NM Publishes Final Home Loan Regs

The financial institutions division of the New Mexico Regulation and Licensing Department has published final regulations regarding the Home Loan Protection Act.The regulations provide guidance on loan flipping, approved third-party nonprofit counselors, and new limitations on the liability exposure of creditors and assignees, according to the Washington law firm Lotstein Buckman LLP. Under one of the new regulations, a creditor is deemed not to have "knowingly and intentionally" engaged in the act of flipping if the new loan provides a "reasonable, tangible net benefit" to the borrower. The regulation does not establish a mandatory method to determine the "reasonable, tangible net benefit" standard, but it provides examples of what constitutes such a benefit. Based on the rule, the financial institutions division clarifies that it approves any third-party, nonprofit counselor approved by the New Mexico Mortgage Finance Authority or the U.S. Department of Housing and Urban Development to issue a counseling certification required by the Home Loan Protection Act. Liability is imposed for violations of the law on those who buy or are otherwise assigned a high-cost home loan unless that person can demonstrate that a reasonable person exercising due diligence could not determine that the mortgage was a high-cost home loan.