Homeowners in New Hampshire who are behind on their mortgage payments should stay on high alert. Why? Because in most cases, New Hampshire state law requires the foreclosing bank to provide the homeowner with only one notice that the bank will sell the home at an upcoming foreclosure sale.
Fortunately, federal law provides most homeowners with more substantial protection. Specifically, the bank must typically allow a 120-day waiting period to pass before the foreclosure can officially begin. This additional time gives the owner an opportunity to work with the bank to find a way to avoid a foreclosure.
When Will a New Hampshire Foreclosure Start?
After you get behind in your monthly mortgage payments, federal law generally requires the servicer to give you some time to get your finances in order before starting the process of foreclosing the home. Specifically, under federal law, foreclosure is prohibited unless the borrower is more than 120 days behind on the loan. (12 C.F.R. § 1024.41).
If the borrower submits a loss mitigation application asking for a mortgage workout before the bank makes the first foreclosure notice or filing, it can’t begin the process until it:
- rejects the borrower’s application and the time for an appeal expires
- the borrower turns down or fails to accepts the foreclosure alternative that the servicer offers, or
- the borrower breaches the terms of a loss mitigation agreement (for example, by failing to make payments under a modification agreement). (1 2 C.F.R. § 1024.41).
What Type of Foreclosure Process Does New Hampshire Allow?
In New Hampshire, the bank can pursue foreclosure using a judicial court process or a nonjudicial, out-of-court procedure. Most banks select the faster, cheaper nonjudicial process.
Here’s a quick rundown of how both types of foreclosure work.
Judicial Foreclosure Process in New Hampshire
The bank starts a judicial foreclosure by suing the borrower in court. If the borrower doesn’t respond to the suit, the bank will win the case and receive a default judgment. But the borrower has the right to defend against the foreclosure by filing an answer. If the borrower decides to file an answer, the bank can’t get a default judgment.
But if the answer is insufficient—say the main facts of the case aren’t in dispute, any defenses the borrower has raised lack merit, or the borrower didn’t show that the bank or servicer violated the law—the bank will probably file a motion asking the court to grant summary judgment. Even if the answer does raise valid issues, the bank might still try for summary judgment. (It’s best to hire an attorney to help you if you want to file an answer to the suit so that you can avoid summary judgment.)
Should the answer raise potentially legitimate defenses to the foreclosure, and the court denies summary judgment after the bank’s motion, then a trial will likely take place. The bank must put on evidence to the court’s satisfaction to win the case.
Nonjudicial Foreclosure Process in New Hampshire
Nonjudicial foreclosures don’t utilize the court system. Instead, the bank follows a process outlined in state law.
How Does New Hampshire’s Nonjudicial Foreclosure Process Work?
In New Hampshire, the requirements of the bank are minimal for a nonjudicial foreclosure. The bank must personally serve or mail one notice about an impending foreclosure sale to the borrower, called a “notice of sale,” at least 45 days before the sale. (N.H. Rev. Stat. § 479:25). Before January 1, 2016, the notice was even less—25 days before the sale.
Additionally, the notice is published in a newspaper for three weeks before the sale.
What Options Are Available for Borrowers During Foreclosure in New Hampshire?
If you want to stop a New Hampshire foreclosure, you might be able to reinstate the loan or qualify for an alternative to foreclosure.
- Reinstating the loan. Sometimes a borrower can catch up on the delinquent payments, costs, and fees and “reinstate” the loan. Once reinstated, the foreclosure stops, and you’ll resume making monthly payments. While New Hampshire doesn't have a law that specifically gives the borrower a reinstatement right, most mortgage contracts allow the borrower to do so. Also, if the contract doesn't provide the right to reinstate, the foreclosing bank might agree to it if you request a reinstatement within a reasonable time before the sale.
- Apply for loss mitigation. If you haven't already applied and been denied, you might qualify for an alternative to foreclosure after applying for a loss mitigation option.
Does New Hampshire Allow Deficiency Judgments After Foreclosures?
In New Hampshire, if the foreclosure sale price isn't enough to pay back the mortgage loan, the bank can file a separate lawsuit to get a “deficiency” judgment. A “deficiency” is the difference between the sale price and the debt. (N.H. Rev. Stat. § 508:6).
After getting a deficiency judgment, the bank can use a variety of collection methods, such as a bank levy or wage garnishment, to collect the deficiency. It’s not the foreclosure itself, but rather the bank’s ability to get this type of judgment, that will often drive people to file for bankruptcy.
Does New Hampshire Provide a Redemption Period for Foreclosure?
Some states have a law that allows the foreclosed homeowner to redeem the home within a certain time after the foreclosure. New Hampshire doesn’t have a law allowing redemption after a nonjudicial foreclosure.
But the homeowner can “redeem” until the foreclosure sale by paying off the entire unpaid mortgage debt (including the full outstanding principal balance, interest, fees, and costs). (N.H. Rev. Stat. § 479:18).
New Hampshire’s Foreclosure Laws
This article contains details on foreclosure laws in New Hampshire. Statutes change, so checking them is always a good idea. To find New Hampshire’s foreclosure laws, go to Title XLVIII, Chapter 479 of the New Hampshire Statutes. How courts and agencies interpret and apply the law can also change. And some rules can even vary within a state. These are just some of the reasons to consult with an attorney if you’re facing a foreclosure.
While this article provides an overview of a typical foreclosure in New Hampshire, remember that state and federal foreclosure laws are complicated, and cases can proceed differently depending on the circumstances. Also, servicers and banks sometimes make mistakes or skip steps, but most foreclosure errors go uncontested. In cases where the servicer or foreclosing bank omitted a required step, made an error, or violated state or federal foreclosure laws, you could have a defense that could force it to start the foreclosure over, or you might have leverage to work out an alternative.
If you believe your rights were violated, talk to a local foreclosure attorney or legal aid office immediately. A lawyer can give you information about different ways to fight the foreclosure in court, as well as information about different ways to potentially avoid foreclosure.
A HUD-approved housing counselor can also provide helpful information (at no cost) about ways to prevent a foreclosure.