Report from the Attorney General - NM Attorney General

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Report from the Attorney General

Monday, February 21, 2011 Report from New Mexico Attorney General Gary K. King...Helping New Mexicans hold on to their mortgages. Full Article

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Annual Report 2009 Despite budgetary constraints, a great deal was accomplished for New Mexico in 2009 by the professionals in the Attorney Generals Office.

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One of the unfortunate results from the depressed economy in New Mexico has been the proliferation of foreclosure rescue scams, mostly from out-of-state companies. To address these frauds, my office proposed legislation in the 2010 Legislative session the Foreclosure Consultant Fraud Act to prevent rescue scams from operating in New Mexico. This new law has successfully prevented these companies from operating in our state. But these remain challenging times for lawmakers and government officials because thousands of New Mexicans are still facing serious

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Report from the Attorney General - NM Attorney General

http://www.nmag.gov/Articles/newsArticle.aspx?ArticleID=1167

troubles with their home mortgages and they need our help. The number of foreclosures has increased significantly in New Mexico as a result of the national mortgage crisis. Many homeowners who were marketed loans with teaser rates, negative amortization or subprime interest rates and terms known as toxic loans- have found themselves unable to maintain their mortgage payments and have been forced into foreclosure. With the depression in the housing market, home prices dropped and homeowners found that they owed more on their mortgage than their home is now worth. The downturn in the economy, causing an increase in unemployment, has put more homeowners at risk of foreclosure and loss of the family home. At the same time, foreclosure rescue scams have targeted homeowners who are enticed to pay a large up front fee by false promises to save the family home. My Consumer Protection Division is providing assistance to homeowners to negotiate loan modifications or loss mitigation alternatives to foreclosure where feasible. As a result of these efforts, many homeowners have completed a loan modification and stopped the loss of their home. Many people have heard about the robo-signers who prepared fraudulent or deficient affidavits for submittal to the courts in foreclosure proceedings. I am currently participating in the multi-state investigation of mortgage servicers and lenders that will address the unfair and deceptive industry practices identified through this investigation. Meanwhile, in this years legislative session, Senator Michael Sanchez is sponsoring SB 406 to enact the Mortgage Fair Foreclosure Act to eliminate the problem faced by homeowners who are trying to complete loan modifications and working with the mortgage servicer only to find out that the lender has filed a court action to foreclose on the home. SB 406, if enacted, requires transparency of information from lenders to homeowners about a claim of default, prior accounting records, available loss mitigation alternatives, and who to contact to try and modify a loan to avoid foreclosure. Also, this bill will assure homeowners a meaningful opportunity for loss mitigation, such as loan modifications, forbearance, a deed in lieu, or other alternatives intended to either preserve homeownership or to avoid the adverse consequences of foreclosure. The provisions of the bill also provide that should loss mitigation be denied, the homeowner shall be provided the reasons for the denial. Loss mitigation efforts must be terminated before the lender files suit for foreclosure. This provision protects homeowners from the problems inherent in the dual track process where a homeowner may be working with the servicer to avoid foreclosure while, at the same time, the lender files the foreclosure suit in court, increasing the risk of losing the home and resulting in increased assessed costs. These and other measures to protect responsible mortgage holders are necessary steps to ensure that the American dream of homeownership is preserved for New Mexicans too. By Gary K. King New Mexico Attorney General ###

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Report from the Attorney General - NM Attorney General

http://www.nmag.gov/Articles/newsArticle.aspx?ArticleID=1167

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