Officials seeing surge in foreclosures
DOVER, N.H. --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, a business that acts as an intermediary between investors seeking to buy foreclosed homes and sellers whose homes are being foreclosed, 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.
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Information from: Foster's Daily Democrat, http://www.fosters.com
