It seems like everyday there is a new report about trouble with sub-prime home loans.
Now, the New Hampshire Banking Department is traveling around the state holding counseling sessions for homeowners in trouble.
There’s a concern that people stuck in unaffordable mortgages will not be able to refinance.
New Hampshire Public Radio’s Dan Gorenstein has more.
Sfx: room sound
We’re in a third floor room in Nashua’s City Hall.
Members from the state’s banking department easily outnumber the troubled homeowners here.
There are only two.
The department’s Abby Shane says it’s been hard to publicize the sessions.
But Shane says she believes there’s more to the low turnout than that.
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9:38 we also think that some people are afraid. It’s very difficult to face a reality that may be very painful. And sometimes when people come in and meet with us, they may get a confirmation of what they were already afraid of, and that’s not an experience everyone wants to have.
Shane says the sessions are aimed at people with adjustable rate mortgages- frequently called ARMS, or other non-traditional mortgages.
Department help people run the numbers to see if they can afford to keep their homes.
The Department also will help individuals file complaints against banks or mortgages companies for unscrupulous practices.
According to the latest estimates, some 1800 people will lose their homes in 2007, and another 2000 next year.
Elliott Berry with New Hampshire Legal Assistance says many of those people were seduced by easy credit from companies who didn’t care if borrowers could pay the bills in the long run.
He says many of those homeowners are now in for a rude awakening if they look for help from more traditional lenders.
2:44 ...all those people facing the reset of their ARM mortgages to levels they can’t afford are going to have a terrible time getting refinancing that is going to allow them to hold onto their homes.
New Hampshire Bankers Association President Gerry Little agrees.
9:55 how likely is it that the majority of people who will have to foreclose on their home, being able to refinance with local banks?...I think it will be a minority of folks who are going to have any fundamentals that allows them to refinance.
Little says at the end of the day people just bought too much house.
10:51 at it’s initial introductory rate they were able to deal with it, but just barely, so when things moved from a more normalized rate, it pushes them past their ability to handle the debt.
Little says the sub-prime mortgage market crisis is complex.
He says the problems have threads that run from Main St. to Wall St. and beyond.
Not only were there homebuyers with big dreams...there were also lenders willing to give large amounts of cash to people who couldn’t pay it back.
Little says the state’s housing market will stay cool in the months ahead.
One of the key reasons for that is that the buyers and lenders who helped fuel the market are now about to be out of the game.
For NHPR News, I’m DG.
