New Mexico foreclosure laws: how the process works and how long it takes

• NMSA 1978 § 48-10-1 et seq.: Lets a deed of trust give the trustee a power of sale after a default, so some loans can be foreclosed by trustee's sale outside court. Home loans covered by the Home Loan Protection Act must still be foreclosed in district court.
• NMSA 1978 § 39-5-1 et seq.: Governs foreclosure sale procedures and the post-sale right of redemption. Section 39-5-18 establishes a 9-month redemption period after judicial sale, which the mortgage can shorten to as little as 1 month (§ 39-5-19). Also covers sale confirmation, surplus funds, and deficiency proceedings.
• NMSA 1978 § 58-21A-6: For a home loan covered by the Home Loan Protection Act, the lender must deliver a notice of the right to cure before filing a foreclosure, with a cure date at least 30 days after the notice is delivered. The borrower can cure the default and reinstate the loan any time before title is transferred through foreclosure, and covered home loans must be foreclosed in court.
• NMSA 1978 § 58-21A-1 et seq.: One of the earliest state predatory lending laws (2003). Prohibits predatory lending practices including loan flipping, equity stripping, and financing of excessive fees. Provides borrowers with affirmative claims and defenses in foreclosure. Applies to 'home loans': loans up to Fannie Mae's conforming loan limit on a one- to four-family home or manufactured home that is the borrower's principal residence (reverse mortgages and bridge loans are excluded).
• NMSA 1978 § 42-10-9: Establishes a homestead exemption of $150,000 (adjusted for inflation every two years starting July 1, 2025) in a home a person owns and uses as their primary residence. Protects equity in the homeowner's primary residence from judgment creditors. Does NOT protect against mortgage foreclosure.
• NMSA 1978 § 39-5-18: Establishes a 9-month post-sale redemption period after judicial foreclosure, which the mortgage can shorten to as little as 1 month (§ 39-5-19). The former owner, or a junior lienholder whose rights were decided in the foreclosure case, may redeem the property by paying the sale price plus 10% annual interest and certain taxes and lien payments the buyer made.

The court's order confirming the special master's sale report starts the redemption period. When a court order or judgment gives the buyer possession, the buyer can get a writ of assistance from the court clerk to enforce it. The federal Protecting Tenants at Foreclosure Act provides 90-day notice to bona fide tenants.

Surplus proceeds from the foreclosure sale (above the debt, costs, and junior liens) belong to the former owner. The court distributes surplus according to lien priority. Contact the court or your attorney to claim surplus funds.

Generally first in time, first in right under New Mexico recording statutes. New Mexico is a race-notice state. Property tax liens have priority over all other liens including first mortgages. The state can sell property for delinquent taxes.

6-year statute of limitations for actions on written contracts (including mortgages) in New Mexico under NMSA § 37-1-3. However, the statute may be tolled or extended under certain circumstances. Consult a local attorney. In a court foreclosure, the deficiency judgment can be entered in the foreclosure case after the court confirms the sale. After a trustee's sale under a deed of trust, a separate deficiency action can be filed within 6 years of the sale; if none is filed, the sale proceeds count as full payment of the debt. No deficiency can be sought under a deed of trust securing a residential loan made to a low-income household. Consult a local attorney.

• Unpaid property taxes: Property tax liens have priority over mortgage liens in New Mexico. The state tax department, or an auctioneer it hires, sells tax-delinquent property at a public auction held in the county, no sooner than 3 years after the taxes became delinquent. Paying all delinquent taxes, penalties, interest and costs, or entering an installment agreement and keeping up the payments, by 5:00 p.m. the day before the sale prevents the sale. The buyer gets a deed on payment, and after 2 years from the sale the former owner can no longer sue to challenge it. Contact the county treasurer for specific procedures.

$150,000 under the statute ($300,000 for a person whose spouse died within the prior two years and could have claimed it), adjusted for inflation every two years starting July 1, 2025. Protects equity in your primary residence from judgment creditors. Does not stop mortgage foreclosure. New Mexico's homestead exemption is $150,000 under the statute, adjusted for inflation every two years starting July 1, 2025. The exemption is relevant if a deficiency judgment is pursued, as it protects home equity (in any future home) from general creditors. The exemption does not protect against mortgage foreclosure itself.

New Mexico extends the rights and protections of the federal SCRA to National Guard members ordered to state active duty for 30 or more consecutive days, or to federally funded homeland-security duty under 32 U.S.C. 502 (NMSA 1978 § 20-4-7.1). Under the federal SCRA, a mortgage taken out before active duty generally can't be foreclosed without a court order while you are on active duty and for 12 months after, and you can ask for a 6% interest rate cap during active duty and for a year after. New Mexico has Kirtland Air Force Base (Albuquerque), Holloman Air Force Base (Alamogordo), Cannon Air Force Base (Clovis), and White Sands Missile Range. Military families should contact their installation legal assistance office immediately if facing foreclosure.

New Mexico borrowers face potential tax liability at both federal and state levels. New Mexico law does not require a fair market value credit on a deficiency. Community property may affect how income from canceled debt is reported between spouses.