Tuesday, December 19, 2006

"Payment Shock" In New Hampshire

The Concord Monitor reports from New Hampshire. "The number of people in Merrimack County losing their homes to foreclosure has gone up nearly 60 percent in the past year. According to credit and mortgage counselors, homeowners who signed up in recent years for adjustable-rate and interest-only mortgages, hoping to refinance when their rates increased, are having a hard time making their payments."

"The sluggish real estate market had made it harder for homeowners to draw equity from their property or sell to recover debt. 'Some people are apparently experiencing, for lack of a better word, payment shock,' said Dean Christon, executive director of the New Hampshire Housing Finance Authority."

"Last year, there were 56 foreclosures in Merrimack County. So far this year, there have been 89, an increase of 58.9 percent. In Concord, that number went from six foreclosures in 2005 to 16 this year."

"Forty of this year's foreclosures were on homes financed with adjustable rate mortgages that started in 2002 or later, Register of Deeds Kathi Guay said. 'Those people that got a great interest rate to begin with, now that the interest rates have changed, have run into a problem,' she said."

"Kerry York, executive director of Consumer Credit Counseling Service of New Hampshire and Vermont, said the increase in foreclosures can be attributed to many factors, not just the type of mortgage. Many of the people serviced by his agency have reached their limit on several credit cards and are facing high interest rates on those, York said. The cost of gas and home heating fuel is going up. And then their mortgage rate adjusts and their payments get bigger."

"'What was a problem six or eight months ago is now a huge problem,' he said. 'Income doesn't go up - not at that rate.'"

"James Kenney runs a website aimed at people who want to invest in foreclosed properties. He said the market for them is good. 'Since there have been so many foreclosures lately, the banks aren't really in the business of real estate, so they want to get rid of the properties quickly,' he said."

"According to his records, 418 foreclosures were posted in October, an increase of 214 percent over October 2005."


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