Couple Receives Loan Money, Defaults, Sues, and Gets Attention of NM Supreme Court

According to the Albuquerque Journal a Chimayó couple that collected $39,000 in cash out proceeds from a mortgage refinance and then soon defaulted, has managed through protracted litigation, to avoid foreclosure since 2007. Their seemingly simple case of a loan default has managed to reach the NM Supreme Court. In October 2011, the New Mexico Court of Appeals upheld the ruling of former state District Judge James Hall. Hall ruled in favor of the lender and against all of the borrower's counterclaims.
It seems that after the couple received and spent $39,000 in cash proceeds back in 2006, they defaulted and claimed that their lender, had taken advantage of their "limited education." According to the Journal story, court records show that the couple took out the loan in question to pay off another lender. The previous lender had also accepted the home as collateral. The couple apparently used the original mortgage funds to start a business. Reportedly the "cash out" money from the refinancing loan in question was used to pay off credit card and other debt, plus inject additional capital into their music and clothing store business in Española. Read full story here (subscription required): News New Mexico

Couple Receives Loan Money, Defaults, Sues, and Gets Attention of NM Supreme Court