June 5, 2013

Foreclosure Update

This issue contains the most recent information from the Mortgage Bankers Association's National Delinquency Survey, which includes data on mortgage delinquency rates, foreclosure initiation rates and foreclosure inventory for the first quarter of 2013.


Most indicators continue to show that New Hampshire's foreclosure problem is continuing along a path toward recovery.


Foreclosure Deeds

The 192 foreclosure deeds recorded in April of this year is a decrease of 30% from March, and a decrease of 50% from foreclosures recorded in April of 2012. The cumulative total for the first four months of 2013 is 26% below the total for the same period in 2012, and lower than the first four month total in any year since 2007. At the current pace, 2013 will end the year with fewer foreclosures than any of the prior five years. These reductions in the number of foreclosures are, in part, due to slow but steady improvements in the housing market and the overall economy. They also may be attributable in part to the easing of lender attitudes toward short sales, allowing underwater borrowers to exit ownership prior to foreclosure.









Foreclosure Auction Notices


Foreclosure auction notices provide an indication of the number of households that have fallen seriously behind in their mortgage payments. Foreclosure auction notices decreased in April by 13% to 456 from the 523 seen in March. This also is a decrease of 7% when compared with April of last year. Comparing the cumulative foreclosure auction notices for the first four months of 2013 with the same period in 2012 shows a 28% 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 575 notices per month in 2012, a decline of 29%.


Mortgage Delinquency Rates

Based on the Mortgage Bankers Association National Delinquency Survey, the first quarter 2013 delinquency rates decreased for the U.S., New England and New Hampshire. This first quarter decline repeats an established seasonal pattern of first quarter declines apparent throughout this data series. At the national level, this is the eleventh quarter in a row with a decline when compared with the same quarter in the prior year, and it is the lowest first quarter delinquency rate in the past four years. However, for New Hampshire and New England, this first quarter delinquency rate is slightly higher than the prior year, suggesting the regional market improvement as measured by this indicator may have stalled.


While these delinquency rates remain historically very high, the recent declines offer continued evidence that the foreclosure crisis has turned the corner. New Hampshire's delinquency rate, at 6.6% in this survey, is less than 0.2 percentage points lower than the rate for the U.S. and 0.7 percentage points lower than New England as a whole.




Foreclosure Initiation Rate


From the same source, the foreclosure initiation rate in New Hampshire in the first quarter of 2013 increased to 0.68%, but remains well below the historic peak rate of 1.09% recorded for the state in the third and fourth quarters of 2010. The foreclosure initiation rate in New England and the U.S. remained unchanged from the prior quarter and are at their lowest point since 2007. The rate of foreclosure initiation in New Hampshire continues to be below the rates in Rhode Island and Maine, but above the rates in Vermont, Connecticut and Massachusetts.








Foreclosure Inventory


The inventory of properties in the foreclosure process is now less than 2% of all homes with mortgages in New Hampshire. This rate decreased again in the first quarter of 2013, but remains less than one percentage point below its record high in 2010. At the current pace of foreclosure deed recordings, it could take nearly 12 months to clear this inventory without any new foreclosure initiations.




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 6.6% in the first quarter of 2013, it remains well 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 6.2% in March of 2013; however, it remains above its pre-recession rate of around 4%. Further, as the chart below suggests, there is a correlation between these two rates since most households with mortgages that experience a job loss will fall behind in their payments once savings have been exhausted. In addition, as the unemployment rate declines and households regain full employment, there is likely to be a lag in the corresponding decline in the mortgage delinquency rate as it may take a number of months for a delinquent household to recover its financial footing.




Resources for Homeowners


The foreclosure process can happen quickly, and it can also be very confusing for homeowners. HomeHelpNH is a statewide foreclosure counseling initiative that helps at-risk homeowners find and work with free experienced homeownership counselors to explore their options. For more information, or to get started, homeowners who need assistance should call 2-1-1 or visit HomeHelpNH.org now!


HomeHelpNH is a statewide foreclosure counseling initiative supported by the New Hampshire Department of Justice, the New Hampshire Banking Department and New Hampshire Housing.


Foreclosure Update

is a publication of the Policy, Planning and Communications Group of New Hampshire Housing Finance Authority

New Hampshire Housing Finance Authority is a self-supporting public benefit corporation. The Authority operates a broad range of programs designed to assist low- and moderate-income persons and families to obtain decent, safe and affordable housing. 



Jane Law
Director, Communications 
New Hampshire Housing Finance Authority


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