New Mexico foreclosure laws require that foreclosures are handled through the court system. This is called a Judicial Foreclosure. The typical foreclosure process lasts about six months. Borrowers are allowed a redemption period.
Before the foreclosure begins, the borrower must receive a Notice of the Right to Cure, (NRC), and some homeowners get access to programs designed to help them avoid foreclosure. The lender must deliver a notice of the right to cure the default to the borrower a minimum of 30 days before filing the lawsuit. The notice must contain the following information:
- the nature of the default
- the right to cure the default by paying past-due amounts, including the amount of any unpaid interest and late fees, as well as any interest and late fees that will accrue within 30 days.
- the date by which the homeowner must cure the default to avoid a foreclosure lawsuit.
- the impending lawsuit.
This information is usually included in the Breach Letter.
In a New Mexico foreclosure, the borrower generally gets the right to:
- receive pre-foreclosure notice
- apply for loss mitigation
- get notice of the foreclosure and the chance to respond in court
- get current on the loan and stop the foreclosure sale
- receive special protections if you’re in the military
- pay off the loan to prevent a sale
- redeem the property after the sale
- file for bankruptcy, and
- get any excess money after a foreclosure sale.
Notice of Sale & Auction
Once the court rules against a borrower, the lender or the lender’s trustee is responsible for publishing a Notice of Sale, (NOS), once a week for four weeks in a local newspaper of the county where the property is located. The sale must be scheduled no earlier than 30 days after the court ruling. The final publication of the notice must occur a minimum of three days before the date of the sale.
New Mexico foreclosure law states that in order for a bid to be eligible, it must be a certain percentage or higher of the appraised value of the property. Currently that value is 67 percent (two-thirds) of the appraised value.
In a New Mexico Foreclosure, the former property owners have the right to redeem the property within nine months of the foreclosure sale if they pay the full sum owed on the delinquent loan, taxes, and interest. The only caveat to that is when mortgage lenders include more stringent terms in their loan documents which can shorten this window of opportunity to as little as 30 days.
Lenders are also allowed deficiency judgments against borrowers whose properties sell for less than is owed on the mortgage in most cases.
Former owners who remain in the homes after the foreclosure sale are normally evicted by separate lawsuit. However, if the lender included a Writ of Assistance in the judicial foreclosure process, they may be evicted as part of that process.