28% of subprime mortgages in New Mexico show “low or no documentation,” according to the latest figures compiled by the Federal Reserve Bank of New York.

54% of subprime mortgage holders in New Mexico missed at least one payment in the last year.

"Steal tens of thousands of people’s money and not expect reprercussions [sic]. It’s payback time. What you just breathed in will kill you within 10 days." — From letters to financial institutions
that lost billions in the subprime mortgage market, allegedly sent by Richard L Goyette, aka Michael Jurek. The FBI arrested him last week in Albuquerque.


Better late than never: State Rep. Patricia Lundstrom, D-Gallup, wants to ban some of the predatory home loans that helped ruin the US economy.

Lundstrom proposed similar regulations last year, but that bill died. In the meantime, more New Mexicans have fallen behind on their mortgage payments.

Lundstrom's new bill would require lenders to document home buyers' "reasonable ability to repay" their loans, by showing payroll stubs and the like.

House Bill 316 also bans mortgages in which the borrower pays down only the interest, not the principal, and forbids lenders from penalizing borrowers for paying down their loans ahead of schedule.

Under the proposed law, mortgages couldn't be given based primarily on the value of a home already in foreclosure. It sets limits on how often, and by how much, a borrower's monthly payment can increase. It bans lenders from misrepresenting a borrower's credit rating (also known as "fraud") or encouraging borrowers to fudge their incomes.

Other provisions are designed to keep lenders from engaging in "any unfair or deceptive practice." Who could argue with that? Why, the New Mexico Mortgage Lenders Association!

Lundstrom's bill "lacks industry expertise," NMLA President Angela Muxworthy says. "If passed, it would have consequences to our already crippled mortgage industry, but could also have negative impact on New Mexico citizens."

The lenders' association supports a less punitive regulatory bill sponsored by Sen. Phil Griego, D-San Jose, that was developed with input from the mortgage industry. The Senate bill forbids some, but not all, of the practices above.