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February 2, 2011
Foreclosed Homeowners Go to Court onTheir Own
ALBUQUERQUE — Saving your home from foreclosure is increasingly a do-it-yourself project.Lawyers are scarce and free legal assistance is overwhelmed in New Mexico, so a community center here is offering an hourlong class in how to download the correct forms, decipher thelingo and mount a defense, however tentative and primitive, against a multibillion-dollar bank.“I don’t see success for someone like me who doesn’t understand the law,” said Skylar Perea, asenior care aide who fell behind on her payments during the eight months she was out of a job.“But it’s better than nothing.”In New Mexico, New York, Florida and the 20 other states where foreclosures require a judge’sapproval, homeowners in default have traditionally surrendered their homes without evercoming to court to defend themselves. (In the 27 other states, including California, Nevada and Arizona, homeowners have a much harder time contesting a foreclosure even if they want to.)That passivity has begun to recede. While many foreclosures are still unopposed, courts areseeing a sharp rise in cases where defendants show up representing themselves.One factor driving the increase is the changing nature of foreclosure. When people went into default in 2008, it was generally because of the exploding cost of asubprime loan. Unable or unwilling to handle sharply higher payments, the homeowner walkedaway with little protest.Now many defaults are prompted by stretches of unemployment like Ms. Perea’s. Theseowners do not have the resources to come up with all their missed payments at once. But if they can persuade their lender to restructure the loan instead of seizing the house, they have achance of staying put.In New Mexico, this is where the hourlong workshops come in. “When you cannot pay, this iscalled ‘a breach of contract,’ ” Angelica Anaya Allen, director of the nonprofit Fair Lending
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