June 4, 2014

Foreclosure and Housing Market Update

Foreclosure Deeds and Auctions

 

The number of foreclosure deeds and auction notices remained relatively stable from April to May. Although these statistics currently demonstrate little month-to-month change, other indicators, such as those reported in the first quarter 2014 update of the Mortgage Bankers Association’s National Delinquency Survey, show continued improvements in other delinquency and foreclosure indicators. That first quarter update is included in this month’s Update.

 

Also in this month’s update, we bring you a synopsis of what you will find in Part 3 of New Hampshire Housing’s latest study, “Housing Needs in New Hampshire.” This last of three parts discusses “The Evolving Environment and Housing’s Future.” The study was published on our website over the course of several weeks during the month of April.

 

 

Foreclosure Deeds

The 210 foreclosure deeds recorded in April of this year reflect an increase of 9% from April of 2013, the first time in over a year that there has been an increase when compared with the same month in the prior year. However, the cumulative total for the first four months of 2014 is still 15% below the total for the same period in 2013, and lower than any year since 2007.

 

  

 

Foreclosure Deeds Bar Chart

 

    

 

 

Foreclosure Auction Notices

 

Foreclosure auction notices provide an indication of the number of households who have fallen seriously behind in their mortgage payments. Foreclosure auction notices declined in April by just 1.4% to 275 from 279 in the prior month. However, this is a decrease of 39% when compared with April of last year. Comparing the cumulative foreclosure auction notices for the first four months of 2014 with the same period in 2013 shows a 32% decline in activity. Over the long term, foreclosure auction notice activity has declined from an average of 809 notices per month at its peak in 2010 to 368 notices per month in 2013, a decline of 55%.

 

 

Source: Real Data Corp., compiled by New Hampshire Housing

 

New Hampshire Housing has been offering these foreclosure status updates every month since mid 2008. The past four months of updates are available on our website (http://www.nhhfa.org/housing-data-foreclosure-subprime-lending.cfm).

 

 

Mortgage Delinquency Rates

 

Based on the Mortgage Bankers Association National Delinquency Survey, the first quarter 2014 delinquency rates decreased in the U.S., New England, and New Hampshire. This first quarter decline in delinquency rate is repeated throughout this series. These are the lowest first quarter delinquency rates since 2008. At the national level, this is the fifteenth quarter in a row with a decline when compared with the same quarter in the prior year, Despite these recent improvements, delinquency rates remain at their prerecession levels and stubbornly high.

 

 

New Hampshire’s delinquency rate, at 5.5% in this survey, is only 0.4 percentage points lower than the rate for the U.S. and 0.9 percentage points lower than New England as a whole. Rhode Island has the highest delinquency rate within the New England states due to a slower growing economy and higher unemployment rate. Massachusetts continues to have a higher than average delinquency rate than the regional average despite its robust overall economic growth. Vermont’s delinquency rate remains low probably because that state was not as severely impacted by the recent recession and real estate market decline. As for Maine and Connecticut, their delinquency rates are improving, as are their economies. The rate of improvement is just not as rapid as some of the other New England states; New Hampshire as an example.

 

Installments past due chart

 

 

Foreclosure Initiation Rate

 

The foreclosure initiation rate in New Hampshire in the first quarter of 2014 declined to 0.38%, down from 0.51% in the prior quarter, and nearly 0.7 percentage points below the historic peak rate recorded for the state in the third and fourth quarter of 2010. This is the lowest rate since the third quarter 2006. The foreclosure initiation rate in the U.S. and New England also declined to their lowest respective rates in the past seven years.

 

foreclosure rates chart

 

The decline in the New England foreclosure initiation rate is due in large part to notable declines in this rate in Massachusetts and Connecticut; which combined have more than 70% of all mortgages in New England according to the Mortgage Bankers report. The rate of foreclosure initiation in New Hampshire continues to be below the rates in Rhode Island, Maine and Connecticut, but above the rate in Massachusetts. The reasons for these differences vary from state to state. In the case of Massachusetts, the housing market and overall economy are improving more rapidly than in New Hampshire and may allow delinquent borrowers to exit homeownership prior to foreclosure initiation. The economies in Rhode Island, Connecticut and Maine are recovering more slowly than in Massachusetts and New Hampshire. Vermont did not suffer the depths of the recent recession experienced by other New England states, but is also facing a slow recovery.

 

Foreclosure initiations chart

 

 

Foreclosure Inventory

 

The inventory of properties in the foreclosure process decreased again in the first quarter of 2014, and is now more than one percentage point below its record high in 2010. At the first quarter 2014 rate of 1.4% of all homes with mortgages in New Hampshire, this number represents about 3,500 homes. Nonetheless, at the current pace of foreclosure deed recordings, it could take more than 12 months to bring this inventory back to pre 2006 inventory levels, without any new foreclosure initiations.

 

Foreclosure inventory

 

Mortgage Delinquency and the Unemployment Rate

 

While the mortgage delinquency rate in New Hampshire has declined from its peak of 9% in the fourth quarter of 2009 to 5.5% in the first quarter of 2014, it remains above its pre-recession rate of less than 4%. In a similar manner New Hampshire’s unadjusted unemployment rate has shown erratic but regular improvement from its peak of 7.3% in early 2010, to 4.3% in April of 2014; however, it remains above its pre-recession rate of less than 4%.

 

Foreclosure inventory

 

The Mortgage Bankers Association publishes their National Delinquency Survey on a quarterly basis. Additional information can be found on their web site (www.mortgagebankers.org) under “Research”.

 

 

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Housing Needs in New Hampshire

 

 

 

A New HomeHelpNH.org is Launched

 

Governor Maggie Hassan recently announced that the statewide foreclosure initiative, HomeHelpNH, launched an enhanced version of its website, www.HomeHelpNH.org in order to help better counsel New Hampshire homeowners at risk of foreclosure.

 

As was stated in the Governor’s press release, “in addition to a new, sleeker look and easier navigation, www.HomeHelpNH.org now provides an online intake form so that homeowners can be more easily referred to a housing counselor or, for those who qualify, to free or low-cost legal services in their area. At-risk homeowners can still dial 2-1-1 toll-free from anywhere in the state to receive assistance, and the site’s new design is now mobile- and tablet-compatible, making it easier to access for people who rely on their mobile devices for internet access.”

 

The release went on to say, “in the initiative’s first year, HomeHelpNH counselors assisted more than 800 households and provided approximately 5,600 hours of free guidance on mortgage modifications, mortgage document review, credit and budgeting analysis, rental help and legal service referrals for at-risk households. HomeHelpNH helps at-risk homeowners bring their mortgages current, modify their mortgages or sell their properties at short sales, working with homeowners to make an honest and informed evaluation of their current housing and finances in order to help them keep their homes or plan a move to more financially secure housing when necessary.”

 

HomeHelpNH.org is sponsored by the New Hampshire Department of Justice, the New Hampshire Banking Department and New Hampshire Housing Finance Authority and funded with $3.5 million from the National Mortgage Servicing Settlement, HomeHelpNH is a three-year, statewide foreclosure counseling initiative that is part of a larger effort, which includes funding for legal services through the New Hampshire Foreclosure Relief Project. The initiative’s goal is to help at-risk homeowners find solutions through free, comprehensive pre- and post-foreclosure counseling. Homeowners seeking more information should dial 2-1-1 or go to www.HomeHelpNH.org.