How Homeowner’s Assistance Funds May Help New Mexicans Struggling with Mortgage Payments: Applying for Help Before Funding Runs Out

By Savanna Duran, Staff Attorney, USBC Fair Lending Center

Anyone can find themselves falling behind on their mortgage for many reasons: medical diagnosis, loss of employment, or death of a family member. There is currently help for New Mexicans who have fallen behind on their mortgage through the Homeowner’s Assistance Fund program (HAF), which is administered by the New Mexico Mortgage Finance Authority (MFA). The HAF program provides eligible New Mexico households with grants of up to $30,000. This is not a loan, and the funds do not need to be repaid. If a homeowner owes more than $30,000 on their loan but wants to keep their home, they may also apply for a loan modification through their servicer in addition to applying for a HAF grant with the MFA.

HAF funding is running out, however, and time is of the essence to apply. To apply for HAF, borrowers first submit their application to the MFA online or may request a paper application. Once an application is submitted, it will undergo an initial review and be assigned to a HAF file analyst. The MFA and the homeowner’s loan servicer then begin an exchange of information.

First, the MFA reviews the homeowner’s application and sends the appropriate notice to the servicer letting the servicer know that the MFA has completed its initial review. Then, the servicer verifies basic information about the loan and the amount needed to bring the loan current. If the homeowner needs more than $30,000 to reinstate their loan, then the MFA may place the borrower in what is called the “P-program.” Borrowers in the P-program are typically working with their servicer to modify their loan, using the HAF money to lower the amount due and increase the chances of getting a modification.

In some cases, however, homeowners experience issues with their HAF applications, and may be unsure what to do or how to resolve those issues. For example, a homeowner might learn that their HAF application was denied because the servicer sent the MFA what is known as an “O-record.” An O-record essentially means that there is an “obstacle” with a HAF application. There can be different reasons why a servicer sent an O-record. For example, a servicer may have declined to participate in the HAF program. Or, the servicer may have sent an O-record rather than verifying the amount needed to bring the loan current. For homeowners in this situation, their best course of action is to find out why and reach out to their HAF file analyst right away so that their application is not closed while they work to resolve the situation with the lender. If their HAF application is closed, they may reapply.

If you or someone you know is struggling with foreclosure or having difficulties with their HAF application, it is imperative that borrowers reach out to apply for HAF before HAF funding runs out. United South Broadway Corporation has housing counselors and legal services for income-qualifying New Mexicans, and assists clients throughout New Mexico. Call us on 505-764-8867 or toll-free 866-201-6296 or contact us here.