NM Homeowners Receive Help on Mortgage Debt

April 9, 2012

Mortgage Debt

The halls and classrooms at the University of New Mexico School of Law were abuzz for a few days during spring break, but the people going in and out of them were not law students heading to class. Instead, they were New Mexico citizens seeking and receiving assistance to their questions about their own mortgage debt.

In a first-of-its-kind event in New Mexico, the four-day Helping New Mexico Homeowners weekend provided, at no cost to homeowners, detailed information about financial literacy, foreclosure basics and possible solutions to avoid foreclosure to anyone who walked in the door. By the time the event had ended on March 18, more than 250 people had been served.

A confusing issue
Leading the student volunteers was Sophie Martin (`13), who became interested in the foreclosure problem during a 2011 summer internship with Brian Thomas (`97), a lawyer whose Albuquerque practice includes foreclosures. It was Thomas’ idea to put together the homeowners weekend, which brought to the UNM law school staff from five banks, housing counselors from across New Mexico and lawyers.

Martin first became interested in mortgage issues and the law when she provided marketing services for Realtors in Santa Fe in the late 1990s. “I had to become a Realtor in order to do their marketing, and I enjoyed seeing the contract process,” she said. “There was just enough law in the Realtor classes that made it fascinating. And then, when the recession hit, I was struck by the explosion of foreclosures that has followed.”

Mortgage Debt
A mortgage counselor from Bank of Albuquerque prepares for the day.

In New Mexico, about 9,000 people have gone through foreclosures in each of the past few years and about 17,000 mortgages are currently delinquent, according to the New Mexico Attorney General’s Office.

“Reports indi­cate that as many as 85 per­cent of New Mex­ico home­own­ers lose their homes by default because they never respond to the foreclosure complaint,” said UNM School of Law Professor Nathalie Martin, no relation to Sophie. “Foreclosure is a confusing and emotional situation under the best of circumstances, and too many people either are just giving up or are trying to navigate the process with­out any help. As a result, families are losing their homes when they might be able to keep them.”

Professor Martin, whose academic focus includes financial literacy and bankruptcy, was also instrumental in putting together this event, which resulted in real-world help for homeowners. For the past few years, she has been collaborating with a small group of Albuquerque lawyers, including Thomas, on foreclosure issues.

Finding a solution
The event began on Thursday, March 15, during which classes for lawyers, hous­ing pro­fes­sion­als and the gen­eral pub­lic took place. UNM law students taught an initial overview class required of all participants. On Fri­day through Sun­day, HUD-certified hous­ing coun­selors, con­sumer edu­ca­tors and bankers met with the individual homeowners.

Participating banks were Bank of America, Wells Fargo, Citimortgage, Chase and Bank of Albuquerque/Oklahoma. Unlike similar events across the country, at the Albuquerque event the banks’ mortgage counselors were qualified to make on-the-spot decisions for the homeowners.

 In addition to helping homeowners, students gained valuable experience. “In just over a weekend I learned so much about how foreclosure works, mostly from the people going through it who have been forced to become experts,” said Sophie Martin.

Beyond Rewarding
Thomas, who took his first foreclosure case 10 years ago and now handles about 50 such cases a year, was pleased with the results of the weekend event, which included a number of loan modifications.

Mortgage Debt

“The banks we spoke to as we closed down emphasized that they hoped we would do it again,” he said. “We hope to do exactly that, and hope that the School of Law will continue to be part of the solution. Next time, I expect that we will aim bigger – for more banks and more participation with more detailed solicitation in advance by the lenders. Bigger, in this instance, is better, especially if we are able to educate the public about their legal rights and to help them save their homes.”

For Sophie Martin, the experience was beyond rewarding. In addition to assisting with all aspects of organizing the weekend, including coordinating a group of five student volunteers, she built a website, which received high praise from the participating bankers. The website will continue to be updated and serve as an ongoing resource for homeowners.

“From the student perspective, this was a reminder the even when we are in practice, it is important to give back,” she said. “The law school has been trying to teach us that being a lawyer is not just a life of profit, but it’s also a life of service.”