How to avoid foreclosure in New Mexico

How foreclosure works in New Mexico, step by step

1. Missed payments and the right-to-cure notice

   After the federal 120-day wait, the lender can sue. But for most owner-occupied home loans, New Mexico's Home Loan Protection Act first requires a written notice of your right to cure the default. It must give you at least 30 days to catch up, tell you the amount, and name a person to contact if you disagree. The lender must accept partial payments made in response to the notice.

   NMSA § 58-21A-6(A)

2. Pre-filing notice and the lawsuit

   Before the court clerk will accept a home foreclosure complaint, the lender must certify that it sent you a list of the loss mitigation options available to you, whether your loan is federally backed, who holds the loan and how to reach the servicer, and a list of places to get help. You are then served with a summons and complaint filed in the district court for your county.

   Rule 1-003.3 NMRA; Form 4-227 NMRA

3. You have 30 days to respond

   The New Mexico Courts self-help center says you have 30 days to file an Answer or a Motion with the court. If you do not respond, the lender can ask for a default judgment without a trial. In your answer you can raise defenses, including any violation of the Home Loan Protection Act.

   NMSA § 58-21A-6(E)

4. Foreclosure Settlement Program

   In residential cases, the court may send an Order of Referral to its Foreclosure Settlement Program. Your case is put on hold (stayed) while a neutral settlement facilitator helps you and the lender talk. You must turn in the Homeowner Information Form by your deadline and complete the lender's loss mitigation application. If no deal is reached, the stay is lifted and the case goes back to the judge.

5. Judgment

   Before the judge can enter a foreclosure judgment on an owner-occupied home, the lender must certify that it tried to engage you in loss mitigation and is not currently negotiating with you. If your mortgage shortens the redemption period, the time to ask the judge to lengthen it is before this judgment is entered.

   Rule 1-054.2 NMRA; NMSA § 39-5-19

6. Sale and confirmation

   The home cannot be sold until at least 30 days after the judgment. During those 30 days you can stop the sale by depositing the full judgment, interest and costs with the district court clerk. Notice of the sale must be published for 4 weeks. After the sale, usually run by a special master, the judge reviews the special master's report and enters an order confirming the sale.

   NMSA §§ 39-5-1, 39-5-17

7. Redemption period and moving out

   After the order confirming the sale is filed, you can buy the home back within 9 months, or within the shorter period your mortgage sets (never less than 1 month). If you are still in the home, the buyer can ask the court for a writ of assistance, which lets the sheriff remove you. Plan your move early and ask about any money left over from the sale.

   NMSA §§ 39-5-18, 39-5-19

New Mexico foreclosure deadlines to know

These are the periods written into the law. Your own dates are on the notices you received. If a notice and this page disagree, trust the notice and ask a counselor or lawyer.

Your rights as a homeowner in New Mexico

Other New Mexico protections

• Right to cure and reinstate under the Home Loan Protection Act

  Before suing on a covered home loan, the lender must send a notice giving you at least 30 days to cure and must accept partial payments. You can still reinstate any time before title is transferred by the foreclosure, with limits on the attorney fees you can be charged.

  NMSA § 58-21A-6

• Court foreclosure required, with defenses preserved

  A lender foreclosing a covered home loan must use the judicial process. In that case you can argue that you were not in default and raise any other defense, including violations of the Home Loan Protection Act.

  NMSA §§ 58-21A-6(E), 58-21A-11

• Pre-filing notice of your options

  The clerk must refuse a residential foreclosure complaint unless the lender certifies that it told you about your loss mitigation options, whether the loan is federally backed, who holds it, and where to get help.

  Rule 1-003.3 NMRA; Form 4-227 NMRA

• No judgment while negotiations are going on

  Before a judge can enter a foreclosure judgment on an owner-occupied 1 to 4 family home, the lender must certify that it tried to engage you in loss mitigation and is not currently negotiating with you.

  Rule 1-054.2 NMRA; Form 4-712 NMRA

• No deficiency for low-income households with a deed of trust

  If your home loan is secured by a deed of trust and your household income was at or below 80 percent of area median income when the loan was made, the lender cannot seek a deficiency judgment or report a deficiency to credit bureaus.

  NMSA § 48-10-17(E)-(H)

New Mexico mortgage assistance programs

If the home is sold for more than you owe

No New Mexico statute opened for this guide sets a separate surplus claim process. Sale money is handled inside your foreclosure case: the special master reports the sale to the court, and the judge's order confirming the sale decides how the money is paid out. If the home sold for more than the judgment and costs, read the report and the order, and ask the court in your case for any amount owed to you. Legal aid or United South Broadway Corporation can help. You do not need to pay a company to claim it.

Ways to avoid foreclosure

Most of your options come from federal rules and from whoever owns or insures your loan, so they work the same way in New Mexico as anywhere else. What changes by state is how much time you have to use them.

• Repayment plan
• Forbearance
• Payment deferral or partial claim
• Loan modification
• Reinstatement
• Short sale
• Deed in lieu of foreclosure
• Chapter 13 bankruptcy