TABLE OF CONTENTS

* Mortgage Delinquencies Rise in the Third Quarter of 2006

* It's been a Cold Year for Real Estate

* Preserving New Hampshire's Economic Health and Quality of Life

* People and Places

* NH Banking Department and Its Guidance on Nontraditional Mortgage Products

* Annual Joint Mortgage Conference:  Embracing Change / Realizing Opportunity

* Holiday Party Draws a Crowd

* Mortgage Banking Fundamentals Educates New to Industry

* Programs Scheduled

Mortgage Delinquencies Rise in the Third Quarter of 2006

Manchester, NH (December 19, 2006) - The delinquency rate from mortgage loans on one- to four- unit residential properties in New Hampshire increased, while the percentage of mortgages in the foreclosure process rose in the 3rd quarter of 2006.

The delinquency rate for loans on one- to four-unit residential properties in New Hampshire rose 43 basis points to 3.89 percent during the third quarter.  The percentage of loans in which foreclosure was started during the quarter rose 5 basis points to 36 percent, while the percentage of loans in the foreclosure process at the end of the quarter rose 16 basis points to 0.66 percent.

The delinquency rate varied for each of the four loans types during the third quarter.  The rate of prime loans was 2.29 percent, up 31 basis points from the previous quarter, the rate of subprime loans was 12.89 percent, up 114 basis points from the previous quarter and the rates for FHA and VA loans were 11.27 percent and 6.31 percent - up 137 for FHA loans and up 54 basis points for VA loans.

The inventory of loans in the foreclosure process in New Hampshire at the end of the quarter varied by loan type as well.  The percentage of prime loans in foreclosure increased 6 basis points to 0.28 percent, the percentage of subprime loans in foreclosure increased 79 basis points to 3.04 percent, and the percentage of FHA loans in foreclosure increased 31 basis pints to 1.31 percent.  The percentage of VA loans in foreclosure decreased 3 basis points to 0.62 percent.

On a national level, the delinquency rate on one- to four-unit residential properties was 4.67 in the third quarter, up 28 basis points from the last quarter.  The percentage of loans in which foreclosure was started during the quarter rose 3 basis points to 0.46 percent, while the percentage of loans in the foreclosure at the end of the quarter rose 6 basis points to 1.05 percent.  Note:  The national delinquency rate and percentage of foreclosures started are seasonally adjusted  numbers.  The state-level information quoted is not seasonally adjusted.

The above data was obtained in cooperation with the Mortgage Bankers Association of America (MBA) which produces the National Delinquency Survey (NDS).  The NDS, which has been conducted since 1953, covers more than 39 million loans on one-to-four-unit residential properties, representing about 80 percent of all "first-lien" residential mortgage loans outstanding in the United States.  Loans surveyed were reported by approximately 140 lenders, including mortgage bankers, commercial banks, and thrifts.

It's been a Cold Year for Real Estate

by Peter Francese who is the Demographic Advisor to the New Hampshire Association of REALTORS®.

November may have seemed warmer than usual here in New Hampshire, but there's a deep chill in real estate. Three of my neighbors perfectly illustrate how the sales statistics, unpleasant as they are, do not completely reflect just how hard this market shift has been on Realtors.

Each of these three neighbors has put his or her house up for sale in the past year. There have been several open houses and dozens of showings, at no small cost to the Realtors involved.  But none have sold, and now all three properties have been taken off the market.  In at least one case, the reason was an unrealistic price expectation.

None of these "No Sale" examples will show up in the statewide data, nor are the hundreds of unpaid hours the Realtors spent recorded anywhere. Such are the limitations of real estate information systems we have.

What the data from the Northern New England Real Estate Network (NNEREN) and the New Hampshire Housing Finance Authority (NHHFA) does show is that when homes have sold, the average price was virtually the same as it was a year ago. But the number of homes sold is down significantly.

During the first 10 months of 2006, according to NNEREN, the average residential sale price, not including condominiums, was $309,000, which was only $1,000 less than during the same period last year. But the number of units sold dropped 19 percent, from just over 14,000 to under 11,400, and sales volume fell by over $800 million.

Condominium sales did not fare much better. The average sale price during the first 10 months of 2006 was $207,000, down just 3 percent from the $201,000 during the same period last year. But the number of units sold fell 18 percent, from 5,000 to about 4,200, and sales volume dropped by about $160 million.

When 2006 is finally over, residential sales volume in New Hampshire will be at least a billion dollars below last year.  That�s damn cold.

The question is:  What about next year?  Next year's sales may be better, but it will depend to some extent on an increase of jobs in our region (which have had virtually no growth in the past six months) and a continuing desire of Baby Boomers to own two or more homes.

We may be in a situation where the lack of affordable workforce housing is having a significant impact on the ability of employers to find workers.  This suggests that perhaps the prevalence of growth moratoriums in New Hampshire towns is having a negative effect on our workforce growth.

As the table below shows, residential home sales, excluding condominiums, declined in every county for the first 10 months of this year versus last year. The average sale price rose in half the counties, but was flat or declining elsewhere.

The Real Estate Market Trends newsletter is provided for the benefit of the members of the New Hampshire Association of REALTORS®, Inc.  ©Copyright 2006 New Hampshire Association of REALTORS®, Inc.  All Rights Reserved.

The New Hampshire Housing and Conservation Planning Program:  To Preserve New Hampshire's Economic Health and Quality of Life

New Hampshire is growing and developing rapidly and this trend is expected to continue for the foreseeable future.  The manner in which the state has grown, particularly with the emphasis on large-lot, high-cost residential development, has resulted in a serious shortage of housing opportunities for working families and young adults.

This trend is hurting our economy by limiting the available workforce.  The same development trends have also rapidly increased the destruction of natural resources and traffic congestion on our roads.  New Hampshire's communities need to plan for future growth in a way that protects our economic health, housing affordability, high quality of life, and natural resources.  The state of New Hampshire needs to provide leadership and support to local communities to assist with that task.

In the summer of 2005, the state's major housing, business, municipal, and conservation groups began meeting to find a way out of this dilemma.  Through almost a year of intense work, they developed an incentive-based program that can give communities the ability to treat housing development, economic planning, and conservation as part of a unified planning strategy and not, as is so often the case, as competing and seemingly-irreconcilable goals.

The program, called The New Hampshire and Conservation Planning Program, would provide municipalities with incentives to plan for future housing growth needs, including the need for affordable and higher density workforce housing, while preserving their quality of life, using land efficiently and identifying key natural areas to preserve.

The program would require an appropriation of about $600,000 a year from the state's General Fund.

At the MBBA-NH October 2006 monthly board meeting, the board of governors unanimously endorsed this program.  For more information on the program, please click here.

The following business, conservation, housing, municipal and planning interests support the program:
 

People and Places

GB Joe is on the go!  Joe Saylor of GB Home Equity has been promoted to New England Sales Manager of VT, ME, NH, MA, RI, and upstate New York.  You can reach Joe at (603) 398-2203.  Congratulations!

New Hampshire Banking Department Adopts Regulatory Guidance on Nontraditional Mortgage Products

Bank Commissioner Peter Hildreth announced the adoption of a set of regulatory guidelines covering the marketing of "nontraditional" mortgages by state-licensed mortgage bankers and brokers.  "Nontraditional" or "alternative" mortgages, include "interest-only" mortgages and "payment option" adjustable-rate mortgages.

Commissioner Hildreth said, "These guidelines are designed to level the playing field in the mortgage market in order to protect consumers from taking on high-risk mortgages without having a full understanding of the terms of such loans."

Nontraditional mortgage products are of particular concern because of the lack of principal amortization and the potential for negative amortization.

The guidance, which the commissioner will adopt by order, requires mortgage bankers and brokers to analyze a borrower's repayment capacity, including an evaluation of the borrower's ability to repay the debt by final maturity at the fully indexed rate, assuming a fully amortizing repayment schedule.

Commissioner Hildreth stated, "We want to work with mortgage bankers and brokers to ensure that the mortgage products offered to consumers are suitable and specifically tailored to each individual borrower."

The guidance was developed by the Counsel of State Bank Supervisors (CSBS) and American Association of Residential Mortgage Regulators (AARMR).  This CSBS/AARMR guidance parallels the final guidance released by the Office of the Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation, the Office of Thrift Supervision, and the National Credit Union Administration.

Please click here for a copy of the Guidance on Nontraditional Mortgage Products.

For more information, please contact the New Hampshire Banking Department at (603) 271-3561.

Annual Joint Mortgage Conference:  Embracing Change / Realizing Opportunity

The 2007 Annual Joint Mortgage Conference is poised to offer even more than last year:  expanded programs for loan officers (attend two sales presentations and a marketplace reception for $20), increased number of exhibitors, more time devoted to topics for in depth discussions, and lots of networking opportunities with mortgage industry professionals from the surrounding New England states.

The theme of the conference, "Embracing Change / Realizing Opportunity," reflects today's normalizing real estate market, compared to record levels of production not too long ago.  Conference sessions will offer you great ideas to get you thinking about what you need to do to change with the times and seize new opportunities.

Conference topics include:

Don't miss the fun at Tuesday's exhibitor marketplace reception.  There'll be an eclectic mix of exhibitors with the majority being related to the mortgage finance industry, live acoustic music by "One Fine Mess," a bountiful selection of carving stations, appetizers, cash bar, prizes, and more!  Sign up today to ensure your attendance at the conference, an event you won't want to miss!

Please click here for sponsorship/exhibitor information and to register for the conference.

MBBA-NH's Holiday Party Draws a Crowd

This year's holiday party on Wednesday, December 13, 2006, at the Manchester Country Club in Bedford, New Hampshire, drew over 200 members!  It seemed like almost everyone from the New Hampshire mortgage finance industry was there celebrating the holiday season with their friends and colleagues.

Lots of partygoers brought their unwrapped toy to donate to the United States Marine Corps' "Toys for Tots" campaign.  The entrance hall of the Manchester Country Club was overflowing with bicycles, stuffed animals, board games, footballs, dolls, etc.  The Marines collected the toys to distribute to needy families throughout New Hampshire.

The partygoers also expanded their cheer by purchasing raffle tickets for a 50/50 raffle.  Fifty percent of the proceeds went to the MBBA-NH's college scholarship program.  The other 50 percent went to the holder of the winning ticket.  The lucky winner of the 50/50 raffle was Ryan Fay of Popular Financial Services.  Ryan's smile never faded for the rest of the evening; he won over $200 in cash and the scholarship was able to raise the same.  Thank you to everyone who generously donated a toy and bought a raffle ticket.

We are very grateful to our holiday party sponsors.  Their contribution helps to keep the cost to attend the party affordable. 

The following is a list of our holiday party sponsors:

Apple Mortgage LLC
Bank of America
Chicago Title Insurance
LandAmerica
Merrimack Mortgage Company, Inc.
Silver Hill Financial

We would also like to take this opportunity to express a special "Thank You" to our Preferred Corporate Partners for their support throughout the year, which helps us to maintain a high standard of educational programs and social events.  Please click here for more information on the Preferred Corporate Partners.

Course 1:  Mortgage Banking Fundamentals Educates             New to Industry

Each fall the MBBA-NH offers its Course 1:  Mortgage Banking Fundamentals for members and non-members who are new to the industry.  This six week course meets each week and focuses on the mortgage application, understanding the credit report, products and pricing, underwriting, closings, appraisals, post closing, and mortgage fraud.  At the end of the course each student must pass a take home exam, and, only after they pass the exam, can they receive a certificate of completion.

We are pleased to acknowledge and congratulate the following students who successfully completed the requirements of Course 1: Robin Bettencourt of Cousins Home Lending, Kathy Aubut Decelles of Laconia Savings Bank, Matthew Frederickson of Downeast Mortgage, Teresa Henry of Laconia Savings Bank, Meredith Horton of Laconia Savings Bank, Michelle Johnson of Hampshire First Bank, Quincy Knight of Lake Sunapee Bank, Noreen Latulippe of First Horizon Home Loans, Natalie Mantz of Lake Sunapee Bank, Tim Mullen of Bellwether Community Credit Union, Amanda Ohlinger of TriCity Mortgage, Linda Parker of Lake Sunapee Bank, Stephanie Pigott of Laconia Savings Bank, Sandra Aviles Rodriguez of TriCity Mortgage, William D. Rouland of Equity America Mortgage Services, and Stephanie Welsh of CTX Mortgage.

The Course 1 instructors are experienced mortgage finance professionals who volunteer their time and share their knowledge; we thank them for their support:  Gladys White of Downeast Mortgage, Gary Coffin of Horizon Settlement Services, Kristine Simard of CBC Innovis, Ralph Coppola of American Home Mortgage, Susan Dagoumas of Laconia Savings Bank, Doreen White of Old Republic Title, Holly Pointer of Republic Mortgage Insurance Company (RMIC), Mark Chalifour of Merrrimack Title Company, and P. Ben Niles of Freddie Mac.

In early spring the MBBA-NH will be offering Course 2:  Mortgage Banking Fundamentals to individuals who have at least one year of mortgage banking experience.  A sampling of course topics include:  introduction to FHA, VA, and Rural Housing; condominiums; Desktop Underwriter (DU) and Loan Prospector (LP); tax returns and qualifying the self-employed borrower; sales and marking with technology; time management; public speaking; laws that affect the mortgage banking/broker industry; and New Hampshire economic update.  Please look for the registration form by email and mail in February 2007.

Programs Scheduled

Tuesday, January 16, 2007 - Network at Night from 5:30 P.M. to 7:30 P.M. at Wally and Bernie's, 20 Old Granite Street, Manchester, New Hampshire.  Please click here to register and for more information.

Wednesday, January 17, 2006 - Federal and state legislative update at the Manchester Country Club, 180 South River Road, Bedford New Hampshire, from 9 A.M. to 10:30 A.M.  Registration and continental breakfast from 8:30 A.M. to 9 A.M.  Please click here for more information.

Tuesday, February 13, through Wednesday, February 14, 2007 -  Annual Joint Mortgage Conference at the Radisson Hotel, Center of New Hampshire, Manchester.  National sales trainer, cocktail reception with exhibitors, fraud prevention, economic update, compliance, etc.  Please click here for more information.