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Deficiency judgments occur when a homeowner loses their home as a result of the foreclosure process and the price that the bank receives in the foreclose sale is not enough to cover or payback what the homeowner owes on the property. For instance, if a property is worth $200,000 and is sold at a foreclosure sale for $160,000, the difference of $40,00 will be considered the deficiency. There are certain guidelines that will dictate when deficiency judgments are allowed in New Mexico.
Allowability of Deficiency Judgments New Mexico
Foreclosures in New Mexico are carried out via judicial foreclosure. Judicial foreclosure requires that a lender file a complaint for foreclosure against the homeowner. The homeowner will have to file an answer and the parties will then enter the civil litigation process including discovery, motions, and possibly even mediation. Lenders are also required to file a lis pendens at the filing of the foreclosure complaint to make sure others are aware that said property is the subject of litigation. In limited circumstances a lender can obtain a non-judicial foreclosure but these are usually reserved for commercial property loans.
Lenders in New Mexico will be able to obtain deficiency judgments after the sale of the property at a foreclosure. A lender will have to institute a separate action for deficiency by filing with the Clerk’s office in the appropriate court in the county that the property is located in. Debtors will have a nine-month period in which they can redeem their property. This means that if they pay the full mortgage amount they can retake possession.
Seeking Legal Help
Whenever you have any dealings with a mortgage company, especially when it comes to a foreclosure on your home, it is crucial that you seek the advice and guidance of an attorney with real estate experience that is licensed in the state of New Mexico. Only a licensed attorney will be have the knowledge and experience required to assist you in against any deficiency judgments that might be brought against you in the state of New Mexico. Don't ever attempt to handle this process alone, foreclosure statutes can be complicated and only those with expertise in the field will be able to provide you with the assistance you need.
