New Mexico Mortgage Relief: Options for Homeowners

Your First Step Towards Stability

Falling behind on mortgage payments is a deeply stressful experience for any homeowner. The uncertainty and fear of foreclosure can be overwhelming, but it is crucial to know that help is available.

For homeowners in New Mexico facing financial hardship, a network of robust, often free, programs and services exists specifically to provide support and prevent foreclosure. While some large-scale federal programs have ended, the state's commitment to helping residents stay in their homes remains strong. The most effective form of mortgage relief today is proactive foreclosure prevention, which involves working with experts who can help you navigate options with your lender.

Critical Update: The Status of the Homeowner Assistance Fund (HAF)

It is essential for homeowners to have the most current information. The federal Homeowner Assistance Fund (HAF), a program created to provide direct financial relief to homeowners impacted by the COVID-19 pandemic, is now closed in New Mexico . The New Mexico Mortgage Finance Authority (MFA), which administered the program, is no longer accepting new applications.

The closure of HAF marks a significant shift in the type of assistance available. While direct grants are no longer the primary form of aid, a comprehensive system of expert guidance, counseling, and legal support has taken its place. The focus has moved from a one-time financial rescue to providing homeowners with the tools and professional advocacy needed to achieve long-term mortgage stability.

Free Foreclosure Counseling and Legal Support: Your Strongest Defense

In the current environment, the most powerful resource available to a New Mexico homeowner in distress is an expert ally. The state offers access to free, professional guidance to help navigate the complex financial and legal systems involved in mortgage delinquency . These services are designed to level the playing field between an individual homeowner and a large lending institution.

The Power of HUD-Certified Housing Counseling

A HUD-certified housing counselor is a trained professional who acts as a homeowner's advocate, and their services are free and confidential for all New Mexico residents. These unbiased experts work to help homeowners understand their options and make the best possible decisions for their situation.

A housing counselor provides several critical services:

• Financial Assessment: They conduct a thorough review of your finances, including income, expenses, and mortgage details, to get a clear picture of the situation.
• Explanation of Options: They explain the various "loss mitigation" plans available to resolve a mortgage default, such as loan modifications or forbearance plans.
• Application Assistance: They help you prepare and submit applications for loss mitigation programs to your mortgage servicer, ensuring the paperwork is correct and complete.
• Lender Negotiation: A counselor advocates on your behalf directly with the mortgage lender, working to find a sustainable solution.

Engaging with a housing counselor as early as possible, even before missing a payment, can significantly increase the chances of a positive outcome.

Key Service Provider: United South Broadway Corporation (USBC)

United South Broadway Corporation (USBC) is a primary, statewide resource offering a comprehensive suite of free services to New Mexico homeowners . As a non-profit, HUD-approved agency, USBC provides both housing counseling and legal services under one roof.

• Housing Counseling: USBC’s counselors specialize in loss mitigation and can assist homeowners who are about to fall behind on payments, not just those already in default. To be eligible, you must be the owner-occupant of the home, and all parties on the mortgage note must participate. There is no income cap for these counseling services.
• Legal Representation: For homeowners facing active foreclosure, USBC's Fair Lending Center may provide full legal representation. This service is available for income-qualified homeowners, generally those with household incomes at or below 200% of the federal poverty guidelines.
• Free Legal Consultation: The Fair Lending Center offers a free 30-minute phone consultation with an attorney to all defendant homeowners, regardless of income, to explain the foreclosure process.
• Court Mediation Assistance: USBC counselors and attorneys also assist homeowners who participate in court-facilitated mediation programs designed to help negotiate a resolution with lenders.

To access these services, homeowners can contact USBC directly at 505-764-8867 or 575-449-8930 for a free consultation.

Key Service Provider: Tierra Del Sol Housing Corporation

Tierra Del Sol Housing Corporation is another vital organization providing foreclosure prevention services across New Mexico . Their Foreclosure Counseling Assistance Program equips homeowners with the knowledge and support needed to retain their homes.

Their services focus on a range of solutions, including:

• Loan modification
• Short sale
• Deed in lieu
• Forbearance
• Connecting homeowners with necessary legal services

Homeowners can schedule an appointment by contacting a foreclosure counselor at 575-541-0477. You can also reach counselor Socorro Rodriguez directly at 575-680-0873 or socorror@tdshc.org.

Active Mortgage and Housing Assistance Programs

While large-scale grant programs have concluded, several targeted programs remain active. It is important to understand the purpose and eligibility for each. The New Mexico Mortgage Finance Authority (MFA), also known as Housing New Mexico, is the state's official housing agency but does not offer general mortgage relief for homeowners with loans from other lenders.

For Homeowners with MFA-Serviced Loans

If your mortgage loan is directly serviced by MFA/Housing New Mexico, the agency has a dedicated Loss Mitigation Department to help you . This is an internal process specifically for their borrowers.

To be considered for a loss mitigation program, follow these steps:

1. Download the Foreclosure Financial Worksheet from the MFA website.
2. Gather all required supporting documents as detailed in the worksheet.
3. Mail or fax the signed form and all documents to the MFA Loss Mitigation Department.

Mailing Address: MFA Attn: Loss Mitigation Department 344 Fourth St. SW Albuquerque, NM 87102 Fax: 505-243-3289 It is critical to contact them as soon as you start having trouble, as more options are available early in the process.

For Rural Homeowners: USDA Section 504 Home Repair Program

For very-low-income homeowners in eligible rural areas, the U.S. Department of Agriculture (USDA) offers the Section 504 Home Repair program. This program can provide significant financial relief by funding essential home repairs, freeing up resources for mortgage payments.

• Program Structure: The program provides loans to repair or modernize homes and grants to elderly homeowners (age 62 or older) to remove health and safety hazards.
• Financial Details: Loans can go up to $40,000 with a fixed interest rate of 1% over a 20-year term. Grants have a lifetime maximum of $10,000. Loans and grants can be combined for up to $50,000 in total assistance.
• Eligibility: To qualify, you must own and occupy the home, be unable to obtain affordable credit elsewhere, have a household income below the very-low-income limit for your county, and live in a USDA-eligible rural area.
• How to Apply: Applications are accepted year-round through local USDA Rural Development offices. New Mexico residents can contact the state office at 505-761-4950 for assistance.

For Veterans: U.S. Department of Veterans Affairs (VA) Assistance

Veterans with VA-backed home loans who are struggling with payments have access to a dedicated support system through the U.S. Department of Veterans Affairs . The VA works with lenders to explore all possible options to help veterans avoid foreclosure. To get help, contact a VA loan technician at 877-827-3702 .

New Mexico Homeowner Assistance: Key Resources at a Glance

Understanding Your Options with Your Lender (Loss Mitigation)

What is Loss Mitigation?

"Loss mitigation" is the process of working with a borrower to avoid foreclosure. Lenders are often motivated to find an alternative solution because foreclosure is a costly and lengthy process for them as well. A housing counselor is an expert in navigating these options and can help you apply for the one that best fits your circumstances.

Common Loss Mitigation Solutions

When you or your housing counselor speak with your lender, these are the most common solutions that will be discussed.

• Loan Modification: A permanent change to one or more of the original terms of your mortgage, such as lowering the interest rate or extending the loan term to create a more affordable monthly payment.
• Forbearance: A temporary agreement where your mortgage servicer allows you to pause or reduce your payments for a limited period. The missed payments must be repaid later.
• Repayment Plan: If you have fallen behind but can now resume your regular payment, a repayment plan allows you to pay the overdue amount over a set period in addition to your regular monthly payment.
• Short Sale: This allows you to sell the property for less than the total amount you owe on the mortgage, with the lender's approval. It can be less damaging to your credit than a foreclosure.
• Deed in Lieu of Foreclosure: This involves voluntarily transferring the title of your property to the lender in exchange for being released from your mortgage obligation.

Additional State and Local Resources for Housing Stability

New Mexico Statewide Foreclosure Settlement Program

For homeowners already in the legal process of foreclosure, the New Mexico judiciary offers a Statewide Foreclosure Settlement Program. This court-facilitated program assists homeowners and lenders in reaching mutually agreeable solutions, often resulting in loan modifications that allow homeowners to keep their homes.

Home Rehabilitation and Weatherization Programs

Other programs offered by MFA can improve a homeowner's overall financial health by reducing other major household expenses, which can free up funds for housing payments.

• HOME Rehabilitation Program: This program provides assistance to low-income homeowners for necessary health, safety, and code-compliance repairs.
• NM Energy $mart Weatherization Program: This program helps income-eligible New Mexicans reduce their utility bills by installing energy-saving measures in their homes at no cost.

A Path Forward: Your Action Plan

Facing mortgage delinquency can feel paralyzing, but taking clear, decisive action is the key to a better outcome. Follow these steps to begin securing the help you need.

1. Don't Wait. Time is your most valuable asset. The sooner you address the problem, the more options you will have. Ignoring letters and calls from your lender will only limit your potential solutions.
2. Contact a Free HUD-Certified Housing Counselor. This is the single most important first step. An expert counselor will assess your situation and advocate on your behalf. Call United South Broadway Corporation (USBC) at 505-764-8867 or Tierra Del Sol Housing Corporation at 575-541-0477 to get started.
3. Gather Your Financial Documents. To have a productive conversation, you will need key documents. Prepare your most recent mortgage statement, proof of income, recent bank statements, and a brief letter explaining your financial hardship.
4. Contact Your Mortgage Servicer. Call the number on your mortgage statement to speak with your servicer’s loss mitigation department. Inform them that you are experiencing a financial hardship and wish to learn about your options to avoid foreclosure. It is often best to take this step with the guidance of your housing counselor.

Frequently Asked Questions