More N.H. homes ‘underwater,’ report says

The number of “underwater” homes in New Hampshire has risen more than 8 percent over the last year.A home is considered underwater when the amount owed on the mortgage exceeds the value of the property. As of the end of June, nearly one-fifth, or 19 percent, of all the residential mortgaged properties in the state were underwater, an 8.1 percent increase from the same period last year.The report, issued quarterly by analytics and business services firm CoreLogic, found that the Granite State had 41,723 underwater homes in the second quarter 2011, compared with 38,587 in the same quarter of 2010.Over the same period, the percentage of homes that were nearly in negative equity — defined as those whose borrowers had less than 5 percent home equity — declined slightly, from 5.6 percent last June to 5.5 percent this June, or 12,056 properties.Elsewhere in New England, Rhode Island had a rate of 21.5 percent, Massachusetts 15.7 percent and Connecticut 13.1 percent. Figures were not available for Vermont or Maine.While the percentage of underwater homes in New Hampshire is several percentage points below the national average, the state’s rate of negative equity homes has risen over the past year while the country’s rate has dropped.Nationally, 22.5 percent — or 10.9 million residential properties — were in negative equity in the second quarter of 2011, a dip from the 23 percent in the same quarter of the previous year.”High negative equity is holding back refinancing and sales activity and is a major impediment to the housing market recovery,” said Mark Fleming, CoreLogic’s chief economist. “The hardest-hit markets have improved over the last year,primarily as a result of foreclosures, but nationally, the level of mortgage debt remains high relative to home prices.” — KATHLEEN CALLAHANsidebarN.H. foreclosures fall in JulyThere were 30 percent fewer foreclosures in July of this year than in the same month last year, according to the New Hampshire Housing Finance Authority.Some 238 foreclosure deeds were recorded in the state in July 2011, which was a 31 percent drop from the 346 foreclosures that were recorded in July 2010. It’s also a significant improvement from the previous month, which saw 343 foreclosures.Year to date, there have been nearly 8 percent fewer foreclosures recorded than in the same period last year.”Most delinquency and foreclosure indicators show improvement this month,” said the authority. “This could mean that we’re beginning to trend toward recovery in the housing market.”Still, the authority was quick to point out that any improvement is highly dependent on general economic conditions, and that further economic setbacks — like an increase in unemployment — would have a negative effect on delinquencies.In the second quarter 2011, mortgage delinquency rates in New Hampshire increased to 7.1 percent. Still, that’s one percentage point lower than the U.S. average and lower than four of the five other New England states.The authority warned that the overall recovery could be slowed since lenders have allowed the period of delinquency prior to foreclosure to extend — in part due to delays in document processing and in part in hopes that the market will improve.”These conditions set the stage for a protracted period during which significant numbers of foreclosed and distressed properties will negatively influence the housing market, slowing its overall recovery.”Foreclosure auction notices — which indicate the number of households that have fallen seriously behind in mortgage payments — also saw a decline to 539 in July from 621 in the prior month.The authority said the decline could be indicative of future improvements in the number of foreclosure deeds, but could also possibly be a result of delays in document processing. — KATHLEEN CALLAHAN