Bank of New York v. Romero
Decision Date | 25 October 2011 |
Docket Number | No. 29,945.,29,945. |
Citation | 150 N.M. 769,266 P.3d 638,2011 -NMCA- 110 |
Parties | The BANK OF NEW YORK as Trustee for Popular Financial Services Mortgage/Pass Through Certificate Series # 2006, Plaintiff–Appellee, v. Joseph A. ROMERO and Mary Romero, a/k/a Mary O. Romero a/k/a Maria Romero, Defendants–Appellants. |
Court | Court of Appeals of New Mexico |
OPINION TEXT STARTS HERE
Little & Dranttel, P.C., Elizabeth M. Dranttel, Peggy A. Whitmore, Albuquerque, NM, Severson & Werson, Jan T. Chilton, San Francisco, CA, for Appellee.
Joshua R. Simms, P.C., Joshua R. Simms, Albuquerque, NM, for Appellant.
Santa Fe Neighborhood Law Center, Frederick M. Rowe, Daniel M. Yohalem, Santa Fe, NM, for Amici Curiae.
{1} In 2006, Joseph and Mary Romero (the Romeros) refinanced the mortgage on their home in order to pay off existing debts and loans. When they defaulted two years later, The Bank of New York, as trustee for Popular Financial Services Mortgage/Pass Through Certificate Series # 2006, (the Bank) started foreclosure proceedings. In response to the complaint for foreclosure, the Romeros counterclaimed against the Bank, alleging, among other things, predatory lending practices. At issue in this appeal is whether the district court correctly determined that the Bank did not engage in “flipping” the loan in violation of NMSA 1978, Section 58–21A–4(B) (2003) (amended 2009), of the Home Loan Protection Act (HLPA), or violate the Unfair Practices Act (UPA), NMSA 1978, Sections 57–12–1 through –26 (1967, as amended through 2009). Because substantial evidence supports the district court's findings, we affirm.
{2} The Romeros inherited their home, located in Chimayo, New Mexico, from Joseph Romero's father in the early 1970s. They have owned the property ever since. Prior to refinancing the mortgage at issue in this case, the Romeros were making monthly payments on their home of approximately $1,200 to New Century Mortgage Corporation (New Century). In early 2006, the Romeros were behind on the New Century loan, which had an estimated payoff of $176,450.08, and were in debt on credit card and other loan obligations. Mr. Romero wanted to refinance his home loan in order to repay his debts and to revitalize the Romeros' clothing and music store in Espanola, New Mexico. As a result, the Romeros accepted and signed a new home loan offered by Equity One, Inc. (Equity One) for $227,240 that repaid their existing home loan, credit card debt, and other obligations. The loan also gave the Romeros $31,164.82 in cash to pay bills and restock their store. Monthly payments of $1,683.28 became due starting August 1, 2006.
{3} In September 2007, the Romeros stopped making payments on their mortgage and note. They fell behind in repaying the home loan, and by the end of the year, the Romeros owed over $8,000 in payments and fees. They were also eventually locked out of their store for failure to pay rent. The Romeros agree that they were properly served with notices of delinquency and default. Although the Romeros were given an opportunity to cure their default, they did not do so; and on April 1, 2008, the Bank, as trustee/assignee of the Romeros' mortgage, filed its complaint for foreclosure.
{4} The Romeros answered the complaint and admitted that they had entered into the mortgage and note and that they were several payments behind on the loan. The Romeros also counterclaimed against the Bank, alleging deceptive loan practices and unfair trade practices. The Romeros' basic contention is that Equity One took advantage of them—two individuals with limited education—and coerced them to incur a debt that Equity One knew they could never afford. Based on these allegations, the Romeros claimed that the Bank had (1) failed to disclose the “actual rate upon the home loan” as required by the HLPA; (2) had “flipp[ed]” the loan in violation of Section 58–21A–4(B); (3) had engaged in predatory lending practices including using deceptive marketing, concealing fees and costs, and structuring the loan to strip the Romeros of their equity; and (4) had violated the federal Truth in Lending Act (Regulation Z), Real Estate Practices Act, as well as the New Mexico HLPA and UPA.
{5} After a bench trial, the district court entered findings and conclusions, ruling in favor of the Bank and ordering the sale of the Romeros' home. The district court found, among other things, that the Bank did not engage in “flipping” because the loan resulted in a “reasonable, net tangible benefit” to the Romeros, nor did it violate the UPA. Further, the district court found that the HLPA did not apply to the Bank because it was preempted by federal law. The district court ruled against the Romeros on all of their counterclaims.
{6} On appeal, the Romeros raise five issues challenging seven of the district court's findings of fact and three of its conclusions of law. The Romeros contend that, with the exception of the court's ruling on preemption, which they claim fails as a matter of law, the remaining four issues fail based on lack of substantial evidence. Because we conclude that substantial evidence exists for each of the district court's findings and conclusions, and we affirm on those grounds, we do not address the Romeros' preemption argument.
{7} As we have noted, the issue raised by the Romeros and that we address in this appeal is whether substantial evidence exists to support certain findings and conclusions made by the district court. In accordance with our standard of review, the judgment of the trial court will not be disturbed on appeal if the findings of fact entered by the court are supported by substantial evidence, are not clearly erroneous, and are sufficient to support the judgment. See Mascarenas v. Jaramillo, 111 N.M. 410, 412, 806 P.2d 59, 61 (1991) ( ). When considering a claim of insufficient evidence, we resolve “all disputes of facts in favor of the successful party and indulge all reasonable inferences in support of the prevailing party.” Las Cruces Prof'l Fire Fighters v. City of Las Cruces, 1997–NMCA–044, ¶ 12, 123 N.M. 329, 940 P.2d 177. Thus, “[t]he question is not whether substantial evidence exists to support the opposite result, but rather whether such evidence supports the result reached.” Id. Finally, “we will not reweigh the evidence nor substitute our judgment for that of the fact finder.” Id.
{8} Before we turn to the issues in this case, however, we express our concern about the Romeros' brief in chief, which, in large measure, fails to conform to the New Mexico Rules of Appellate Procedure. The brief contains almost no argument, it fails to cite the record, and it fails to present the evidence as a whole. In order to properly support a challenge to the sufficiency of evidence, the argument section of the brief in chief must include “citations to authorities, record proper, transcript of proceedings or exhibits relied on.” Rule 12–213(A)(4) NMRA. This Court has no duty to review an argument that is not adequately developed. Headley v. Morgan Mgmt. Corp., 2005–NMCA–045, ¶ 15, 137 N.M. 339, 110 P.3d 1076 ( ). Further, where a party fails to cite any portion of the record to support its factual allegations, we need not consider its argument on appeal. Santa Fe Exploration Co. v. Oil Conservation Comm'n, 114 N.M. 103, 108, 835 P.2d 819, 824 (1992). Although the deficiencies in the Romeros' brief make it almost impossible to address many of their assertions, we consider their arguments where we can.
{9} We begin our analysis with the issue of whether the Bank violated the HLPA's requirement that a borrower receive a reasonable, tangible net benefit as this appears to be the crux of the Romeros' appeal. See § 28–21A–4(B). We then turn to their remaining arguments.
{10} The New Mexico Legislature enacted the HLPA in 2003 in response to the harm that predatory lending schemes were causing residents, resulting in the loss of home equity and an increase in foreclosures. NMSA 1978, § 58–21A–2 (2003). Like most states in the nation, our Legislature has found that such abusive practices are often intended to drive unsophisticated consumers into making ill-advised financial decisions and, as a result, too many homeowners find themselves victims of overreaching creditors. Under the HLPA, a proposed loan that refinances an existing home loan has to sufficiently protect the interests of the borrower from financial harm.
{11} Although it underwent substantial revisions in 2009, two provisions of the HLPA applied to the Romeros' 2006 loan. The first, Section 58–21A–4, applied to all home loans and included restrictions on predatory lending practices such as “flipping” a loan and encouraging default in connection with refinancing the loan. On the other hand, NMSA 1978, Section 58–21A–5 (2003) (amended 2009), sets forth limitations and prohibited practices for “high-cost” mortgages. High-cost loans are those that exceed either a rate or a points and fees threshold. NMSA 1978, § 58–21A–3(I) (2003) (amended 2009).
{12} On appeal, the Romeros do not challenge the district court's finding that their loan did not meet the “total points and fees threshold” or the “rate threshold” and, as a result, that their mortgage was not a “high-cost” home loan under Section 58–21A–5 of the HLPA. We therefore consider the Romeros' argument as it pertains to Section 58–21A–4 only. The relevant provision of that section provides:
B. No creditor shall knowingly and intentionally engage in the unfair act or practice...
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