Bills help homeowners in foreclosure

ALBUQUERQUE (KRQE) - About 8,800 homes are in some form of foreclosure in New Mexico.

The system has become so bogged down, that homeowners have a tough time figuring out where they are in the process.

Now some state lawmakers, the Attorney General's Office and advocates for homeowners are introducing legislation that would help these people negotiate the maze.

There are two bills being introduced that deal with foreclosures, and the real goal is to get mortgage holders to communicate with homeowners.

Senate Majority Leader Michael Sanchez, D-Belen, and Sen. Stephen Fischmann, D-Las Cruces, say the bills offer some new rules and guidelines.

Under the proposed legislation, banks and lenders would have to give homeowners a 30-day notice prior to the loss of their home, and lenders would have to make a good-faith review of the borrower's financial situation offering a loan modification or other option to bring payments up to date.

The legislation would stop the practice of processing foreclosure complaints and loan modifications at the same time. Lenders would also have to offer mediation as part of the first default notice so homeowners would have an understanding of the process.

In addition, homeowners could bring in a third-party mediator to help them through the process.