Foreclosures in New Mexico are Judicial, which means that they are handled only through the Court system. A foreclosure transaction would take about 6 months to complete.

Pre-foreclosure Period

In New Mexico the foreclosures are to be processed and ordered only through the court system, because the use of power-of-sale clause is banned in the mortgage agreements in this State. The ban of power-of-sale would mean that the borrower or the trustee cannot advertise for sale of the property and sell the property in order to discharge the mortgage. The lender is not obliged to issue a notice of foreclosure to the borrower, though at times this may be specified as necessary by some mortgage agreements or deeds of trust.

The lender who is in grievance of default of dues has to file a complaint with the local court against the borrower, and all the others who may have, or claim to have, a stake in the property. Once the complaint is accepted by the court a Lis Pendens (Pending Lawsuit) is recorded at the office of the county clerk on the borrower, and the lender has to issue a notice to the borrower to respond to the complaint within a period of 30 days.

The notice to the borrower has to be served to him, or her, in person, and if the borrower cannot be located, the notice is to be published in a local newspaper once a week for four consecutive weeks. The borrower is required to respond within 20 days of the last publication of such a notice in a newspaper, failing which the complaint shall be heard by the court and disposed off by judgment in a mutual agreement of the parties present at the time of hearing.

The borrower may halt the process of pre-closure sale by paying all the costs as per the judgment, along with attorney fees, expenses etc.

Auction Notice

The lender, or his trustee, can initiate the sale proceedings once the judgment is made against the borrower, and the borrower has not satisfied the mortgage costs within the pre-foreclosure period. The minimum interval from judgment to the date of sale is 30 days. During this interim period, the lender is required to publish notice of sale once a week, for four consecutive weeks, in a newspaper with the last notice published at least 3 days before the date of sale.

At the time of the judicial sale, the acceptable bid shall be a minimum of 80 percent of the fair market value of the property. Once the sale is concluded and recorded, the rights of the property shall be transferred to the winning bidder. The judgment debtor, or the borrower, his trustees or stake-holders have the option of redeeming the property – that is take ownership of the property – by placing claim for redemption. The time for redemption is generally one month, and in some cases is extended till nine months. The property can be redeemed by the borrower by paying the entire sale cost along with all other expenses incurred by the lender in the foreclosure procedure, and interests.