Foreclosed Homeowners Go to Court on Their Own

Mark Holm for The New York Times

Norma Canales and Saul Valdez didn’t know they could represent themselves. “It gives you,” he said, “some sort of hope.”

ALBUQUERQUE — Saving your home from foreclosure is increasingly a do-it-yourself project.  Lawyers are scarce and free legal assistance is overwhelmed in New Mexico, so a community center here is offering an hourlong class in how to download the correct forms, decipher the lingo and mount a defense, however tentative and primitive, against a multibillion-dollar bank.
“I don’t see success for someone like me who doesn’t understand the law,” said Skylar Perea, a senior care aide who fell behind on her payments during the eight months she was out of a job. “But it’s better than nothing.”
In New Mexico, New York, Florida and the 20 other states where foreclosures require a judge’s approval, homeowners in default have traditionally surrendered their homes without ever coming to court to defend themselves. (In the 27 other states, including California, Nevada and Arizona, homeowners have a much harder time contesting a foreclosure even if they want to.)
That passivity has begun to recede. While many foreclosures are still unopposed, courts are seeing a sharp rise in cases where defendants show up representing themselves.
One factor driving the increase is the changing nature of foreclosure.
When people went into default in 2008, it was generally because of the exploding cost of a subprime loan. Unable or unwilling to handle sharply higher payments, the homeowner walked away with little protest.
Now many defaults are prompted by stretches of unemployment like Ms. Perea’s. These owners do not have the resources to come up with all their missed payments at once. But if they can persuade their lender to restructure the loan instead of seizing the house, they have a chance of staying put.
In New Mexico, this is where the hourlong workshops come in. “When you cannot pay, this is called ‘a breach of contract,’ ” Angelica Anaya Allen, director of the nonprofit Fair Lending Center, explained to a small but diverse group one recent morning.
Young and old, solo and in couples, the homeowners in Ms. Anaya Allen’s class were all in breach, clutching special-delivery packages from their lenders announcing that the machinery was now engaged to evict them. They took notes, asked questions — is the courthouse the building on Fourth Street with the blue roof? — and were resolute if not quite eager for battle.
“I’m not sure where I stand, but I just don’t want to let the house go,” said Ms. Perea.
The legal challenges that she and the other students will make are slowing the foreclosure process. Over the last year, the average delinquency for a foreclosed loan rose to 499 days from 406 days, according to the data firm LPS Applied Analytics. But they are also straining the courts and often encouraging unreal expectations.
Louis McDonald, the chief judge for New Mexico’s 13th Judicial District, welcomes the influx of homeowners defending themselves, known as pro se defendants.
“They really want to stay in their houses,” he said. “Some of them have fairly legitimate defenses.”
But the law grows more complex as the cases proceed, and foreclosure still looms for those who do not grasp its intricacies. “The system is failing those who can’t afford representation,” Mr. McDonald said.
The 13th District surrounds Albuquerque on three sides and includes Sandoval County, which has the highest foreclosure rate in the state. Nearly half of the 100 new foreclosure defendants flooding the court every month are there on their own. There are so many of these defendants, and they need so much help understanding the law in a small, overburdened court, that last year Mr. McDonald instituted regular meetings overseen by himself and the district’s two other judges. Volunteer lawyers were on hand to advise the defendants, and the bank lawyers were required to attend.