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How are mortgage liens treated in New Mexico?
New Mexico is known primarily as alien theory state where the property acts as security
for the underlying loan. The document that places the lien on the property is called amortgage. It
should be noted that New Mexico does have anon-judicial foreclosure process however this is rarely used by lenders
in a residential context. Under the New Mexico “Deed of Trust Act” commercial mortgages of $500,000 or more,
or those with specific language to benefit low-income households can be foreclosed using non-judicial means. Borrowers
must explicitly consent to adeed of trust instrument.
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How are New Mexico mortgages foreclosed?
In New Mexico, thelenders go to court in what is known as ajudicial foreclosure proceeding
where the court must issue a final judgment of foreclosure. The property is then sold as part of a publicly noticed sale.
The court with jurisdiction over a foreclosure is known as theDistrict Court in the county in which the property is
located. A complaint is filed in this court along with what is known alis pendens. A lis pendens is a recorded
document that provides public notice that the property is being foreclosed upon.
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What are the legal instruments that establish an New Mexico mortgage?
The documents are known as themortgage,note, and in a commercial transaction, asecurity agreement.
Sometimes the mortgage document is combined with the security agreement. Amortgage is filed to evidence the
underlying debt and terms of repayment, which is set forth in thenote.
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How long does it take to foreclose a property in New Mexico?
Depending on the court schedule, it usually takes approximately 120-180 days to effectuate an uncontested foreclosure.
This process may de delayed if the borrower contests the action, seeks delays and adjournments of hearings, or files forbankruptcy. A notice foreclosure sale must be advertised at least four (4) weeks in advance of any sale and sales
usually take four (4) months after final judgment for foreclosure is granted. The date of sale must be at least 30 days
after thenotice of sale is issued. The Sheriff conducts and appraisal of the property to be sold and no sale can be less
than 2/3rds of the appraised value of the property.
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Is there a right of redemption in New Mexico?
New Mexico has astatutory right of redemption, which would allow a party whose property has been foreclosed to reclaim
that property within nine (9) months after the sale by making payment in full of the sum of the unpaid loan plus costs,
taxes and interest at the rate of 10%.
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Are deficiency judgments permitted in New Mexico?
Yes. Adeficiency judgment may be obtained when a property in foreclosure is sold at a public sale for less than the
loan amount which the underlying mortgage secures. There is a specific provision for deficiency judgments as part ofnon-judicial foreclosures with the exception that no deficiency judgment is permitted in the case of a sale related to low
income property. This means that the borrower still owes thelender for the difference between what the property sold for
at auction and the amount of the original loan. Deficiency judgments are not
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What statutes govern New Mexico foreclosures?
The laws that govern New Mexico foreclosures are found in New Mexico Statutes Annotated (1978); Chapter 48, Articles 48-7-1
to 48-7-24 and Deeds of Trust are governed by Chapter 48, Articles 48-10-1 to 48-10-21.
http://www.conwaygreene.com (Open Chapter 48)
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