Sunday, March 12, 2006

ARM Loans Folding In New Hampshire

Some reports on New Hampshire. "Housing experts say the downturn that some predicted would decrease the value of a home by as much as 20 percent in New Hampshire hasn’t materialized. In fact, the housing market is thriving and healthy here for buyers and sellers. And home prices did not and are not likely to decline, experts say."

"Economist Dennis Delay said another indicator, foreclosure rates, also shows a vibrant market in New Hampshire."

The Boston Globe. "A growing number of homeowners in New Hampshire are being forced out of their homes by foreclosure. The number of foreclosure filings in the state jumped from 188 in February to 263 in March. In Strafford County, there were 19 foreclosures in January and February, compared to 40 during all of 2005."

"'There is an alarming trend occurring here,' Strafford County Registrar of Deeds Leo Lessard told Foster's Daily Democrat. Lessard and others who watch housing trends say the increases probably are due to rising interest rates and high home prices."

"For years, declining home mortgage rates drew people to take out high-risk interest-only or adjustable-rate mortgages on homes they never would have been able to afford otherwise, Lessard said. Now, some homeowners can't afford the payments with mortgage rates going back up. 'Home prices were so high, people borrowed so much money that if there was a blip in the economy, foreclosures were inevitable,' Lessard said."

"ForeclosuresNH says 52 percent, or 98 of February's foreclosure notices went to homeowners who purchased or refinanced their homes in the past two years. Co-founder James Kenney said the numbers demonstrate that people who bought or refinanced with adjustable-rate mortgages now cannot afford payments that increased 'anywhere from 20 to 40 percent.'"

"Gerald Little, president of the New Hampshire Bankers Association, cautioned homeowners against taking out interest-only, adjustable-rate loans. Unless people have 'a strong idea that something is changing in the not-too-distant future,' like a home relocation or 'a major bump in income,' homeowners need to consider more moderate purchases that can get them more stable loans, he said."

"'It's always a concern if people borrow to their absolute maximum of capacity. Should the environment turn, they may not be prepared to meet their debt load,' Little said."


At 7:58 PM, Blogger Auctionbuddy said...

The 40% increase in NH forecloseures in one month is HUGE.

The snowball is gaining momentum...

At 4:35 PM, Blogger BostonBear said...

Ben, or others - are there any big public foreclosure managment services or similar companies? Or are these all small local firms? If so they're all small local guys why is that? Is there a pure play that's listed anywhere? Thanks

At 4:39 PM, Blogger Ben Jones said...

There are some bear outfits. One I have trierd to get to work with me, and may be able to, is Mercury Alliance and Tom DiMercurio.

As this becomes more critical, I will put much more time into finding companies like what you are looking for. Thanks for posting.

At 4:57 PM, Blogger BostonBear said...

Thanks Ben, this is helpful. I need to get up to speed on foreclosure servicing opportunities - there is either a great trade OR a small-business opportunity here. My TOL position from last summer b/c of your blog (thank you) can only carry me so far...

Boston Bear

At 7:32 PM, Blogger mort_fin said...

FHA uses contractors to manage their REO, and I presume most other outfits do too. As of 4 or 5 years ago (last time I looked) they were all small local outfits. I'd bet that nosing around in will reveal something about bidding on REO management contracts.

In re a 40$ increase in NH foreclosures, you have to remember that it's from a very low base. NH, VT, ME have historically had about the lowest foreclosure rates in the country. A 40% increase in a tiny number is still a tiny number.


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