By ETHAN DEWITT

New Hampshire Bulletin

In the years after COVID arrived, foreclosures in New Hampshire dropped.

That was intentional: The federal government imposed a moratorium preventing lenders from carrying out foreclosures on federally backed mortgages and offered forbearances to allow homeowners to pause their existing payments.

Those programs ended last year. And now, the rate of foreclosures across the country is ticking up.

In New Hampshire, the rate of foreclosure filings on properties has risen 149.72% from mid-year 2021 to mid-year 2023, according to a July 13 report from ATTOM, a property data firm that analyzes filings across the country. Most of that increase has happened in the last year.

Housing experts say the uptick is not surprising. Because many home loans in the United States are connected to a government program, whether through Fannie Mae, Freddie Mac, the U.S. Department of Agriculture, the Federal Housing Administration or the U.S. Department of Veterans Affairs, the lifting of the moratorium last year affected many borrowers, said Stephanie Bray, an attorney for New Hampshire Legal Assistance and the director of the organization’s Foreclosure Relief Project.

“The knowledge was always there that the piper would have to be paid eventually,” Bray said, speaking on the end of the government-led freeze.

And while evictions increased more quickly after rental assistance aid ran out in 2022, foreclosures tend to have slower processing times, meaning the effects of the end of the aid are continuing to emerge.

But the foreclosures are not inevitable, advocates have stressed. New Hampshire is continuing to accept applications to its Housing Assistance Fund, which allows qualifying homeowners to apply for up to thousands of dollars in assistance to help with mortgage payments, property taxes, utilities and other expenses.

Aid workers are hoping more families will apply.

“We help people apply,” Bray said. “We kind of keep the wolf from the door long enough for the application process to do its thing.”

Even with that aid, experts say an increase in foreclosures is likely in the coming years.

For Ben Frost, deputy executive officer at New Hampshire Housing, the state’s housing agency, the increases in the Granite State are not yet worrisome. New Hampshire still has only the 40th-highest foreclosure rate in the country, according to the ATTOM data. And while the number of foreclosure notices at the midpoint of 2023 — 646 — is higher than the same time last year — 494 — it is still not as high as the midpoint of 2019, a year before the pandemic. That point had 741 foreclosure notices.

“If you look at the numbers, they have increased, yes,” Frost said. “But it’s not an alarming increase.”

Still, Frost said, any instance of a family losing their home through foreclosure can be devastating. With a tight rental market and an expensive housing market, finding another home is even harder, he noted.

Selling a house — a common, last-ditch tactic to avoid foreclosure and move elsewhere on a more intentional timeline — is difficult to do in this climate for the same reasons.

“It’s always concerning, because it’s a person’s home, it’s their principal asset and it’s a place of safety and security,” he said. “So foreclosure is always a really traumatic thing for a family to go through.”

And even though the foreclosure process has traditionally been slow, it is speeding up, Bray says. More private investors are purchasing homes at foreclosure than did after the Great Recession, and those buyers are more likely to seek to evict the former owners to make a quick turnaround sale than banks, Bray said.

Bray says that reality is why legal advocates at NHLA are working to help connect families with the existing aid before the foreclosure process can be completed.

The organization has experience helping residents stay in their homes; in 2012 and 2013, its staff worked to fight the wave of foreclosures following the Great Recession. Back then, the primary strategy was to encourage families to apply for loan modifications to help them keep their homes while they rebuilt their finances.

Today, loan modification is still a proven technique, but NHLA has a new tool: the Homeowners Assistance Fund and the thousands of dollars it can provide. Because the foreclosure process is more deliberate, struggling homeowners now have more opportunities to slow things down by securing assistance before a court gets involved.

“Sometimes it’s just getting the money from the program and your clock is restarted, you’re current again, and away you go,” she said.

“We are like the air support that keeps the title in the name of the homeowner and the foreclosure from happening until that process is complete,” she added.

In order to qualify for funding from the Homeowner Assistance Fund, residents must show that they have been “affected in any way” financially by the COVID-19 pandemic. Bray says that requirement can sometimes deter people who aren’t sure they qualify. But more people meet that bar than might realize, she said, and she encouraged people to apply anyway.

Frost also urged people to apply, even if they are unsure:

“People should not self-select themselves out of eligibility. If they have a problem, they should apply, and if they’re not eligible, they’ll get denied. At least they should make the effort to seek this funding.”