A Foreclosure With a Happy Ending?

In the housing market, if you compare the number of homes sold this June to the number sold in the same month a year ago, it’s actually gone up a hair. Of course, in the summer of 2008, the housing market had already been falling for awhile. So you could say, we’ve come up to the level of a depressed market. Sort of. Median home value is still down – off about 11 percent from a year ago.

On the small business lending front, some banks are doing more deals with help from the Small Business Administration. Lou Gavin heads the commercial division at Laconia Savings Bank. Gavin says the drop in real estate values can make some otherwise bankable companies just a little iffy. They don’t have the same collateral to back up a loan. That’s when an SBA guarantee makes a difference.

GUEVIN: So it enhances our ability to make loans where there might be some marginal issues. But we still are, all the banks are still cash flow lenders. I mean, you have to have money to pay back the loans.

Your economic stories are beginning to fill in our clickable map of the NHPR listening area. Jennifer in Concord added this tale of foreclosure that could end up with a silver lining. Jennifer’s friend was renting a nice big Victorian from an absentee landlord. Then one morning, a sign goes up on the front lawn and she learns that in one week, there will be a foreclosure auction and she will need to leave.

JENNIFER: My friend was just blown away. She has an 18 month old kid plus two pre-teenagers, 11, 12. And they’re in the middle of school and she’s being told that she has to find a place to live with her family?

It all seemed very grim, but on the day of the auction, no one came and the bank became the owner. At that point, the house was worth about 70 thousand dollars less than the mortgage. The bank let Jennifer’s friend stay because after all, she was paying rent.

JENNIFER: And it’s a pretty high cost. I mean a 5-bedroom house doesn’t go cheap in Concord.”

Long story short, negotiations are underway and it looks as though Jennifer’s friend will end up getting a house she likes very much for a price she can afford.

We hope you will tell us your stories during these changing economic times. Go to nhpr.org-forward slash workingitout. That’s working it out, all one word.

With this weekly economic round up, I’m Jon Greenberg.