Foreclosure in New Mexico

How a New Mexico foreclosure works, step by step

1. Generally, the legal foreclosure process can't start until you're at least 120 days behind on your mortgage.
2. Before filing, the lender must give you a pre-filing notice listing the loss mitigation options your loan's owner offers and what you must do to be considered for them, along with a list of places you can contact for help. The court clerk won't accept a home foreclosure complaint unless the lender files the required certification with it.
3. For a home loan, the lender must also send you a notice of your right to cure the default before it sues. The notice must give you a date to catch up that's at least 30 days after you get it.
4. The lender files a complaint in district court. The summons gives you 30 days to respond. If you don't file an answer or a response, the lender can ask the court to let it win automatically, called a default judgment.
5. Depending on your judicial district, the case may be sent to mandatory mediation, which puts the foreclosure on hold until that process ends.
6. Before the court can enter a judgment of foreclosure on your home, the lender must file a certification about the absence of loss mitigation talks with you.
7. The home is sold at a public auction, between nine in the morning and sunset, after the time, place and a full description of the property have been published for four weeks before the sale.
8. The court then enters an order confirming the special master's report of the sale. The date that order is filed counts as the date of sale.
9. You can redeem, meaning buy the home back, within nine months of that date by paying the buyer the sale price plus interest at ten percent a year, along with taxes and related charges.

The courts' Foreclosure Settlement Program

The Statewide Foreclosure Settlement Program helps homeowners and lenders reach agreements, and the courts say most of its cases end in loan modifications. It's a court-ordered settlement program for residential foreclosure cases. The courts are working to expand it statewide.

• While you're in the program, the foreclosure case is put on hold so you and the lender can try to settle.
• The settlement facilitator costs you nothing, but isn't your lawyer and doesn't represent you.
• You'll need to fill out a loss mitigation application and send in the financial documents it asks for.
• The process generally takes several months.
• Under federal rules, your servicer must evaluate a complete application it gets more than 37 days before a sale.

If the court sends your case to the program, show up and turn in the paperwork on time. In my view, it's one of the best chances you'll get to work things out with your lender.

Catching up before the sale: your right to cure

New Mexico's Home Loan Protection Act protects home loans, which include loans on a home built for one to four families that you live in as your main home. For these loans, the lender must use the court process to foreclose.

• You can cure the default and reinstate the loan at any time before title is transferred by the foreclosure.
• Curing puts you back in the same position as if you had never defaulted.
• The lender must accept a partial payment you make in response to the cure notice.

The special master's sale

New Mexico law says a court-ordered sale must be a public auction, held between nine in the morning and sunset. The time, place and a full description of the home must be published for four weeks before the sale. Afterward, the court enters an order confirming the special master's report, and the date that order is filed is the date of sale for redemption.

Some loans use a deed of trust instead, and under the Deed of Trust Act, the trustee has a power of sale, but can't use it until 90 days after the notice of sale is recorded. A home loan covered by the Home Loan Protection Act, though, must go through the courts.

How long it takes

Foreclosure generally can't legally start until you're at least 120 days behind. Once it starts, how long you have until the sale depends on your state.

For FHA loans, HUD's time frame runs from the first legal action until the lender has clear title to the home and possession of it. In New Mexico, that's 25 months, and the first legal action is a court complaint.

Inside that, a home loan's cure notice gives you at least 30 days, the summons gives you 30 days to respond, and the sale notice is published for four weeks. After the court confirms the sale, redemption can run another nine months.

These are official markers, not a forecast. Your case can move faster or slower, so don't count on extra time.

After the sale: redemption and deficiency

As the former owner, you have the first right to redeem. Your mortgage can shorten the redemption period to as little as one month. But if you show the court before judgment that you will redeem, it can lengthen the period again, up to nine months.

Some foreclosure complaints are filed in rem, which means the lender isn't asking for any money judgment against you. Under the Deed of Trust Act, a lender can file a separate lawsuit for a deficiency within six years after a trustee's sale. No deficiency judgment can be sought under a deed of trust on a residential loan made to a low-income household, meaning one whose income is at or below 80 percent of the area median income, adjusted for family size.

Read your complaint to see whether the lender is asking for a money judgment. And ask the court clerk about any money left over after the sale.

Offers to help or to buy: New Mexico's foreclosure consultant law

Under the Mortgage Foreclosure Consultant Fraud Prevention Act, a foreclosure consultant is someone who, for pay, says they can postpone a foreclosure sale or provide similar services.

• A consultant can't collect any fee until every promised service is fully done.
• You must get the contract to review for at least a 24-hour period before you sign it.
• You can cancel until midnight of the third business day after you sign.
• A consultant can't acquire any interest in your home.
• You can't sign away these rights. A waiver is void.
• Breaking these rules is a fourth degree felony.
• The law covers a home that's behind on a loan or debt secured by it, including contract for deed payments.
• Its definition of a foreclosure reconveyance includes deals where the buyer offers you an interest back so you can stay, such as a lease, an option to purchase or a contract for deed.
• The law doesn't treat a foreclosure purchaser as a consultant, including someone who buys a home in foreclosure at or after the court sale.
• The CFPB says companies offering mortgage assistance or foreclosure help aren't allowed to collect fees up front. It also warns about schemes that try to get you to sign over title to your home, sometimes called rent to buy.

If any deal, including mine, has you selling and then renting or buying back, take it to a housing counselor before you sign. And don't stop talking to your lender while you weigh any offer, including mine.

Free help in New Mexico

• New Mexico Courts: foreclosure self-help. The court process, step by step, from the state courts.
• Second Judicial District Court: Statewide Foreclosure Settlement Program. Orientation videos and the homeowner form.
• Second Judicial District Court: homeowner help resources. Housing counseling and legal aid contacts listed by the court.
• Housing New Mexico: foreclosure prevention. How to ask for loss mitigation if Housing New Mexico services your loan.
• CFPB: find a housing counselor. Search HUD-approved counseling agencies in New Mexico.