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By Stephen Frothingham, Associated Press Writer | December 10, 2007
CONCORD, N.H. --New Hampshire home owners, like those around the country, are increasingly likely to be forced into a mortgage foreclosure in coming months.
But -- while it may be of little comfort to those individuals -- the state economy will be just fine, a state study released Monday found.
New Hampshire is likely to come through the foreclosure wave better than most parts of the country and fare better than it did in the New England real estate bust of the early 1990s, the state Housing Finance Authority found.
Why? New Hampshire's banks are less vulnerable because they now typically secure loans nationally and internationally to spread out the risk. And there has been less real estate speculation and overbuilding in recent years than before the previous down turn and compared to the states hit hardest by foreclosures.
Relative to other states, New Hampshire has had less housing speculation in recent years, and nearly 30 percent of New Hampshire's owner-occupied homes have no mortgage.
Less than 5 percent of New Hampshire mortgage holders are behind in their payments, while in Michigan, one of the states hit hardest by the foreclosure crisis, more than 8 percent are behind.
Still, the study left little doubt that the foreclosure wave, driven by subprime loans, has arrived in New Hampshire and is likely to increase.
Subprime loans have become increasingly popular in the state, expanding from 2 percent of mortgage loans in 1998 to 12 percent this year. In the last three years the delinquency rate for subprime adjustable rate loans has more than doubled in the state, and so has the foreclosure rate.
In August, September and October this year, an estimated 150-200 deeds per month were foreclosed in the state, up from less than 50 per month in 2005 and about 100 per month last year.
By next summer, the study projects, foreclosures will come at the rate of about 300 foreclosures per month.
The report did note that New Hampshire's economy could still be harmed by the national subprime loan crisis, particularly if it pushes the country into a recession.
© Copyright 2007 The New York Times Company
