New Hampshire Foreclosure Laws
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New Hampshire mainly functions using the title theory wherein the title of the property stays as guaranty till the said loan is paid off in full. Foreclosure under this recourse is non-judicial. A mortgage is the document which keeps the title secured, and no references to deeds of trust are used within the state. Mortgages in New Hampshire are permitted to act as liens on property for judicial foreclosures to take place through courts. The provision of power of sale clauses within the deeds of trust makes this a faster process to bring about foreclosures, therefore making it the most widely used process for foreclosures.
The State of New Hampshire primarily follows the non-judicial foreclosure process to foreclose on properties. No court-action is required in this process but a notice is required. At the initial signing of the mortgage, a power of sale clause is generally inserted in the document, through which a property can be sold by the lender if the borrower defaults on the loan, thereby allowing the lender to take care of the unpaid loan. This being a non-judicial process, some very strict requirements for notices are in place, and a power of sale clause has to be present in the legal loan documents for this process to be followed.
Before foreclosure proceedings are initiated, a notice of sale needs to be recorded by the lender within the county wherein the property is situated and it also needs to be sent to the borrower by mail, a minimum of twenty five days before the sale. A generally circulated newspaper has to be used to publish the notice within the county wherein the property is situated for three successive weeks, once each week. The first of these publications needs to made at least twenty days before the sale.
The notice of sale needs to include within it information such as the sale’s place, time and date, the default’s description, an election-to-sell by the lender and information that is recorded from deeds of trust.
A lender in New Hampshire can choose to follow a judicial foreclosure method through a court, wherein the court issues the final ruling. In the case where no power of sale clause exists in the mortgage, judicial foreclosure must be sought by the lender. The property then sells at a publicly notified sale. The court requires the filing of a complaint in conjunction with a lis pendens (a document that is recorded to provide notice to the public about the foreclosure on the property).
The legal paperwork is generally referred to as a mortgage, and in cases of commercial transactions, a security agreement. The security agreement is, at times, merged with the mortgage. A mortgage can also be filed to authenticate the loan in question and its repayment terms, which find a mention in the note.
It generally takes about 60 to 70 days to bring into effect a non-judicial foreclosure that hasn’t been contested; this does depend on the time required by various notices. If the action is contested in the court by the borrower, if the sale is sought to be postponed, or if bankruptcy is filed for by the borrower, the process can be stalled.
A statutory right of redemption where a borrower can claim the foreclosed property back after the sale by taking care of all relevant payment, does not exist in New Hampshire.
If a foreclosure property sells for lesser than the amount on the loan that is secured by the deed-of-trust or mortgage, a deficiency judgment can be obtained.
Foreclosures in New Hampshire are governed by laws that are part of the Title 38 New Hampshire Revised Statutes, Chapter 479 (Mortgages of Realty). Judicial foreclosures can be referred to in Chapter 479:1-24 while power of foreclosures sale find a mention in 479:25-30.
