar Association’s Foreclosure Relief Project have assisted 661 New Hampshire households – across a range of income levels – since the project’s 2013 launch.
Made possible by the National Mortgage Foreclosure Settlement, the project brings together New Hampshire’s legal services organizations and housing counselors to help homeowners dealing with mortgage foreclosure and mortgage-related issues.
Although the rate of foreclosure has declined over the past year, many homeowners remain delinquent on their mortgage payments and are in danger of losing their homes. There are reasons to believe this trend will continue into 2015, including:
- Most loan modifications obtained through the federal Making Home Affordable Program included periodic interest rate increases over the first 5-10 years of the modified loan. Many modified loans are scheduled for interest rate re-set beginning in 2015. After re-sets, the average modified mortgage payment will increase by about $200 per month.
- Middle class squeeze – incomes remain flat yet health care, utility, oil and food expenses continue to rise as well as mortgage payment increases as stated above.
- Home equity lines of credit obtained with interest-only payments for 10 years will begin to come due in full or switch to principle and interest payments increasing the monthly payment. Balloon loans will need to be refinanced requiring full amortization of principal and interest.
- Underwater and “functionally underwater” homes are estimated to be near 50 percent. The option of selling the home is non-existent.
- Younger people, as a group, have extremely high debt compounded by unemployment or under-employment, depressing the demand for “starter homes,” which is lowering fair market values across the spectrum.
Bottom line: Many New Hampshire homeowners will continue to struggle with their mortgages in 2015. The Foreclosure Relief Project remains committed to providing guidance and support to private attorneys representing homeowners in crisis.
Save the date for the Foreclosure Relief Project’s Fall Meeting: Be Prepared for 2015, from 9 a.m.-1:30 p.m. Thursday, Nov. 13, at the NH Bar Center. (Note: This is a meeting, not a CLE seminar.)