New Hampshire Law, Due Process – The Basics
New Hampshire primarily operates as a title theory state where the title of the property remains trusted until full payment is made for the underlying loan. Confiscation is carried out by various methods and the typical process is about 60-70 days. NH requires 24-day publication of the sale and no redemption rights and shortage assessments are permitted.
In New Hampshire, judicial foreclosures are similar to strict foreclosures in other New England states. The lender needs to file a complaint against the borrower and obtain a court ruling from the district court. If the court finds the borrower defaulted, the court gives the borrower time to repay the debt. If the borrower does not pay within the permitted period, the court orders the sale of the property.
Non-judicial confiscation is only carried out if there is a sales power clause in the trust/mortgage deed. This clause authorizes the sale of the property to pay off the remaining loan if the buyer defaults. In such cases, power is given to the lender or its representative (commonly referred to as the trustee) to sell the property.
Always seek advice from appropriate legal counsel or an attorney who is familiar with New Hampshire foreclosure laws especially if you are buying a pre-foreclosure. The information provided on this website is not legal advice.
Bank Owned, REO (Real Estate Owned), and foreclosure are terms commonly used to describe property owned by a lender (financial institution; usually a bank), following a failed sale at a foreclosure auction. Usually, the lender will then resell the property by direct sale or on the market through a Realtor. Buyers often benefit from buying these properties because lenders are motivated to sell assets quickly and aggressively set prices to reflect market conditions.
Buy at Foreclosure Auction
Prior to the auction, the auctioneer will announce the terms for bidding. For most consumers, and especially first-time homebuyers, buying at a foreclosure auction is a “risky” transaction and, in most cases, better off buying from a lender after the auction. As a consumer, you do not have sufficient access to the property to determine an “unknown material defect”. High-risk items include homes with failed septic systems, contaminated wells or leaky roofs. You should also be aware of all liens on the property and your responsibilities if your bid is accepted at auction.
Foreclosure auction sales begin with a minimum bid that includes the loan balance, accrued interest, attorney’s fees, and costs associated with the foreclosure process. In most cases the balance of the mortgage, lien, etc. exceeds the value of the property. As a result, the first mortgage is the only bidder and title will now return to this lender. These properties are referred to as REO (Real Estate Owned) or Bank Owned properties. If you are a successful bidder, you receive the property in an “as is” condition and the previous owner or tenant can live in the property. There may also be other liens on the property.
REO (Bank Owned) Real Estate
Once the bank (the lender) takes ownership of the property, they will deduct items owed by the previous borrower, which can include property taxes, homeowners association fees and contractor liens. The financial institution will contact the IRS to remove a tax lien on the property. If the current owners live on the property, they are usually evicted. Repairs and maintenance are often carried out to make the property more valuable to potential buyers. However, the lender can discount the property and sell it “as is”.
Banks are not investors or property managers of foreclosed real estate and want to dispose of assets as quickly as possible. Most lenders register their properties with local real estate agents who are experienced in marketing and managing these assets.
When a lender lists a property with a Realtor, they do not like disclosure statements but understand that they must comply with federal and state laws. In most cases, they have no knowledge of the property (the item on the disclosure statement) and cannot make a statement because they have never occupied the property. Some banks may provide incentive financing on their REOs but in most cases, this only applies to properties that are in very poor condition or difficult to finance elsewhere. Financial institutions typically sell such properties “as is”; however buyers still have the opportunity to negotiate a home inspection if they find an “unknown material defect”.
If the buyer encounters a problem that they did not anticipate, and which the institution will not fix, they can then cancel the transaction (given that home inspection contingencies are included as part of the offer-to-buy contract). Time is money for lenders. As Sellers, they must determine whether it is in their best interest to negotiate repairs or simply discount and sell the property, it is not in the buyer’s best interest to try to renegotiate contracts over trivial items disclosed or clear prior to negotiations. of the contract.
Bank-owned properties are not always the best value for consumers. It’s an old myth that “foreclosure” is a bargain. As a buyer, you should evaluate the entire market and compare all properties in NH MLS that meet your housing needs and price range. Investors, however, take advantage of discounted “distressed” properties with the idea of ”flipping” or reselling the property after repairs are made.
Make an Offer
Before making an offer, ask your agent to contact the listing agent and ask the general questions you would ask any seller and some additional questions such as:
- Are there inspection reports available?
- Does the bank have a work in progress?
- Are there special forms that lenders need?
- Has the bank set a deadline for closing the property?
- How does your agent make offers?
Offers are usually sent to the bank by email or fax and the listing agent can ask for your originals. There is no formal presentation other than a discussion between the lender and the listing agent. Keep in mind: nothing happens evenings and weekends (banks closed). The negotiation process can be very frustrating for buyers because the usual schedule doesn’t apply.
Make sure your offer contains your “credit” approval that demonstrates your qualifications as a buyer as they are motivated to negotiate with qualified buyers. Understand that the lender will sell at a “fair” market value and don’t expect the “fire sale” you see on television.
Reception
Once your offer has been negotiated and accepted, the general review, appraisal and closing process will continue. Title issues will often arise which will delay closing so make sure your Realtor and others have the documentation they need. Prior to closing, contact the vendor providing the utility and set up a new account on your behalf and to verify the final charge to the lender. At closing, you may not receive all of the garage locks and unlocks or any tool information that you would receive in a normal transaction.