SENATE BILL 141

52nd legislature - STATE OF NEW MEXICO - first session, 2015

INTRODUCED BY

Michael Padilla

AN ACT

RELATING TO REAL PROPERTY; REQUIRING THE OPPORTUNITY FOR A SETTLEMENT FACILITATION CONFERENCE PRIOR TO FORECLOSURE; MAKING AN APPROPRIATION.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

     SECTION 1. [NEW MATERIAL] OPPORTUNITY FOR SETTLEMENT FACILITATION CONFERENCE PRIOR TO FORECLOSURE.--

          A. District courts shall refer all plaintiffs and defendants in residential foreclosure actions by court order to a mandatory settlement facilitation conference to explore alternatives to foreclosure to resolve the case. Plaintiffs may file a motion to the court to waive participation in the settlement facilitation for good cause.

          B. The plaintiff must identify a person who has full authority to settle the case to attend the settlement facilitation conference. The plaintiff's representative with full authority to settle the case and the defendant must appear at the settlement facilitation conference in person. The settlement facilitator may appear by video conference.

          C. All parties are required to participate in the settlement facilitation conference in good faith.

          D. The administrative office of the courts shall ensure that all district courts provide foreclosure settlement facilitation conference programs in residential foreclosure actions. The administrative office of the courts shall impose additional requirements on funded programs.

          E. Settlement facilitation shall include exploration of alternatives to foreclosure that increase opportunities for homeowners to remain in their homes when feasible and reduce the number of vacant homes in neighborhoods.  Alternatives to foreclosure include loan modification, deed-in-lieu of foreclosure, cash for keys, short sale, an expedited "fast track" judicial foreclosure process for vacant and abandoned houses if the borrower signs a statement that the borrower does not intend to return to and maintain ownership of the home and an extended occupancy program for homeowners who relinquish title to the lender in exchange for either an affordable month-to-month rental agreement or an affordable "lease-to-own" contract.

          F. The foreclosure action shall be stayed for no more than one hundred twenty days from the date of the court referral for settlement facilitation.

          G. As used in this section:

                (1) "affordable" means thirty-one percent or less of borrower income, the standard for affordability used by the United States department of housing and urban development;

                (2) "residential foreclosure action" means foreclosure by a creditor on a home loan; and

                (3) "settlement facilitation conference" means a conference to achieve a voluntary, confidential resolution of the dispute in which:

                     (a) the parties meet in person with a neutral facilitator, together with their counsel or as self-represented litigant. Foreclosure housing counselors may be included;

                     (b) each party's positions and interests are heard;

                     (c) the nature of the case is discussed; and

                     (d) possible solutions are considered.

     SECTION 2. APPROPRIATION.--One million five hundred seventy-five thousand dollars ($1,575,000) is appropriated from the general fund to the administrative office of the courts for expenditure in fiscal year 2016 to provide foreclosure settlement facilitation conference programs in all district courts. Any unexpended or unencumbered balance remaining at the end of fiscal year 2016 shall revert to the general fund.

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