New Hampshire allows for both judicial or in court and non judicial or out of court foreclosures to be followed. As in all states where both types of foreclosures can used, the determining factor in which method will be chosen is whether or no the deed of trust or mortgage contains a power of sale clause. A power of sale clause allows the bank to press forward with the sale of a house without getting a judges approval to do so. This moves the process a long a lot quicker. It also saves the bank the attorney’s fees required to file the opening lawsuit.
The biggest reason for a bank to use judicial foreclosure is because it has no other choice, because there is not a power of sale clause in the deed of trust or mortgage. When this is the case, the process begins with the attorney for the bank filing a complaint against the homeowner who is having difficulty keeping current on their mortgage payments. The bank does this in order to obtain a decree of sale from the court. The court issuing the decree of sale must have jurisdiction in the county where the home is located. When the court declares the home owner to be officially in default, it will give the homeowner a time frame in which to come current on the loan. If the homeowner is not able to come up with the delinquent amount of money on the loan plus other cost like attorney’s fees, the next step is that the court will order the home to be sold at auction.
Anyone can bid for the house at this sale, including the bank itself. This is a bit of a misnomer, as the bank will not pay itself any money to gain ownership to the property. They just take it back. Should this be the banks decision, they must first determine if the amount of the bid is so much lower than what is owed that it makes more sense to them to take on the increased costs of another bank owned property.
I have attended many foreclosure auctions in my state and the vast majority of homes offered there are being taken back by the bank. This is because the opening bid price is just too high for any investor attending the sale to make it worth while for them.
In an out of court or non judicial foreclosure, the power of sale clause may specify the time, date, place and terms of the sale of the home. In such a circumstance these instructions must be followed. Most power of sale clauses are not so detailed however, and that means that most follow the regular process.
That usual process begins with a notice of sale being recorded in the county where the county is located. This same notice of sale must also be mailed to the homeowner no less than 25 days before the scheduled sale date. Additionally, this notice of sale must be advertised in a local news paper that has general circulation in the county where the house is located. This ad must be run once a week for three weeks. The first of this series of ads must be placed in the paper no less than twenty days before the scheduled sale date.
This notice of sale needs to contain the date and time of the sale and a description of the property. It needs to contain a warning to the homeowner that the property is going to be sold. It also needs to explain the homeowners rights with regards to how they can stop the foreclosure sale. The sale is always held on site: at the property being sold.
There are a few special methods of foreclosure allowed in New Hampshire. The first of these is referred to as entry under process. In this method of foreclosure the bank simply takes possession of the empty house and maintains it for one year. This is a long and costly process for the bank, I’m sure they don’t use it very often. There are also two other special methods of foreclosure referred to as entry and publication and possession and publication, they are really just variations on the entry and possession foreclosure method. These two methods of foreclosure also require the bank to have the home on their books for one year. These methods require the publishing of the banks ownership of the property in some specified timeframes.
The only benefit to the bank for using these special methods of foreclosure is that the borrower in these cases retains no right of redemption. When the bank uses these special methods of foreclosure the homeowner has no ability to regain possession of the property.
