| New Hampshire Laws, Legal Process - The Basics | | | | sell it in a "as is" condition. |
| New Hampshire primarily operates as a title theory | | | | Banks are not investors or property managers of |
| state where the property title remains in trust until | | | | foreclosed real estate and want to dispose of the |
| payment in full occurs for the underlying loan. | | | | asset as quickly as possible. Most lenders list their |
| Foreclosure is done by various methods and the | | | | properties with local real estate agents who are |
| typical process is approximately 60-70 days long. NH | | | | experienced in marketing and managing these assets. |
| requires a 24 day publication of the sale and there is | | | | When a lender lists a property with a Realtor they do |
| no right of redemption and deficiency judgments are | | | | not like disclosure statements but understand that they |
| permitted. | | | | must conform to federal and state laws. In most |
| In New Hampshire judicial foreclosure is similar to strict | | | | cases, they have no knowledge of the property (items |
| foreclosure in other New England states. A lender | | | | on the disclosure statement) and can make no |
| needs to file a complaint against a borrower and | | | | representations as they have never occupied the |
| obtain a court ruling from the county court. If the court | | | | property. Some banks may provide incentive financing |
| finds a borrower in default, it provides the borrower | | | | on their REOs but in most cases, this would apply only |
| time to pay back the debt. If borrower does not pay | | | | to property that was in very bad condition or difficult to |
| within the allowable time frame, the court orders sale | | | | finance elsewhere. Financial institutions usually sell such |
| of the property. | | | | properties "as-is"; however buyers still have the |
| A non-judicial foreclosure is conducted only when a | | | | opportunity to negotiate home inspections if they find |
| power of sale clause exists in the deed of trust | | | | "unknown material defects.". |
| mortgage. This clause pre-authorizes the sale of a | | | | If a buyer discovers issues that they did not anticipate, |
| property to pay off the balance of the loan in the | | | | and which the institution will not repair, they can then |
| incidence of a buyers default. In such cases, power is | | | | cancel the transaction (given that the home inspection |
| given to the lender or its representative (generally | | | | contingency was included as part of the offer to |
| referred to as a trustee) to sell the property. | | | | purchase contract). Time is money to a lender. As a |
| Always seek the advice of proper legal counsel or an | | | | Seller, they have to determine if it is in their best |
| attorney familiar with New Hampshire foreclosure laws | | | | interests to negotiate repairs or simply discount and sell |
| especially if you are purchasing pre-foreclosure. The | | | | the property it is not in a buyers best interest to |
| information provided in this website is not legal advice. | | | | attempt to renegotiate a contract over trivial items that |
| Bank Owned, REO (Real Estate Owned), and | | | | were disclosed or obvious prior to negotiation of the |
| foreclosure are terms commonly used to describe | | | | contract. |
| properties that are owned by a lender (financial | | | | A bank owned property isn't always the best value for |
| institution; typically a bank), after an unsuccessful sale | | | | a consumer. It's an old myth that "foreclosures" are a |
| at a foreclosure auction. Typically, the lender will then | | | | bargain. As a buyer, you should evaluate the entire |
| resell the property by direct sale or market through a | | | | market and compare all properties in the NH MLS |
| Realtor. Buyers often benefit by purchasing these | | | | meeting your housing needs and price range. Investors, |
| properties as lenders are motivated to dispose of the | | | | however, do take advantage of "distressed" properties |
| asset quickly and aggressively price them to reflect | | | | that are discounted with the idea to "flip" or resell the |
| market conditions. | | | | property after improvements have been made. |
| Purchase at Foreclosure Auction | | | | Making an Offer |
| Prior to the auction, the auctioneer will publish the | | | | Before making an offer, have your agent contact the |
| requirements for bidding. For most consumers, and | | | | listing agent and ask typical questions you would ask |
| specifically a first-time home buyer, purchasing at a | | | | of any seller and some additional ones such as: |
| foreclosure auction is a "risky" transaction and, in most | | | | |
| cases, it is preferable to purchase from the lender | | | | 1. Are there any inspection reports available? |
| after the auction. As a consumer, you do not have | | | | 2. Does the bank have work in progress? |
| adequate access to the property to determine | | | | 3. Are there special forms the lender requires? |
| "unknown material defects". High risk items include a | | | | 4. Has the bank determined a timeline for closing on |
| home with a failed septic system, a contaminated well | | | | the property? |
| or a leaky roof. You must also be aware of all the | | | | 5. How does your agent deliver the offer? Offers are |
| liens on the property and your responsibilities if your bid | | | | usually sent to the bank via email or fax and the listing |
| is accepted at auction. | | | | agent may request your originals. There is no formal |
| Foreclosure auction sales begin with a minimum bid | | | | presentation other than a discussion between the |
| that includes the loan balance, any accrued interest, | | | | lender and the listing agent. Keep in mind: nothing |
| attorneys fees and costs associated with the | | | | happens evenings and weekends (banks are closed). |
| foreclosure process. In most cases the outstanding | | | | The negotiating process can be very frustrating for |
| mortgage balances, liens, etc. exceed the value of the | | | | buyers as the typical timelines do not apply. |
| property. As a result, the first mortgage is the only | | | | Make sure that your offer contains your "credit" |
| bidder and the title will now revert back to this lender. | | | | approval which demonstrates your qualifications as a |
| These properties are referred to as REO (Real Estate | | | | buyer as they are motivated to negotiate with a |
| Owned) or Bank Owned properties. If you are a | | | | qualified buyer. Understand that lenders will sell at "fair" |
| successful bidder, you receive a property in "as in" | | | | market value and do not expect "fire-sales" that you |
| condition and the former owner or tenant could be | | | | have seen on television. |
| living at the property. There may also be other liens | | | | Acceptance |
| against the property. | | | | Once your offer has been negotiated and accepted, |
| REO (Bank Owned) Real Estate | | | | the typical inspection, appraisal and closing process will |
| After a bank (lender) takes possession of a property, | | | | proceed. Title issues will often come up that will delay |
| they will mitigate items owed by the prior borrower, | | | | the closing so make sure your Realtor and other |
| which could include property taxes, homeowner's | | | | parties have the documentation they need. Prior to |
| association fees and contractor liens. The financial | | | | closing, contact the vendors providing utilities and |
| institution will contact the IRS to remove any tax liens | | | | arrange for new accounts in your name and to verify |
| against the property. If the current owners are living at | | | | final billing to the lender. At the closing, you may not |
| the property, they are usually evicted. Repairs and | | | | receive all the keys and garage openers or any |
| maintenance are often performed to make the | | | | appliance information that you would receive in a |
| property more marketable to a potential buyer. | | | | normal transaction. |
| However, the lender may discount the property and | | | | |