Extension News: August 2007 Archives

A non-profit housing specialist relayed this story about a recent house closing in my community. Buyer and lender were ready to sign on the dotted line when the phone rang and the transaction ceased. The mortgage company had stopped processing mortgages. Both parties were left high and dry.

Scenarios like this reflect the harsh reality of the current mortgage-lending market in New Hampshire and across the nation. Individuals and families wanting to buy a home are finding limited opportunities for funding. Some lenders have gone out of business; many others are unable to get enough resources to lend money to prospective homebuyers. Foreclosure numbers are skyrocketing. The American Dream of home ownership is quickly getting out of reach, even for many middle-income families.

If your credit score is considered "good," also called "Tier 1," you qualify for the best rates and deals. If your credit score reflects past problems, companies take a chance in loaning you money, so it will cost you, the borrower, more to get money for a mortgage. Basically, the more you need the loan, the more it will cost you.

If you get a mortgage that can be insured, perhaps by FHA, Fannie Mae or Freddie Mac the company lending the money has a guarantee that if you default on your loan, they still get their money. In the subprime market there are no such guarantees, so lenders take more of a risk. (Subprime mortgages are home loans made to individuals or families who have a credit score of 650 or below.) Therefore it will cost you more to buy a house and failure to pay may mean losing your home and any equity you may have in your house.

Credit guidelines
Consumer groups have been working to reduce the number of loans made in the subprime market. Why? Because buyers with poor credit often realistically can't afford the mortgage.

Guidelines from the U.S. Department of Agriculture's Rural Development agency for mortgage loans at 1 percent interest require that your mortgage payment (principle, interest, taxes and insurance) be no more that 29 percent of your total gross income. In addition, your total debt load, including mortgage, should be no more than 41 percent of your total gross income. If your loan rate is closer to the standard 30-year fixed-rate mortgage now at around 6 percent, the rules allow your mortgage payment to rise to 33 percent of your income, but your total debt load should still be no more than 41 percent.

The subprime market has higher thresholds that allow a buyer's total debt load to rise as high as 50 percent of total income. That leaves subprime borrowers with less than 50 percent of their total gross income to cover payroll deductions, food, clothing, heating costs, gasoline and auto maintenance, phone, electricity and other essentials. You can see how families with subprime mortgages can get into financial trouble quickly.

If your mortgage is adjustable, meaning your payment may be tied to an ever-increasing interest rate, you could see your monthly bill rise every six months. That doesn't take into account an increase in the yearly taxes on your property or your homeowner's insurance.

New Hampshire County Register of Deeds offices across the state report that the number of foreclosures has been increasing. Most counties are on pace to exceed the numbers recorded in 2006, with the busy season ahead of them.

Trouble making mortgage payments?
If you're having trouble making your mortgage payments, there are some steps you should follow to help protect your home investment:

• The Federal Reserve Board has identified resources that can help you when you are having difficulty making your mortgage payment.


• Contact your lender immediately when you run into difficulty. Some may let you set up a different payment plan.


• If you have steadily improved your credit score, consider refinancing with a company that offers a fixed mortgage.


• Consider selling your current home and buying a smaller, more affordable place place. You can pay off the first home and you may be eligible for a better mortgage plan than what you currently have.

You can repair your credit by paying your bills on time and using your available credit carefully. The Federal Trade Commission has a publication Credit Repair: Self-Help May Be the Best http://www.ftc.gov/bcp/conline/pubs/credit/repair.shtm offers more detailed information.

Get any promises in writing. Check with the consumer protection bureau http://doj.nh.gov/consumer/index.html of the state Department of Justice (1-888-468-4454) to see if complaints have been filed against the company you are contemplating doing business with. Proceed cautiously.

UNH Cooperative Extension Educators in each county offer a variety of money management classes to help you manage your money. In addition, we offer educational publications on a variety of consumer money management topics.

By Deb Maes, Family & Consumer Resources Educator

Vegetables, fresh from the garden! It’s that time of year when juicy red tomatoes, succulent corn and other garden delicacies are just bursting with flavor. And while everyone knows the benefits of eating fresh vegetables, for some, fresh vegetables aren’t part of the food budget.

UNH Cooperative Extension Carroll County master gardeners and Extension Educator Tina Savage came up with a plan to supply surplus seasonal vegetables to people who may not otherwise have access to them.

The Veggie Volunteer Program (VVP) began after a visit to the Sherman Farm in East Conway in the fall of 2002. Six years later, it’s still going strong. How did it start? The Shermans operate a large, year-round stand, harvesting fresh vegetables from their 50 acres. With 50 acres of vegetables, there's always some extra, more lettuce than the farm stand can sell, summer squash a bit beyond its prime, tomatoes that would spoil unless picked.

When approached, Sherman Farm generously agreed to donate this nutritious surplus to food pantries, senior centers and other organizations that serve a low income audience, if a collection and distribution process could be developed. That's where UNH Cooperative Extension comes in.

How the VVP works

Volunteers organized by Savage and the master gardeners get together at the Sherman farm to harvest, wash, package and transport the vegetables to food pantries, senior centers, local hospitals, and the County Nursing Home.

The team meets twice a week during the growing season, rain or shine, to pick, weigh, box and deliver vegetables fresh from the field. Master Gardeners and Savage serve as the liaison between the farm and the volunteers, organize the picking crews, record the produce collected and manage the distribution process to insure that everyone gets their share.

The goal of the VVP is "To create and sustain a community-based program whereby surplus garden produce is picked and collected directly from the farm and then distributed to local food pantries and kitchens."

Impressive results

The VVP team keeps daily records of the type and amount of produce collected, where it was distributed and its approximate value. (The value of produce is determined by information published in the Weekly Market Bulletin and is a retail value.) Food pantries and food programs provide feedback as to the quality of produce received, amount received and amount needed as well as average number of people served.

To date this year alone, the VVP has provided approximately 9,296 pounds of fresh vegetables, valued at $15,828.40 to lower-income and elderly people in several Carroll County towns.

Since its inception, the program has delivered 51,054 pounds of vegetables for a total value of $68,543.70.

Everybody wins with the VVP. The Shermans have realized their goal of getting excess produce from their land to people who couldn't afford it otherwise. The VVP volunteers get to serve their community, learn about agriculture with a hands-on approach, meet new people, make new friends, have fun outdoors and earn credit toward club badges and community service requirements.

Recipients and the organizations receive the farm-fresh vegetables free of charge, they can redirect scarce funds to other needs. Most importantly, low-income people have received locally grown, farm fresh vegetables that they may not have had access to otherwise.