Although the non-judicial process is not used in the case of New Mexico foreclosures it is only allowed if the property is of a commercial or business description and is valued at more than $500 000. So New Mexico is mainly a lien theory state. This means that the property itself secures the underlying loan and the instrument for security used is a mortgage. All residential property will be foreclosed upon by means of the judicial process and no other.
The court orders the borrower to pay the delinquent amount within a certain period or time and if this does not occur, the court order for sale is granted to the lender. Should a lender wish to confer a deed of trust for low income households, they are allowed, but only with the express permission from the borrower.
As the judicial foreclosure process is dependent on court schedules they can take anything from 120 – 180 days to reach completion if they are uncontested and the borrower is not applying for bankruptcy. The Sheriff appraises the value of the property and it is sold at a public auction, it may not sell for less than 2/3 of the appraised value.
Deficiency judgments are allowed in this state however special provisions have been made for low income property. In the instance that low income property is sold due to a foreclosure, no deficiency judgment is allowed. In all other cases it is allowed.
Statutory rights of redemption apply to borrowers in New Mexico and they are able to redeem their property for up to 9 months after the sale has taken place. They would have to pay the full amount due on the unpaid loan, plus all costs related to the foreclosure, taxes and 10% interest.