New Hampshire Foreclosure Laws

Answers

How are trust deeds or mortgage liens treated in New Hampshire?

New Hampshire primarily operates as a title theory state where the property title remains in trust until payment in full occurs for the underlying loan. Foreclosure is a non-judicial remedy under this theory. The document that secures the title is usually called a mortgage and reference to deed of trust is not used in New Hampshire. New Hampshire law also permits mortgages to serve as liens upon real property and for judicial foreclosures to occur through the courts. Because the power of sale provisions in deeds of trust is a faster mechanism to effectuate foreclosure, this is the primary vehicle to foreclose.

How are New Hampshire mortgages foreclosed?

The primary method of foreclosure in New Hampshire involves what is known as non-judicial foreclosure. This type of foreclosure does not involve court action but requires notice. When the mortgage is initially signed it will usually contain a provision called a power of sale clause which upon default allows a lender to sell the property in order to satisfy the underlying defaulted loan.  Because this is a non-judicial remedy there are very stringent notice requirements and the legal documents are required to contain the power of sale language in order to use this type of foreclosure method.

Power of Sale Notice Requirements:

1. Prior to initiating a foreclosure the lender must file a notice of sale which must be recorded in the county where the property is located and also mailed to the borrower at least twenty-five (25) days prior to the sale. A copy of the notice must then be published at least once a week for three (3) consecutive weeks in a newspaper of general circulation in the county in which the property is located with the first publication made not less than twenty (20) days before the sale.
2. A notice of sale as described above must contain certain information including the date, time and place of sale, a description of the default, the lenders election to sell and the recording information from the deed of trust.

In New Hampshire, the lenders can also go to court in what is known as a judicial foreclosure proceeding where the court must issue a final judgment of foreclosure. If the mortgage does not contain the power of sale language, the lender must seek judicial foreclosure. The property is then sold as part of a publicly noticed sale. A complaint is filed in court along with what is known a lis pendens. A lis pendens is a recorded document that provides public notice that the property is being foreclosed upon.

What are the legal instruments that establish a New Hampshire mortgage?

The documents are known as the mortgage, and in a commercial transaction, a security agreement. Sometimes the mortgage document is combined with the security agreement.  Alternatively, a mortgage is filed to evidence the underlying debt and terms of repayment, which is set forth in the note.

How long does it take to foreclose a property in New Hampshire?

Depending on the timing of the various required notices, it usually takes approximately 60-70 days to effectuate an uncontested non-judicial foreclosure. This process may be delayed if the borrower contests the action in court, seeks delays and postponements of sales, or files for bankruptcy.

Is there a right of redemption in New Hampshire?

No. New Hampshire has no post-sale statutory right of redemption for foreclosures, which would allow a party whose property has been foreclosed to reclaim that property.

Are deficiency judgments permitted in New Hampshire?

Yes. A deficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the loan amount which the underlying mortgage or deed of trust secures.

What statutes govern New Hampshire foreclosures?

The laws that govern New Hampshire foreclosures are found in Title 38 New Hampshire Revised Statutes, Chapter 479 (Mortgages of Realty). Judicial foreclosures are referenced in Chapter 479:1-24, and power of sale foreclosures are referenced in Chapter 479:25-30.