The New Mexico Housing Agency expresses concern over the rise in foreclosures in Albuquerque

Last year in the state of New Mexico, 36 out of nearly 13,000 home loans ended in foreclosure. According to some experts, this figure could double this year.

Due to the high interest rates currently in place, the end of federal assistance provided during the pandemic, and other various issues, the rise in foreclosures on mortgages managed by the New Mexico Mortgage Finance Authority could become a reality, stated one of its representatives.

Theresa Lloyd, director of services for the entity, informed the board during a meeting that some residents of Albuquerque and New Mexico in general, who hold subsidized loans, are “desperate” trying to avoid the foreclosure of their homes because the support programs have been gradually phased out.

Last year, 36 households in New Mexico faced foreclosure, all with loans managed by the Mortgage Finance Authority. Lloyd predicts that given the current situation, this number could increase to between 60 and 75 foreclosures this year.

Considering the more than 13,000 mortgage loans that the authority has managed since June 2016 for low- and middle-income borrowers, this figure does not seem too alarming. Nevertheless, Lloyd expressed concern and called for exploring possible preventive measures and investigating further the circumstances of why people are losing their homes.

Lloyd could not identify any common factor among the New Mexico households that lost their homes, nor confirm whether private investors purchased the foreclosed homes at auction. In response to questions from board members, she stated that her team would look more closely into the matter in the future. “It’s not a large number,” commented board member Rebecca Wurzburger regarding the foreclosures. “But it’s significant if you’re the one losing your home.”

One point to note is that this potential increase in foreclosures comes amid a notable housing shortage not only in Albuquerque but across the state.

During a recent legislative session, a historic approval of nearly $200 million for housing investments was made. The Mortgage Finance Authority received a one-time payment of $50 million for a housing affordability trust fund, while the New Mexico Finance Authority received $125 million for affordable housing infrastructure loans.

Lloyd pointed out that the lifting of laws established during the pandemic, which prevented foreclosures on owner-occupied homes, is likely the most significant factor in the expected increase. Lloyd also explained that many households on the verge of foreclosure have exhausted several programs offered by the authority to defer payments or establish new payment plans for their debt.

Undoubtedly, high interest rates also significantly complicate the use of the MFA’s refinancing programs. Earlier this month, the MFA stopped accepting new applications for direct mortgage assistance from the Housing Assistance Fund, which provided up to $30,000 to households experiencing pandemic-related income losses, as these funds have been entirely depleted.

According to the report on its website, the authority utilized all the funds granted by Congress at the start of the COVID-19 pandemic, distributing over $45 million to 4,410 applicants.

All of these mortgages in question are serviced by the state’s Mortgage Finance Authority and were issued through federal agencies or companies like Fannie Mae, Freddie Mac, and Ginnie Mae.

Lloyd concluded her statement by saying that the entity has limited flexibility to prevent potential foreclosures and must adhere to the guidelines set forth by regulations.

Available Foreclosures:

Albuquerque: 15 homes available.
Santa Fe: 10 homes available.
Las Cruces: 11 homes available.

By Elias DaSilva | September 19, 2024.