An official at the New Mexico Mortgage Finance Authority expects foreclosures to double this year on mortgages it oversees in the state, citing the wind-down of federal pandemic protections, high interest interest rates and other factors.
Theresa Lloyd, the authority’s director of servicing, told the board at a meeting Wednesday that some New Mexicans with subsidized loans are “already at the end of their rope” to avoid foreclosure and face the end of programs that could help them stay housed.
Last year, 36 New Mexico households with home loans overseen by the Mortgage Finance Authority saw their house go into foreclosure and then resold to a new buyer. Lloyd predicts there could be between 60 and 75 such foreclosures this year.
“I hope I’m wrong,” she said in an interview with Source New Mexico.
That number is a tiny subset of more than 13,000 home loans the authority oversees that were issued since June 2016 to low-and middle-income borrowers. The worrying trend, Lloyd said, will prompt the authority to dig deeper to understand the fates of those losing their homes and what could have prevented that from happening.
And even though it’s a small number, people lost their homes, Lloyd told board members. “But where they landed, I don’t know.”
Lloyd could not describe to board members any factors common to the New Mexico households who lost their homes, or say whether private investors bought the newly vacant homes at auction. Following questions from board members, she said her team at the Mortgage Finance Authority will look more closely at the issue going forward.
“It’s not a big number,” board member Rebecca Wurzburger said of the foreclosures. “But it is a big number if you’re the person that loses your home.”
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The prospect of increased foreclosures occurs during a statewide housing affordability crisis and a sharp increase in homelessness statewide.
During the legislative session, lawmakers approved nearly $200 million for housing investments, which they touted as “historic.” The Mortgage Finance Authority received a one-time payment of $50 million for a housing affordability trust fund, and the New Mexico Finance Authority got $125 million for affordable housing infrastructure loans.
Lloyd said lifting pandemic-era laws prohibiting foreclosures on owner-occupied homes is a big reason behind the increase. Many of the households at the cusp of disclosure have exhausted a range of programs the authority offers to help defer payments or create new payment plans, she said.
Also, high interest rates make it harder to take advantage of the MFA’s programs for mortgage refinancing, she said.
Earlier this month, the MFA stopped accepting applications for direct mortgage assistance from the Housing Assistance Fund, which paid households up to $30,000 toward their mortgage if they suffered pandemic-related income losses. Lloyd said the authority ran out of money.
The authority, with money Congress awarded at the beginning of the COVID-19 pandemic, paid more than $45 million to 4,410 applicants, according to the program’s website.
The mortgages in question were provided through federal agencies or enterprises, like Fannie Mae, Freddie Mac or Ginnie Mae, and the state Mortgage Finance Authority services them.
Lloyd said at the meeting that the authority has no wiggle room to prevent foreclosures.
“We have to follow their guidelines,” Lloyd told board members.
Source: sourcenm.com