SENATE PUBLIC AFFAIRS COMMITTEE SUBSTITUTE FOR

SENATE MEMORIAL 40

51st legislature - STATE OF NEW MEXICO - first session, 2013

A MEMORIAL

REQUESTING THAT THE NEW MEXICO LEGISLATIVE COUNCIL CREATE A TASK FORCE TO STUDY HOW TO PROVIDE CONSUMER PROTECTIONS FOR LOW-INCOME PURCHASERS OF RESIDENTIAL REAL ESTATE THROUGH INSTALLMENT CONTRACTS IN ORDER TO PREVENT UNETHICAL AND UNFAIR SALES AND CURB THE PROLIFERATION OF RESIDENTIAL DEVELOPMENT THAT LACKS CRITICAL INFRASTRUCTURE.

     WHEREAS, many low-income New Mexicans seek the security for themselves and their families that owning residential real property represents; and

     WHEREAS, many low-income New Mexicans who seek such security are unable to secure conventional mortgage loans due to a lack of assets or a lack of a favorable credit history, or because the property being purchased is nonconforming or is located in an illegal subdivision; and

     WHEREAS, many of those low-income New Mexicans purchase real property through an installment contract; and

     WHEREAS, many low-income New Mexicans who purchase residential real property through installment contracts may not be fully informed of the terms of the sale, the description and condition of the property and their rights and responsibilities under the contract; and

     WHEREAS, many of these real property sales may not be recorded with county clerks, and therefore New Mexico counties are unable to effectively manage development of their lands; and

     WHEREAS, when residential communities develop through the sale of real property through unscrupulous and unrecorded installment contracts and outside of recognized legal subdivisions, they often lack basic infrastructure development, including water, wastewater, electrical and natural gas services and dedicated roadways, that would result in safe and healthy housing; and

     WHEREAS, when residential communities develop without infrastructure, well-intentioned efforts to remedy that situation may be thwarted because ownership and property rights cannot be easily determined on these unscrupulous and unrecorded transactions; and

     WHEREAS, as a community, all New Mexicans need to come together to determine the necessary requirements, protections and remedies that should be put into effect to protect low-income New Mexicans who purchase residential real property through installment contracts in a manner that will not negatively affect the economic viability and vitality of ethical seller-financed contracts for the sale of residential real property;

     NOW, THEREFORE, BE IT RESOLVED BY THE SENATE OF THE STATE OF NEW MEXICO that the New Mexico legislative council be requested to create a task force to identify and study the consumer protections and remedies that could be enacted in the state for low-income New Mexicans who purchase residential real property through installment contracts; and

     BE IT FURTHER RESOLVED that the task force consider the fiscal and policy implications of these consumer protections and remedies for low-income New Mexicans, counties and the state as a whole; and

     BE IT FURTHER RESOLVED that the task force be composed of persons who are actively engaged as low-income New Mexicans who purchase residential real property through installment contracts and their advocates; persons who sell residential real property through installment contracts and their advocates; representatives of county governments and their advocates; representatives from escrow companies with at least twenty years' experience in the real estate business and are currently servicing at least two thousand five hundred real estate contracts; representatives from the New Mexico land title association; representatives from the REALTORS association of New Mexico; representatives from the New Mexico center on law and poverty; representatives from the colonias development council; representatives from united south broadway corporation; representatives from tierra del sol housing corporation; representatives of the consumer protection division of the office of the attorney general; and representatives from the New Mexico mortgage finance authority; and

     BE IT FURTHER RESOLVED that the task force report the work and progress of the task force to the appropriate legislative interim committee that deals with legal issues and the appropriate legislative interim committee that deals with economic development issues by November 1, 2013; and

     BE IT FURTHER RESOLVED that the task force report its findings and recommendations to the appropriate legislative interim committee that deals with legal issues and the appropriate legislative interim committee that deals with economic development issues by July 1, 2014; and

     BE IT FURTHER RESOLVED that copies of this memorial be transmitted to the co-chairs of the New Mexico legislative council, the REALTORS association of New Mexico, the New Mexico center on law and poverty, the colonias development council, the united south broadway corporation, the tierra del sol housing corporation, the New Mexico mortgage finance authority, the attorney general, the New Mexico real estate commission, the public regulation commission and the governor.

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