2023 New Mexico Statutes › Chapter 47 - Property Law › Article 15 - Mortgage Foreclosure Consultant Fraud Prevention › Section 47-15-3 - Foreclosure consultant contract; requirements.

A. A foreclosure consulting contract shall:
(1) be provided to the owner for review at least twenty-four hours before being signed by the owner;
(2) be printed in at least fourteen-point type and written in the same language that was used by the owner in discussions with the foreclosure consultant to describe the consultant's services or to negotiate the contract;
(3) fully disclose the nature and extent of the foreclosure consulting services to be provided, including any foreclosure reconveyance that may be involved, and the total amount and terms of any compensation to be received by the foreclosure consultant or anyone working in association with the foreclosure consultant;
(4) disclose the names of any other corporations, businesses or entities on behalf of which the consultant does business or with which the consultant is affiliated or employed;
(5) separately itemize all costs, fees or expenses and the purpose of the costs, fees or expenses that are charged to the homeowner during the term of the contract;
(6) be dated and personally signed by the owner and the foreclosure consultant; and
(7) contain the following notice, which shall be printed in at least fourteen-point boldface type, completed with the name of the foreclosure consultant, and located in immediate proximity to the space reserved for the owner's signature:
"NOTICE REQUIRED BY NEW MEXICO LAW
.......... (Name) or anyone working for him or her CANNOT ask you to sign or have you sign any lien, mortgage or deed as part of signing this agreement unless the terms of the transfer are specified in this document and you are given a separate explanation of the nature and extent of the transaction.
.......... (Name) or anyone working for him or her CANNOT guarantee you that they will be able to refinance your home or arrange for you to keep your home. Continue making mortgage payments until a refinancing, if applicable, is approved. If a transfer of the deed or title to your property is involved in any way, you may rescind the transfer any time within 3 days after the date you sign the deed or other document of sale or transfer. See the attached Notice of Rescission form for an explanation of this right. As part of any rescission, you must repay any money spent on your behalf as a result of this agreement within 60 days of receiving commercially reasonable documentation of the payments.
THIS IS AN IMPORTANT LEGAL CONTRACT AND COULD RESULT IN THE LOSS OF YOUR HOME. CONTACT AN ATTORNEY OR COUNSELOR BEFORE SIGNING."
B. A foreclosure consulting contract shall contain on the first page, in at least fourteen-point type:
(1) the name and address of the foreclosure consultant to which the notice of cancellation is to be mailed; and
(2) the date the owner signed the contract.
C. A foreclosure consulting contract shall be accompanied by a completed form in duplicate, captioned "NOTICE OF RESCISSION RIGHTS", which shall:
(1) be on a separate sheet of paper attached to the contract;
(2) be easily detachable; and
(3) contain the following statement printed in at least fifteen-point type:
"NOTICE OF RESCISSION RIGHTS
(Date of Contract)
You may cancel or rescind this contract, without any penalty, at any time until midnight of the third business day after the day on which you sign this contract. If you want to end this contract, mail or deliver a signed and dated copy of this Notice of Rescission, or any other written notice indicating your intent to rescind to (name of foreclosure consultant) at (address of foreclosure consultant, including facsimile and electronic mail).
As part of any rescission, you (the homeowner) must repay any money spent on your behalf as a result of this agreement within 60 days of receiving commercially reasonable documentation of the payments.
THIS IS AN IMPORTANT LEGAL CONTRACT AND COULD RESULT IN THE LOSS OF YOUR HOME. CONTACT AN ATTORNEY OR COUNSELOR BEFORE SIGNING.
RESCISSION OF CONTRACT FORM
TO: (name of foreclosure consultant)
(address of foreclosure consultant, including facsimile and electronic mail)
I hereby rescind this contract.
.......... (Date)
.......... (Homeowner's signature)".
D. The foreclosure consultant shall provide the owner with a signed and dated copy of the foreclosure consulting contract and the attached notice of rescission rights and rescission of contract form immediately upon execution of the contract.
E. The time during which the owner may rescind the foreclosure consulting contract does not begin to run until the foreclosure consultant has complied with this section and the owner has signed the contract.
History:
Laws 2010, ch. 58, § 3.
ANNOTATIONS
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).