New Mexico Home Loan Protection Act

Adopted by the New Mexico Financial Institutions Division of the Regulation and Licensing Department, the Home Loan Protection Act became effective on June 30, 2004.

The Act prohibits a creditor from knowingly and intentionally engaging in the unfair act or practice of "flipping" a home loan. Flipping is defined as the making of a home loan to a borrower that refinances an existing home loan when the new loan does not have a reasonable, tangible net benefit to the borrower considering all of the circumstances.

The Act also contains three sections concerning legal liability exposure of creditors and assignees for actions that may be brought for violations of the Act. The new rule, NMAC 12.15.7, explains the interrelationship of the three statutory sections.

The Act additionally provides that no creditor shall make a high-cost home loan without first receiving certification from a third-party, nonprofit counselor approved by the U.S. Department of Housing and Urban Development, the New Mexico Mortgage Finance Authority, or the Director of the Financial Institutions Division of the Regulation and Licensing Department that the borrower has received counseling on the advisability of the loan.

To read the full text of the New Mexico Home Loan Protection Act, Click Here!

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