In New Mexico mortgages and deeds of trust for residential property must be foreclosed and sold in court due to the ban of power-of-sale clauses in most cases. The lender is not required by the state to notify the owner before initiating the pre-foreclosure process, although the mortgage or deed of trust may sometimes require this.
First, a foreclosure complaint is filed in court against the borrower and will include any other parties who have a stake in the property. Once the complaint has been filed, a Lis Pendens (pending lawsuit) is recorded with the county clerk of the county in which the property is located. The lender gives notice in person to the borrower, who has 30 days to answer the complaint. If the borrower cannot be located and served personally, the lender publishes a notice of the pending lawsuit once a week for four consecutive weeks in a local newspaper. Borrowers have 20 days from the date of the last publication to respond.
If the time limit for the borrower to respond has expired, the court enters a ruling, which can be agreed upon by the parties involved or decided in a hearing.
At any time before the foreclosure sale, the borrower may satisfy the judgment by paying all arrears, costs and attorneys’ fees incurred. This stops the foreclosure proceedings.
Notice of Sale / Auction
If the court rules against the borrower, the lender or the lender’s trustee publishes a notice of sale once a week for four consecutive weeks in a local newspaper. The sale is scheduled a minimum of 30 days after the court ruling and the final publication of the notice occurs at least three days before the date of the sale.
An acceptable bid must be at least 80 percent of the fair market value of the property at the time of the judicial sale. Once the property is sold a deed is recorded, giving the ownership of the property to the winning bidder.
After the sale is approved by the court, the original borrower or other parties with a stake in the property usually have one month to redeem, but for some properties the redemption period can last nine months. Borrowers can redeem the property by filing a notice to redeem and paying the sale price plus taxes and interest.