2023 New Mexico Statutes › Chapter 58 - Financial Institutions and Regulations › Article 21A - Home Loan Protection › Section 58-21A-2 - Findings.

The legislature finds that:
A. abusive mortgage lending has become an increasing problem in New Mexico, exacerbating the loss of equity in homes and causing the number of foreclosures to increase in recent years;
B. one of the most common forms of abusive lending is the making of loans that are equity-based, rather than income-based;
C. the financing of points and fees in these loans provides immediate income to the originator and encourages creditors to repeatedly refinance home loans; and
D. while the marketplace appears to operate effectively for conventional mortgages, too many homeowners find themselves victims of overreaching creditors who provide loans with high costs and terms that are unnecessary to secure repayment of the loan.
History:
Laws 2003, ch. 436, § 2.
ANNOTATIONS
Effective dates.
— Laws 2003, ch. 436 contains no effective date provision, but, pursuant to N.M. Const., art. IV, § 23, is effective June 20, 2003, 90 days after adjournment of the legislature.
Applicability.
— Laws 2003, ch. 436, § 19A made the Home Loan Protection Act applicable to all home loans made or entered into after January 1, 2004.
Equity-based loan was not subject to the legislative findings set forth in the Home Loan Protection Act.
— Where plaintiff bank filed a complaint for foreclosure, alleging that defendant had defaulted on a "no document" loan taken out in 2003, approval of which depended on whether defendant's equity and credit score met certain guidelines, and where defendant argued that the equity-based loan was unenforceable as a matter of public policy, claiming that the Home Loan Protection Act (HLPA) 58-21A-1 to 58-21A-14 NMSA 1978, established New Mexico's public policy that equity-based loans were a form of abusive lending and unenforceable, the district did not err in granting summary judgment for plaintiff, because the HLPA did bring every loan within its purview; the legislature used the applicability date to clarify the class of home loans to which the HLPA applies, thus explicitly narrowing the class to loans that were made or entered into after January 1, 2004.
Wells Fargo v. Graham
, 2023-NMCA-023.
Bank did not have "unclean hands" in making equity-based loan.
— Where plaintiff bank filed a complaint for foreclosure, alleging that defendant had defaulted on a "no document" loan taken out in 2003, approval of which depended on whether defendant's equity and credit score met certain guidelines, and where defendant argued that the equity-based loan was unenforceable based on the equitable doctrine of unclean hands, claiming that by approving an equity-based loan with no investigation into defendant's assets and ability to pay, the bank's conduct was fraudulent, illegal or inequitable, the district did not err in granting summary judgment for plaintiff, because the undisputed facts before the district court created no material issue of fact to support equitable relief based on fraudulent, illegal or inequitable conduct by the bank in originating the 2003 loan; to the contrary, defendant's testimony demonstrated that he understood the terms of the loan and purposefully sought the loan because its equity-based terms were the only terms available to him in his financial situation.
Wells Fargo v. Graham
, 2023-NMCA-023.