Foreclosures in New Mexico are typically judicial, which means they go through the courts. However, several years ago the state began permitting nonjudicial foreclosures, so that out of court foreclosures are now possible too. If you’re facing a foreclosure of your home in New Mexico, read on to learn about the state’s foreclosure laws, including how you'll find out about the foreclosure, whether you get the right to reinstate (by catching up on the overdue amounts) prior to the sale, and if you could be liable for a deficiency judgment after the foreclosure.
The citations to New Mexico’s foreclosure statutes are:
If you need help locating the statutes, see Finding Your State’s Foreclosure Laws.
The important parts of New Mexico’s foreclosure laws are summarized below. You can find more detailed articles on various aspects of New Mexico foreclosure law in Nolo’s New Mexico Foreclosure Law Center.
New Mexico law requires the following foreclosure notices.
Notice before foreclosure. Prior to the foreclosure, some borrowers get a notice of default that provides 30 days to cure the default and avoid a foreclosure. N.M. Stat. Ann. § § 58-21A-3, 58-21A-6. The terms of the mortgage or deed of trust may also require a 30-day pre-foreclosure notice.
Judicial foreclosures. The foreclosing party officially starts a judicial foreclosure by filing a lawsuit (a complaint) in court. It gives notice of the lawsuit by serving the borrower with a summons and the complaint. The borrower gets 30 days to respond to the suit by filing an answer with the court. (Learn more about the difference between a foreclosure summons and complaint.)
If the borrower doesn’t respond to the lawsuit (or responds, but loses the case), the court will grant judgment in favor of the foreclosing party. After the judge issues a judgment of foreclosure, the property will be sold to satisfy the mortgage debt. After the court issues a foreclosure judgment, the sale may not occur for 30 days. N.M. Stat. Ann. § 39-5-17. A notice of sale must be published in a newspaper for four weeks prior to the sale date and posted publicly. N.M. Stat. Ann. § 39-5-1.
Nonjudicial foreclosures. In a nonjudicial foreclosure, the foreclosing party must record a notice of sale at least 90 days before the sale date in the county where the property is located. N.M. Stat. Ann. § § 48-10-10, 48-10-11. Within five days of recording the notice of sale, the foreclosing party must mail a copy of the notice to the borrower, and within 30 days to certain other parties such as those who request notice. N.M. Stat. Ann. § 48-10-12. It must also publish the notice in a newspaper. N.M. Stat. Ann. § 48-10-11.
New Mexico law provides special foreclosure protections to some military service members and to borrowers who take out a type of loan that is called a “high-cost home loan.” (A high-cost home loan is a particular type of mortgage loan that has certain characteristics and the contract rate or points and fees exceed certain amounts.)
Protections regarding military service members. New Mexico law extends the rights, benefits, and protections of the federal Servicemembers Civil Relief Act to members of the national guard ordered to state active duty for a period of 30 or more consecutive state duty days or to any federally funded duty performed in an operational role for homeland security. N.M. Stat. Ann. § 20-4-7.1.
Protections regarding high-cost home loans. New Mexico's high-cost loan statute prohibits, among other things, a mortgage provision that increases the interest rate after default as well as points or fees in excess of 2% of the principal loan amount. If the mortgage violates the law, the borrower may raise the violations as a counterclaim or defense to foreclosure, or in an action to enjoin (stop) foreclosure. N.M. Stat. Ann. § § 58-21A-5, 58-21A-11.
“Reinstating” is when you catch up on the defaulted mortgage's missed payments (plus fees and costs) in order to stop a foreclosure. (Learn more about reinstatement to avoid foreclosure.)
In New Mexico, the borrower usually gets 30 days to reinstate before the foreclosure starts. Once the foreclosure has started, the borrower may ordinarily cure the default at any time prior to the sale.
The cure will reinstate the borrower to the same position as if the default had never occurred.
In some states, you can redeem (repurchase) your home within a certain period of time after the foreclosure.
For both judicial and nonjudicial foreclosures, New Mexico law gives a borrower nine months to redeem the home after a foreclosure sale. However, the terms of the mortgage or deed of trust can reduce the redemption period to not less than one month. (Most mortgages and deeds of trust contain a provision stating that the redemption period will be one month.) N.M. Stat. Ann. § § 39-5-18, 39-5-19, 48-10-16. (To get details on redemption rights in New Mexico, see Nolo’s article If I lose my home to foreclosure in New Mexico, can I get it back?)
When the total mortgage debt exceeds the foreclosure sale price, the difference is called a “deficiency.” Some states allow the lender to seek a personal judgment (called a “deficiency judgment”) against the borrower for this amount, while other states prohibit deficiency judgments with what are called anti-deficiency laws.
Deficiency judgments and judicial foreclosures. The foreclosing party may obtain a deficiency judgment in a judicial foreclosure.
Deficiency judgments and nonjudicial foreclosures. A deficiency judgment is allowed after a nonjudicial foreclosure if the foreclosing party files a separate lawsuit within six years of the foreclosure sale. Deficiency judgments are, however, prohibited for loans made to low-income households, whose annual income is at or below 80% of the area median income. N.M. Stat. Ann. § 48-10-17. (For a summary of the deficiency law in New Mexico, see New Mexico Laws on Post-Foreclosure Deficiency Judgments.)
The new owner (usually the foreclosing party) can get a writ of assistance to evict the former owner as part of the foreclosure action (judicial foreclosures) or can file a separate lawsuit (nonjudicial foreclosures).