As used in the Mortgage Foreclosure Consultant Fraud Prevention Act:
A. "compensation" means monetary payment, remuneration or other benefits received, including monetary donations made in conjunction with the performance of services;
B. "foreclosure consultant":
(1) means a person who, directly or indirectly, makes a solicitation or offer to an owner to perform services for compensation or who, for compensation, performs a service that the person represents will:
(a) stop or postpone a foreclosure sale;
(b) obtain any forbearance from a beneficiary or mortgagee;
(c) assist the owner to exercise the right to reinstatement;
(d) obtain an extension of the period within which the owner may reinstate the owner's obligation;
(e) obtain a waiver of an acceleration clause contained in a promissory note, deed of trust or contract secured by a mortgage on a residence in foreclosure or contained in the mortgage;
(f) assist an owner in foreclosure or loan default to obtain a loan or advance of funds;
(g) avoid or ameliorate the impairment of an owner's credit resulting from the recording of a notice of default or from a foreclosure sale; or
(h) otherwise save an owner's residence from foreclosure; and
(2) does not include:
(a) a person licensed to practice law in this state when the person renders service in the course of the person's practice as an attorney;
(b) a person licensed as a real estate broker or salesperson in this state when the person engages in acts requiring real estate licensure, unless the person is offering services designed to, or purportedly designed to, enable the owner to retain possession of the residence in foreclosure;
(c) a person licensed as an accountant in this state when the person is acting in any capacity for which the person is licensed as an accountant;
(d) a person acting under the express authority or written approval of the United States department of housing and urban development or other department or agency of the United States or this state to provide services;
(e) a person who holds or is owed an obligation secured by a lien on any residence in foreclosure when the person performs services in connection with the obligation or lien if the obligation or lien did not arise as the result of or as part of a proposed foreclosure reconveyance;
(f) a person doing business under any law of this state or of the United States relating to banks, trust companies, savings and loan associations, industrial loan and thrift companies, regulated lenders, credit unions or insurance companies, or a mortgagee that is a United States department of housing and urban development-approved mortgagee or any subsidiary or affiliate of these persons, or any agent or employee of these persons while engaged in the business of these persons;
(g) a person licensed as a residential mortgage originator or servicer pursuant to the New Mexico Mortgage Loan Originator Licensing Act [58-21B-1 to 58-21B-24 NMSA 1978] when acting under the authority of that license;
(h) a nonprofit agency or organization registered pursuant to New Mexico law that offers counseling or advice to an owner of a home in foreclosure or loan default if the nonprofit agency or organization does not contract for services with for-profit lenders or foreclosure purchasers; or
(i) a foreclosure purchaser, including a person who purchases a home in foreclosure at, or subsequent to, a judicial sale of foreclosure property;
C. "foreclosure reconveyance" means a transaction involving:
(1) the transfer of title to real property by a foreclosed homeowner during a foreclosure proceeding on that homeowner's home, either by transfer of interest from the foreclosed homeowner or by creation of a mortgage or other lien or encumbrance during the foreclosure process that allows the acquirer to obtain title to the property by redeeming the property as a junior lienholder;
(2) the subsequent conveyance, or offer or promise of a subsequent conveyance, of an interest back to the foreclosed homeowner by the acquirer or a person acting in participation with the acquirer that allows the foreclosed homeowner to possess either the residence in foreclosure or any other real property, which interest includes, but is not limited to, an interest in a contract for deed, purchase agreement, option to purchase or lease; or
(3) the authorization, solicitation or offer of a proposal to refinance the real estate during the foreclosure process contingent on participation in any life, term life or periodic insurance arrangement with any third party not providing private mortgage insurance;
D. "owner" means the record owner of a residence in foreclosure at the time a foreclosure notice of pendency was recorded or a summons and complaint for foreclosure was served;
E. "person" means an individual, a partnership, a corporation, a limited liability company, an association or other group, however organized;
F. "residence in foreclosure" means residential real property consisting of one to four family dwelling units, one of which the owner occupies as the owner's principal place of residence, where there is a delinquency or default on any loan payment or debt secured by or attached to the residential real property, including contract for deed payments; and
G. "service" means and includes, but is not limited to, any of the following:
(1) debt, budget or financial counseling of any type;
(2) receiving money for the purpose of distributing it to creditors in payment or partial payment of an obligation secured by a lien on a residence in foreclosure;
(3) contacting creditors on behalf of an owner;
(4) arranging or attempting to arrange for an extension of the period within which the owner of a residence in foreclosure may cure the owner's default and reinstate the owner's obligation;
(5) arranging or attempting to arrange for a delay or postponement of the time of sale of the residence in foreclosure;
(6) advising the filing of any document or assisting in any manner in the preparation of any document for filing with a bankruptcy court; or
(7) giving advice, explanation or instruction to an owner, which in any manner relates to the cure of a default in or the reinstatement of an obligation secured by a lien on the residence in foreclosure, the full satisfaction of that obligation, or the postponement or avoidance of a sale of a residence in foreclosure, pursuant to a power of sale contained in a mortgage.
History: Laws 2010, ch. 58, § 2.
Effective dates. — Laws 2010, ch. 58 contained no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, was effective May 19, 2010, 90 days after the adjournment of the legislature.
Severability. — Laws 2010, ch. 58 § 9 provided if any provision of the Mortgage Foreclosure Consultant Fraud Prevention Act or the application of any of its provisions to any person or circumstance is held to be unconstitutional and void, the remainder of the Mortgage Foreclosure Consultant Fraud Prevention Act remains valid.
Law firm and individual attorneys were liable for violations of the Mortgage Foreclosure Consultant Fraud Prevention Act. — Where the state of New Mexico brought an action against certain California law firms and individual lawyers, alleging defendants violated the Mortgage Foreclosure Consultant Fraud Prevention Act (MFCFPA), §§ 47-15-1 through 47-15-8 NMSA 1978, and where it was established at trial that defendants performed or offered to perform services, such as obtaining a loan modification or reducing loan payments, that they claimed they would save a home from foreclosure for individuals who entered foreclosure services, and that through their fee agreements, defendants accepted advance payment for mortgage foreclosure relief and consultant services, defendants' activities satisfied the MFCFPA's requirements that, to be a foreclosure consultant, a person or an entity provide services to a homeowner to delay or postpone foreclosure sales through litigation, defendants' conduct violated the MFCFPA because it is a violation for a foreclosure consultant to claim, demand, charge collect or receive any compensation until after the foreclosure consultant has fully performed every service the foreclosure consultant contracted to perform or represented the consultant would perform, and defendants' fee agreements did not comply with several of the warnings, notices, and disclosures required by the MFCFPA regarding foreclosure consultant contracts. Moreover, the MFCFPA's attorney exemption did not apply because defendants were not licensed in New Mexico as required by § 47-15-2(B)(2)(a) NMSA 1978. New Mexico ex rel. Balderas v. Real Estate Law Center, PC, 430 F. Supp. 3d 761 (D. N.M. 2019).
Accepting advance payment for mortgage foreclosure relief is a violation of the Mortgage Foreclosure Consultant Fraud Prevention Act. — Where the state of New Mexico (plaintiff) brought an action against two attorneys and the mortgage assistance company they owned, alleging defendants violated the Mortgage Foreclosure Consultant Fraud Prevention Act (MFCFPA), §§ 47-15-1 through 47-15-8 NMSA 1978, by accepting advance payment for mortgage foreclosure relief and consultant services, and where defendants moved for summary judgment, arguing that plaintiff cannot show that defendants were foreclosure consultants or that defendants provided mortgage relief services, and, as attorneys, they were exempt from the reach of the MFCFPA, summary judgment was not appropriate, because the MFCFPA's attorney exemption did not apply because defendants were not licensed in New Mexico as required by § 47-15-2(B)(2)(a), and there were genuine issue of material fact where plaintiff presented evidence that defendants offered clients help with preventing foreclosure and modifying their mortgages, that defendants received compensation before they fully performed every service they contracted to perform or represented that they would perform, and that defendants' fee agreement did not comply with several of the warnings, notices, and disclosures required by § 47-15-3 NMSA 1978. New Mexico ex rel. Balderas v. Real Estate Law Center, PC, 401 F. Supp.3d 1229 (D. N.M. 2019).
Structure 2021 New Mexico Statutes