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AN ACT

RELATING TO REAL ESTATE DEEDS OF TRUST; DESIGNATING PRIORITY

AND TIME PERIODS FOR REDEMPTION RIGHTS AFTER JUDICIAL

FORECLOSURE; AMENDING THE DEED OF TRUST ACT; DECLARING AN

EMERGENCY.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF NEW MEXICO:

Section 1. Section 39-5-18 NMSA 1978 (being Laws 1931,

Chapter 149, Section 2, as amended) is amended to read:

"39-5-18. REDEMPTION OF REAL PROPERTY SOLD UNDER

JUDGMENT OR DECREE OF FORECLOSURE--NOTICE AND HEARING--

REDEMPTION AMOUNT--PRIORITY OF REDEMPTION RIGHTS.--

A. After sale of real estate pursuant to the

order, judgment or decree of foreclosure in the district

court, the real estate may be redeemed by the former defendant

owner of the real estate or by any junior mortgagee or other

junior lienholder whose rights were judicially determined in

the foreclosure proceeding:

(1) by paying to the purchaser, at any time

within nine months from the date of sale, the amount paid at

the sale, with interest from the date of sale at the rate of

ten percent a year, together with all taxes, interest and

penalties thereon, and all payments made to satisfy in whole

or in part any prior lien or mortgage not foreclosed, paid by

the purchaser after the date of sale, with interest on the

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taxes, interest, penalties and payments made on liens or

mortgages at the rate of ten percent a year from the date of

payment; or

(2) by filing a petition for redemption in

the pending foreclosure case in the district court in which

the order, judgment or decree of foreclosure was entered and

by making a deposit of the amount set forth in Paragraph (1)

of this subsection in cash in the office of the clerk of that

district court, at any time within nine months from the date

of sale. Copies of the petition for redemption shall be

served upon the purchaser of the real estate at the judicial

foreclosure sale and upon all parties who appeared in the

judicial foreclosure case; and

(3) the former defendant owner shall have

the first priority to redeem the real estate. If the former

defendant owner does not redeem the real estate as provided in

this subsection, each junior mortgagee or junior lienholder

shall have a right to redeem the real estate. The order of

priority of such redemption rights shall be the same priority

as the underlying mortgages or liens, as set forth in the

court order, judgment or decree of foreclosure or as otherwise

determined by the court. All redemptions must be made within

the time periods set forth in Paragraphs (1) and (2) of this

subsection.

B. The purchaser of real estate at a foreclosure

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sale, upon being served with the petition for redemption of

the property, shall answer the petition within thirty days

after service of the petition.

C. The hearing shall be governed by the rules of

civil procedure and shall be set upon the earlier of the

filing of a redemption by the former defendant owner or the

expiration of the period for filing a redemption. At the

hearing, the judge shall determine the amount of money

necessary for the redemption, which shall include the money

paid at the sale and all taxes, interest, penalties and

payments made in satisfaction of liens, mortgages and

encumbrances. If more than one redemption is filed, the court

shall also determine which redemption has priority pursuant to

Subsection A of this section and which party is therefore

entitled to redeem the property. At the conclusion of the

hearing, the district court may order the clerk of the court

to issue the certificate of redemption upon such terms and

conditions as it deems just.

D. As used in this section, the terms "owner",

"junior mortgagee", "junior lienholder" and "purchaser"

include their respective personal representatives, heirs,

successors and assigns.

E. For the purpose of this section, "date of sale"

means the date the district court order confirming the special

master's report is filed in the office of the clerk of the

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court.

F. The nine-month redemption period provided in

this section is subject to modification pursuant to the

provisions of Section 39-5-19 NMSA 1978.

G. A trustee's sale pursuant to a power of sale in

a deed of trust as provided in the Deed of Trust Act is not a

sale of real estate pursuant to a judgment or decree of a

court. A redemption after a trustee's sale is governed by the

Deed of Trust Act."

Section 2. Section 48-10-11 NMSA 1978 (being Laws 1987,

Chapter 61, Section 11, as amended) is amended to read:

"48-10-11. NOTICE OF TRUSTEE'S SALE.--

A. The trustee shall give written notice of the

time and place of sale, legally describing the trust real

estate to be sold, by each of the following methods:

(1) publication of the notice as provided by

law for foreclosure of mortgages on real estate;

(2) recording of the notice in the office of

the clerk of each county in which the trust real estate is

situated; and

(3) giving notice as provided in

Section 48-10-12 NMSA 1978 to the extent applicable.

B. The sale shall be held at the time and place

designated in the notice of sale on a day other than a

Saturday, Sunday or legal holiday and at the time provided by

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law for the foreclosure sale of real estate under real estate

mortgages on the front steps of the courthouse of the county

in which the trust real estate is located. If the trust real

estate is located in more than one county, the sale may be

held in any county in which part of the trust real estate is

located.

C. The notice of sale shall contain the street

address, if any, or identifiable location as well as the legal

description of the trust real estate. Failure to accurately

describe within the notice either the street address or the

identifiable location of the trust real estate to be sold

shall not be grounds for invalidating the sale if the correct

legal description of the trust real estate to be sold was

contained in the notice of sale. The notice of sale shall be

sufficient if made in substantially the following form:

"NOTICE OF TRUSTEE'S SALE

The following legally described trust real estate

will be sold, pursuant to the power of sale as

provided in the deed of trust recorded in book

_______________ at page _______,

___________________ County, New Mexico, records, at

public auction to the highest bidder on the front

steps of the county courthouse in

_____________________ County, New Mexico, in or

near _____________________________, New Mexico, on

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_________________, 20____, at ______________

o'clock ___m. of that day:

(street address, if any, or identifiable location

of trust real estate and legal description of

trust real estate)

Dated this ____________ day of

____________________, 20_____.

_________________________ ________________________

(Name of Trustor) (Name of Trustee)

________________________________

Signature

(Here add Acknowledgment)."."

Section 3. Section 48-10-13 NMSA 1978 (being Laws 1987,

Chapter 61, Section 13, as amended) is amended to read:

"48-10-13. SALE BY PUBLIC AUCTION--POSTPONEMENT OF

SALE.--

A. On the date and at the time and place

designated in the notice of sale, the trustee shall sell the

trust real estate at public auction for cash to the highest

bidder. To determine the highest bidder, the trustor or

beneficiary present at the sale may suggest the then existing

and legally described and established lots, blocks, tracts or

parcels of the trust real estate in which the trust real

estate may be sold. The trustee shall ascertain all such

suggestions, shall conditionally sell the trust real estate

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under each suggestion and, in addition, shall sell the trust

real estate as a whole. The trustee shall determine which

conditional sale results in the highest total price bid for

all of the trust real estate. The lawyer for the trustee may

conduct the sale and may act at the sale as the auctioneer for

the trustee. Any person, including the trustee or

beneficiary, may bid at the sale. Only the beneficiary may

make a credit bid, instead of cash, at the sale. A junior

encumbrancer may bid the amount or value of the obligation

secured by the lien, mortgage, encumbrance or real estate

contract, as the case may be, owed to the junior encumbrancer,

less the amount or value of any prior deeds of trust,

mortgages, liens, encumbrances or real estate contracts, if

any, instead of cash, at the sale. In appropriate

circumstances, the trustee may sell the trust real estate

subject to prior deeds of trust, mortgages, liens,

encumbrances or real estate contracts that are not being

foreclosed. Every bid shall be deemed an irrevocable offer

until the sale is completed and the sale shall not be deemed

completed until the purchaser pays the price bid in

immediately collectible or available federal funds. If the

purchaser fails to pay the amount bid by the purchaser for the

trust real estate struck off to the purchaser at the sale as

provided in the Deed of Trust Act, the trustee may accept the

next highest bid or proceed with the sale of the trust real

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estate to the highest bidder. The person who fails to make

the payment shall be liable to any person who suffers loss or

expenses, including reasonable attorney fees actually incurred

by the trustee and beneficiary occasioned by the failure, and

the trustee may subsequently in any postponed or continued

sale of the trust real estate reject any bid of the person

failing to pay the amount bid.

B. The person conducting the sale may, for the

purpose of verifying the proper amount to be paid or the

availability of immediately collectible federal funds,

postpone or continue the sale for a reasonable period by

giving notice of the new time by public declaration at the

time and place last appointed for the sale. No other notice

of the postponed or continued sale is required."

Section 4. Section 48-10-14 NMSA 1978 (being Laws 1987,

Chapter 61, Section 14) is amended to read:

"48-10-14. PAYMENT OF BID--TRUSTEE'S DEED.--

A. The purchaser at the sale, other than the

beneficiary or the beneficiary's personal representatives,

successors or assigns, to the extent of the credit bid of the

purchaser, shall immediately pay the price bid. Upon receipt

of payment of the price bid by the trustee in collected

federal funds, the trustee shall execute and deliver the

trustee's deed to the purchaser. The trustee's deed shall

raise the presumption of compliance with the requirements of

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the Deed of Trust Act relating to the exercise of the power of

sale and the sale of the trust real estate, including

recording, mailing, publishing and posting of notice of sale

and the conduct of sale, in favor of subsequent purchasers,

mortgagees or encumbrancers for value and without actual

notice.

B. The trustee's deed shall operate to convey to

the purchaser the title, interest and claim of the trustee,

the trustor, the beneficiary, their respective successors in

interest and of all persons claiming the trust real estate

sold by or through them, including all interest or claim in

the trust real estate acquired after the recording of the deed

of trust and before delivery of the trustee's deed. The

conveyance shall be clear of the interests of junior

encumbrancers in the trust real estate whose interests have

been effectively foreclosed by the proceeding."

Section 5. Section 48-10-16 NMSA 1978 (being Laws 2006,

Chapter 32, Section 6) is amended to read:

"48-10-16. REDEMPTION.--

A. Except as otherwise provided in Subsection E of

this section, the redemption period after a trustee's sale

shall be nine months, or the period provided in the deed of

trust, whichever is the lesser period, and shall begin to run

from the date of the trustee's sale. In the deed of trust,

the parties may shorten the redemption period to not less than

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one month.

B. After the sale of trust real estate pursuant to

Section 48-10-13 NMSA 1978, the trust real estate may be

redeemed by the trustor or any junior encumbrancer:

(1) by paying to the purchaser at any time

within the redemption period, the amount paid at the sale,

with interest from the date of sale at the rate of ten percent

a year, together with all taxes, interest and penalties

thereon, and all payments made to satisfy in whole or in part

any prior lien or mortgage not foreclosed, paid by the

purchaser after the date of sale, with interest on the taxes,

interest, penalties and payments made on liens or mortgages at

the rate of ten percent a year from the date of payment; or

(2) by filing a petition for redemption in

the district court in the county where the trustee's sale was

held and by making a deposit of the amount set forth in

Paragraph (1) of this subsection in cash in the office of the

clerk of that district court at any time within the redemption

period. Copies of the petition for redemption shall be served

upon the purchaser of real estate under a trustee's sale; and

(3) the trustor shall have the first

priority to redeem the real estate sold under a trustee's

sale. If the trustor does not redeem the real estate as

provided in this section, each junior encumbrancer shall have

a right to redeem the real estate. The order of priority of

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such redemption rights shall be the same priority as the

underlying junior encumbrances, as agreed by the parties or as

otherwise determined by the court. All redemptions must be

made within the redemption period.

C. The purchaser of real estate under a trustee's

sale, upon being served with the petition for redemption of

the property, shall answer the petition within thirty days

after service of the petition.

D. The hearing shall be governed by the rules of

civil procedure. After the case is filed, the hearing shall

be set upon the earlier of the filing of a petition for

redemption by the trustor or the expiration of the redemption

period. At the hearing, the judge shall determine the amount

of money necessary for the redemption, which shall include the

money paid at the sale and all taxes, interest, penalties and

payments made in satisfaction of liens, mortgages and

encumbrances. If more than one redemption is filed, the court

shall also determine which redemption has priority pursuant to

the provisions of Subsection B of this section and which party

is therefore entitled to redeem the property. At the

conclusion of the hearing, the district court may order the

clerk of the court to issue the certificate of redemption upon

such terms and conditions as the district court deems just.

E. A junior encumbrancer who does not have actual

notice or knowledge of the trustee's sale and who has been

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otherwise omitted from the trustee's sale proceeding shall be

entitled to redeem the trust real estate by petitioning the

district court in the county where the trustee's sale was held

and making a deposit of the amount set forth in Paragraph (1)

of Subsection B of this section. The action shall proceed as

provided in Subsections C and D of this section. The

purchaser of the trust real estate at the trustee's sale may

petition the district court to terminate the right of

redemption of an omitted junior encumbrancer. In any action

commenced pursuant to the provisions of this subsection by or

against an omitted junior encumbrancer, the redemption period

shall be the period provided in Subsection A of this section,

except that the redemption period shall begin to run from the

date the final judgment is filed in the action, or from such

later date as may be ordered by a court having jurisdiction:

(1) if enforcement of a judgment affecting

the redemption is stayed on appeal; or

(2) for other good cause shown.

F. As used in this section, the terms "trustor",

"beneficiary", "junior encumbrancer" and "purchaser" include

their respective personal representatives, heirs, successors

and assigns."

Section 6. Section 48-10-17 NMSA 1978 (being Laws 1987,

Chapter 61, Section 17, as amended) is amended to read:

"48-10-17. ACTION TO RECOVER BALANCE AFTER SALE OR

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FORECLOSURE ON TRUST REAL ESTATE AS PROVIDED IN DEED OF

TRUST--ACTION TO RECOVER BALANCE PROHIBITED ON LOANS SECURED

BY LOW-INCOME HOUSEHOLDS.--

A. Except as provided in Subsections D and E of

this section, within six years after the date of a trustee's

sale of trust real estate under a deed of trust as provided in

the Deed of Trust Act, a separate civil action may be

commenced to recover a deficiency judgment for the balance due

on the contract for which the deed of trust was given as

security. The deficiency judgment shall be for an amount

equal to the sum of the total amount owing the beneficiary or

the beneficiary's personal representatives, successors or

assigns as of the date of the sale, as determined by the

court, and, if applicable, the amount owing on all prior

mortgages, deeds of trust, liens and encumbrances and real

estate contracts with interest less the sale price at the sale

by the trustee of the trust real estate. Any deficiency

judgment recovered shall include interest on the amount of the

deficiency from the date of the sale at the rate provided in

the deed of trust or contract, together with any costs of the

action.

B. If no action is commenced for a deficiency

judgment as provided in Subsection A of this section, the

proceeds of the sale, regardless of amount, shall be deemed to

be in full satisfaction of the debt and no right to recover a

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deficiency in any separate civil action shall exist.

C. Except as provided in Subsections D and E of

this section, the Deed of Trust Act does not preclude a

beneficiary or a trustee or their respective personal

representatives, successors or assigns from foreclosing a deed

of trust in the same manner provided by law for the

foreclosure of mortgages on real estate.

D. A deed of trust may prohibit the recovery of

any balance due after the trust real estate is sold at a

trustee's sale or after the deed of trust is foreclosed in the

manner provided by law for the foreclosure of mortgages on

real estate.

E. No deficiency judgment shall be sought or

obtained under any deed of trust securing a residential loan

made to a low-income household.

F. No deficiency in recovery of any balance due

after the sale at a trustee's sale or a judicial foreclosure

sale of trust real estate under a deed of trust securing a

residential loan made to a low-income household shall be

reported to any credit reporting agencies or disclosed to any

person other than the trustor or the trustor's personal

representatives, unless the disclosure is required by law.

G. For the purposes of Subsections D, E and F of

this section:

(1) "low-income household" means a

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household in which the current annual income is at or below

eighty percent of the area median income adjusted for family

size as determined by the United States department of housing

and urban development and calculated pursuant to the United

States department of housing and urban development part 5

guidelines; and

(2) "residential loan" means a loan the

primary purpose of which is the purchase or finance of a

permanent dwelling located in New Mexico and which is

primarily secured by a deed of trust encumbering the dwelling

and related trust real estate.

H. The determination of whether a household is a

low-income household and whether a loan is a residential loan

shall be made as of the time the loan is made on the basis of

information obtained during the loan application process."

Section 7. APPLICABILITY.--

A. The provisions of Laws 2006, Chapter 32 shall

apply to deeds of trust executed on or after May 17, 2006.

B. The provisions of this act shall apply to deeds

of trust executed on or after the effective date of this act.

Section 8. EMERGENCY.--It is necessary for the public

peace, health and safety that this act take effect

immediately.

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