For homeowners facing foreclosure in New Mexico, the following is a summary of the state’s foreclosure laws:
Foreclosures in New Mexico can be judicial, meaning the bank must file a lawsuit in court in order to foreclose.
Foreclosures in New Mexico can also be nonjudicial but a court must confirm the sale.
New Mexico law requires three foreclosure notices:
- Before the foreclosure, some homeowners will receive a notice of default that allow 30 days to cure the default and avoid a foreclosure. The terms of the mortgage may also require a 30-day pre-foreclosure notice.
- The bank officially starts a judicial foreclosure by filing a foreclosure lawsuit in court. It then sends notice of the foreclosure lawsuit by serving the homeowner with a summons and the complaint. The homeowner has 30 days to respond to the lawsuit by filing an answer with the court. If the homeowner doesn’t respond to the foreclosure lawsuit or responds, but loses the case, the court will rule in favor of the bank. After the judge issues a judgment of foreclosure, the property will be sold to pay the mortgage debt. After the foreclosure judgment, the sale cannot occur for 30 days. A notice of sale must be published in a local newspaper for four weeks before the sale date and posted publicly.
- In a nonjudicial foreclosure, the bank must record a notice of sale at least 90 days before the foreclosure sale date in the county where the property is located. Within five days of recording the notice of sale, the bank must send a copy of the notice to the homeowner, and within 30 days to other interested parties.
New Mexico Foreclosure Protections
New Mexico law provides protections in accordance with the federal Service Members Civil Relief Act.
New Mexico foreclosure law also provides protections to members of the national guard ordered to state active duty for a period of more than 30 consecutive state duty days or to any federally funded duty related to homeland security.
The state’s high-cost loan statute does not allow mortgage provisions that increases the interest rate after default, or fees in excess of 2% of the principal loan amount. If the mortgage violates the law, the homeowner can use the violations as a defense against foreclosure, or in an action to stop foreclosure.
Reinstatement and Redemption
In New Mexico, the homeowner has 30 days to reinstate before the foreclosure starts. Once the foreclosure has started, the homeowner can cure the default at any time prior to the sale. The cure will automatically reinstate the homeowner.
For both judicial and nonjudicial foreclosures, New Mexico law allows homeowners nine months to redeem the home after a foreclosure sale. However, the terms of the mortgage can reduce the redemption period to not less than one month.
In New Mexico, The bank can request a deficiency judgment in a judicial foreclosure.
In nonjudicial foreclosures, a deficiency judgment is allowed if the bank files a lawsuit within six years of the foreclosure sale. Deficiency judgments are not allowed for loans made to low-income households, whose annual income below 80% of the average area household income.
The new homeowner can get a writ of assistance to evict the former homeowner as part of the foreclosure action in judicial foreclosures or they can file a separate lawsuit in nonjudicial foreclosures. For information regarding how to avoid foreclosure in New Mexico, visit HUD.gov.