Yesterday, several local advocacy groups filed an amicus brief to a foreclosure case in the New Mexico Court of Appeals. Their goal? To support a pair of unlucky Chimayo homebuyers—

and to keep New Mexico's Home Loan Protection Act (pdf) from losing its teeth.


Fred Rowe, the president of the Santa Fe

and counsel for amici curiae, tells SFR this case—

Bank of New York v. Romero

—could have far-reaching implications for how the mortgage crisis plays out in New Mexico.

The backstory is one that's become all too familiar: According to the brief, Mary and Joseph Romero—who were already in debt and behind on their loan payments—accepted an offer to refinance their home. They signed a borrower's certificate saying they'd received a "reasonable, tangible net benefit" from the new loan, even though neither had completed high school, the brief explains, nor understood the new loan documentation.

From the brief:

Predictably, the Romeros soon fell behind in their monthly payments

, and were duly served with notices of delinquency and default in 2007, followed by the assignee Bank’s Complaint seeking a foreclosure and deficiency judgment.

While that sucks, it's hardly unique. Here's where things get shady:

After a two-day bench trial, the District Court ruled for the Bank in full. In pertinent part, the court’s September 1, 2009 Findings and Conclusions ruled that

(1) the Bank of New York was a national bank, and hence was immunized from New Mexico’s Home Loan Protection Act by federal preemption;


(2) the Bank did not engage in unlawful refinance “flipping” because the loan gave a “reasonable, net tangible benefit” to the Romeros via a $31,164 cash payment. On the same basis, the court dismissed the Romeros’ counterclaims against the Bank and affiliated lenders.

But Rowe argues that

there's no such carte blanche for national banks

. Even if there was a loophole, "New Mexico statutes, which must be 'liberally construed,'

ban abusive lending

," the brief reads—especially for "low-income, Hispanic homeowners."

"The Neighborhood Law Center has a substantial interest in this appeal, not only as


test case for making national banks subject to the New Mexico Home Loan Protection Act,

" Rowe says, "but also to [ensure] federal funds to keep people in their homes are utilized effectively."

He's referring to the financial reform and consumer protection bill that Pres. Obama

. In that respect, the brief's timing couldn't be better—though Rowe says he expects the appeal to take a while. Bonus: the Archdiocese of Santa Fe blessed the brief. Other amici curiae include the

, the Hispanic Bar Association,



, the

and the