Wednesday, June 27, 2012

Foreclosure in New Hampshire: Lose your house in 120 days!

In New Hampshire, most home mortgages have a "power of sale" clause.  A "power of sale" clause means that the lender can take your home without taking you to court if you are behind in your home mortgage payments. Because of this "power of sale" clause allowed in New Hampshire home mortgages, New Hampshire is called a "non-judicial" foreclosure state.

A non-judicial foreclosure in New Hampshire can happen very quickly.

Take a look at the following time line from the HomeHelp web site to understand the process:

Here are the steps to losing your home:
1. Default: Meaning, you are not current in your payments.
2. You may also incur late fees, penalties and the lender's costs and fees for the lender's attorney for being in default - so being late in your mortgage payments may cause you to incur these $$$additional charges.
3. Bank sends you a notice of foreclosure sale at least 25 days before the foreclosure sale.
4. Lender advertises once a week for three weeks before the foreclosure sale of the date and time the foreclosure sale is going to take place.
5. Foreclosure sale:  An auctioneer on behalf of the lender shows up on your front lawn on the day of the foreclosure sale and auctions off your home. Up to the point of foreclosure sale, you can "reinstate" by paying back the lender all the past due payments, costs, fees, late fees and penalties - again, it is not just paying back the late mortgage payments.
6. Whoever buys your home at the foreclosure sale has 60 days to record the foreclosure deed.
7. Eviction of the homeowner.

How do I stop foreclosure?
1. $$$:  Pay the lender all of the back payments, late fees, penalties etc., that have accrued up to the date of the foreclosure sale, also called "curing the arrearages" - and then you can go back to making your normal monthly mortgage payments on time - but you normally only have until the time the foreclosure sale takes place to "cure the arrearages".
2. TRO:  You may be able to seek a temporary restraining order, also called an "injunction", in the state court to temporarily stop the foreclosure sale, but you need to give the judge a reason to stop the foreclosure sale and you need to do this before the foreclosure sale.
3. Bankruptcy:  File a petition in bankruptcy which automatically stops the foreclosure proceedings. In a Chapter 13 bankruptcy proceeding, you can have up to 60 months (5 years) to cure the back payments you owe to the lender and keep your home, as long as you can make the normal monthly payments going forward.

Lesson Learned:  As soon as you are involved in the foreclosure process, consider seeking the advice of an attorney. Most foreclosure and bankruptcy attorneys provide an initial free consultation (I do) to help you understand your options.  Good luck!

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