How Foreclosure Works in New Mexico

Mainly judicial. The New Mexico Courts describe New Mexico as a judicial foreclosure state: the lender must file a complaint in district court and prove it is entitled to take the property. For a "home loan" under the Home Loan Protection Act (a loan up to the Fannie Mae conforming limit secured by a borrower's principal residence of one to four units, or a manufactured home used as a principal residence, other than a reverse mortgage or bridge loan), the lender must use judicial foreclosure. New Mexico's Deed of Trust Act also allows a trustee's sale under a power of sale in a deed of trust, and a deed of trust may instead be foreclosed in court like a mortgage.

For a home loan, before filing a foreclosure the lender must deliver a notice of the right to cure stating the default, the amount needed to cure, a cure date at least 30 days after the notice is delivered, what happens if the default is not cured, and a contact for disputes. Once a case is filed, the homeowner is served with a summons and complaint. Before any sale of land under execution or a foreclosure decree, the time and place of sale and a full description of the property must be published for four weeks before the sale in a newspaper in the county and posted in six public places in the county. For a trustee's sale under a deed of trust, the trustee must publish the notice as for mortgage foreclosures, record it with the county clerk and mail copies to anyone who has recorded a request for notice.

The statutes set these minimum steps rather than an overall timeline: for a home loan, at least 30 days between the notice of right to cure and the cure deadline before a foreclosure can be filed; 30 days for the homeowner to answer the summons and complaint (as described by the New Mexico Courts); and publication of the sale notice for four weeks before a judicial sale. The New Mexico Courts say a foreclosure case can take several months before the court makes a final decision.

Yes, for home loans. The borrower may cure the default by the date in the notice (at least 30 days after delivery) to avoid a foreclosure filing, and the lender must accept partial payments made in response to the notice. Even after the loan is accelerated, the borrower may cure the default and reinstate the loan at any time before title is transferred by foreclosure; the cure puts the borrower back in the same position as if no default had occurred. Fees are limited: no attorney fees for the 30-day notice period, no more than $100 in attorney fees after that period but before a foreclosure is filed, and only reasonable, actually incurred attorney fees after filing.