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American College of Mortgage Attorneys — Partner with the Best®

Formed in 1974, the American College of Mortgage Attorneys (ACMA) is comprised of over 500 lawyers in North America who are experts in mortgage law.

United States

New Mexico

Historically, the primary security instrument used to encumber real estate in New Mexico has been a mortgage. New Mexico's Deed of Trust Act was revised in 2007 in an effort to make it more hospitable to lenders. Some lenders use deeds of trust where permitted by the statute and not otherwise prohibited, with each being enforceable either as a deed of trust through a trustee's sale or as a mortgage through judicial foreclosure, consistent with the provisions of the Deed of Trust Act. Therefore, this summary will cover both mortgages and deeds of trusts. Still, it should be noted, as discussed below, that our Home Loan Protection Act requires judicial foreclosure of deeds of trust securing home loans and, further, that non-judicial foreclosures of deeds of trust on commercial properties in New Mexico are either non-existent or rare.

SECURITY INSTRUMENT USED

To give constructive notice of the mortgage or deed of trust, the instrument must be recorded in the real estate records of the county clerk of each county in which the encumbered real estate is located. Failure to properly acknowledge a document relating to real property renders its recording ineffective. A copy of an instrument may be recorded if the original is not available, provided that the duplicate is accompanied by a properly acknowledged affidavit setting forth the name, phone number and mailing address of the affiant, information establishing that the original instrument would be entitled to be recorded, the reason for the duplicate rather than the original instrument and a statement that the duplicate is a true and correct copy of the original instrument. Legislation enacted in 2021 (effective January 1, 2022) adopted the Revised Uniform Law on Notarial Acts (“RULONA”), with some changes from the official version of the National Conference of Commissioners on Uniform State Laws. Among other state-specific provisions: the New Mexico version permits the performance of notarial acts by attorneys licensed to practice in New Mexico; and an audiovisual recording of a notarial act performed using communication technology must be retained for at least 10 years&nbsp;after the recording is made.&nbsp;

RECORDING REQUIREMENTS

STATUTES TO BE WAIVED

For a mortgage, deed of trust, or other instrument to be eligible for recording, it must be duly acknowledged in accordance with the laws of New Mexico or the jurisdiction in which the instrument was acknowledged. Legislation enacted in 2019 (effective July 1, 2019) sets forth the titles of officers automatically authorized to execute conveyances or encumbrances on behalf of entities formed or organized in New Mexico; such officers include a president and vice president for corporations and limited liability companies, a manager or member manager for limited liability companies and a general partner for a limited partnership. An entity may vary this authority by filing with the county clerk of the county in which the subject real property is located a statement identifying the authorized officers. Due on sale clauses are unenforceable under limited circumstances established by statute. The maximum principal amount secured by the instrument must be stated in the instrument. Prepayment penalties and prohibitions in obligations secured by mortgages, deeds of trust, or other instruments encumbering residences are unenforceable. But these penalties and this prohibition are preempted by federal law for national banks, and New Mexico state banks are granted the same power and authority as national banks, so they are also preempted for these banks.

UNUSUAL TREATMENT OF STANDARD PROVISIONS

A mortgage, deed of trust, or other instrument may secure future advances and the lien attaches upon execution of the instrument and has a priority from the time of recording as to all advances, whether obligatory or discretionary, but the lien shall not exceed at any given time the maximum principal amount stated in the instrument.

SECURING FUTURE ADVANCES

SECURING ADDITIONAL ADVANCES TO PROTECT THE COLLATERAL

A trustee under a deed of trust authorized by statute must be: <ul>
 <li>An organization doing business under the laws of New Mexico as a bank, trust company, savings and loan association, escrow company, or title insurance company, including an agent or underwriter;</li>
 <li>An individual who is a member of the state bar of New Mexico;</li>
 <li>An organization that is licensed, chartered, or regulated by the Federal Deposit Insurance Corporation, the Comptroller of the Currency, the Federal Savings and Loan Insurance Corporation, the Federal Home Loan Bank, the Bureau of Federal Credit Unions, or any successors; or</li>
 <li>The parent corporation of any association or corporation referred to in this subsection or any subsidiary corporation all the stock of which is owned by or held solely for the benefit of any such association or corporation referred to in this subsection.</li>
</ul> No trustee of a deed of trust or parent corporation or subsidiary corporation of a corporate trustee that is a trustee of a deed of trust shall be the beneficiary of the deed of trust.

CORPORATE OR INDIVIDUAL

RESIDENCY REQUIREMENT

The lien of mortgage must be foreclosed through a judicial action. If a borrower defaults, the procedure to collect the indebtedness secured by a mortgage is essentially as follows: <ul>
 <li>Lender demands payment of all past due payments and gives the borrower notice of the default and opportunity to cure.</li>
 <li>If the borrower fails to cure, lender then accelerates payment of the note and a demand is typically made for all principal due under the note, interest, late fees, and expenses, if any. Exercise of any rights under a mortgage or assignment of leases and rents to accelerate all sums due thereunder, upon a default, (1) may be ineffective, absent notice to the mortgagor or borrower of such acceleration, even where the mortgagor or borrower has waived notice of acceleration, Comer v. Hargrave, 1979-NMSC-059, 93 N.M. 170, 598 P.2d 213; and (2) is subject to NMSA 1978, &sect; 55-1-309, which recites that “[a] term providing that one party. . . may accelerate payment or performance or require collateral or additional collateral &lsquo;at will' or &lsquo;when the party deems itself insecure,' or words of similar import, means that the party has power to so accelerate only if that party in good faith believes that the prospect of payment or performance is impaired.”&nbsp; A lender can be held liable for wrongful acceleration where it accelerates, without prior notice or opportunity to cure, even though permitted by the language of the parties' agreement, in certain circumstances.&nbsp; J.R. Hale Contracting Co. v. United N.M. Bank, 1990-NMSC-089, 110 N.M. 712, 799 P.2d 581.</li>
 <li>After the demand expires, a lawsuit may be initiated by filing a complaint naming the borrower and all other parties claiming an interest in or lien upon the real estate including all junior lienholders, each of whom in a state court proceeding have 30 days after they are served to file an answer to the complaint. If no one answers or if everyone answers admitting the indebtedness and the priority of the lien of the mortgage, a judgment can then be entered. If any party takes issue with the debt's validity or amount or the mortgage lien's validity or priority, the matter proceeds as any lawsuit until judgment is entered. At the time of filing the foreclosure complaint, the lender should file a notice of lis pendens in the office of the County Clerk of the county in which the property is located as provided in NMSA 1978, &sect;&nbsp;38-1-14.&nbsp; The recorded notice of lis pendens provides constructive notice to a subsequent purchaser or encumbrancer of the existence of the foreclosure action.</li>
 <li>After the entry of judgment, notice of sale must be published in a newspaper of general circulation in the county where the real estate is located for 4 consecutive weeks. The sale may take place 3 days after the last publication of notice of sale and 30 days after entry of the judgment and decree of foreclosure. After the sale, the court must approve the account of the Special Master of the sale and then the property is deeded to the successful purchaser.</li>
</ul> The lien of a deed of trust may be foreclosed pursuant to the power of sale customarily contained therein, provided that the deed of trust complies with the Deed of Trust Act. As of the 2015 writing of this summary, it is still exceedingly rare for lenders to non-judicially foreclose a deed of trust in New Mexico under the 2007 amendments to the Deed of Trust Act (see topic Security Instrument Used above). Most deeds of trust in New Mexico are foreclosed judicially. Non-judicial foreclosure is too new in New Mexico to have developed a body of experience upon which to be judged. The process, however, is summarized below: <ul>
 <li>Lender demands payment of all past due payments and gives the borrower the opportunity to cure.</li>
 <li>If the borrower fails to cure, lender then accelerates payment of the note and a demand is typically made for all principal due under the note, interest, late fees, and expenses, if any.</li>
 <li>After the expiration of the demand, the trustee gives notice of sale. Notice of sale must be published in a newspaper of general circulation in the county where the real estate is located for 4 consecutive weeks, recorded in the real estate records of each county where the subject real estate is located, and sent to each person holding a record interest in the real estate or who has recorded a request for notice. The sale may take place 90 days after the notice of sale is recorded.</li>
</ul> Pursuant to the Home Loan Protection Act, a creditor or creditor's assignee with a legal right to foreclose on any home loan shall use the judicial foreclosure procedures provided by law and not a trustee's sale. Typical Length of Procedure: The time within which a judicial foreclosure action can be concluded depends upon the case load of the judicial district in which the action is filed and whether the foreclosure is contested. An uncontested foreclosure usually can be completed within 3 to 6 months after the filing of the complaint, but the average time to complete a foreclosure can range from 3 months to 9 months. If the judicial foreclosure is contested, there is no customary time frame. A sale under a power of sale contained in a deed of trust authorized by statute cannot occur before the expiration of 90 days from the recording of the notice of sale. Foreclosure Bid Requirements: Bids must be for cash or its equivalent except that if authorized by the lien instrument or the order of foreclosure, a lienholder may bid as cash all or any portion of its judgment awarded in a judicial foreclosure proceeding, or in a trustee's sale, the lienholder may bid as cash all or a portion of the amount of the obligation secured by its lien.

BRIEF DESCRIPTION OF PROCEDURE

After a judicial or trustee's foreclosure sale of real estate, a former owner of the real estate, the former owner's heirs or personal representative, or a junior lienholder has 9 months from the date of the sale within which to redeem the real estate. The redemption price will be the amount paid by the purchaser at the sale with interest from the date of the purchase at 10% per annum together with all taxes, interest, and penalties thereon, and all payments made to satisfy in whole or in part any prior lien not foreclosed by purchaser with interest on such taxes, interest, penalties, and payments made at 10% per annum from the date of payment. The real estate's former owner has the first right of redemption. Junior lienholders have subsequent rights of redemption in the same priority as the priority of their liens.

REDEMPTION PERIOD AND PRICE

The redemption period cannot be waived, but the terms of the mortgage or deed of trust may shorten the redemption period from 9 months to not less than 1 month.&nbsp; In such cases, however, a district court may, upon a sufficient showing before judgment that redemption will be effected, increase the period of redemption to not to exceed nine months notwithstanding the terms of such instrument.

WAIVER OF REDEMPTION; REDUCTION OF REDEMPTION PERIOD

Except under limited circumstances established by statute, deficiency judgments may be obtained.

DEFICIENCIES

Leasehold estates may be eliminated in a foreclosure action if inferior to the lien of the mortgage or deed of trust being foreclosed.

EFFECT OF FORECLOSURE UPON LEASES

If a promissory note in a residential loan transaction was obtained by a foreclosing lender by endorsement/assignment, the foreclosing lender should ensure that the endorsement/assignment was signed and dated by the endorser/assignor prior to the date of commencement of the foreclosure action.

CHANGES TO PROCESS, ETC., RESULTING FROM RECENT FORECLOSURE LITIGATION

The general usury statute, former NMSA 1978, &sect; 56-8-11.1, was repealed in 1991. The result is that in the absence of a written contract fixing a different rate, the interest ceiling generally is 15% per annum. Commission rates charged by anyone negotiating or securing any loan are limited to 6% for any loan greater than $50,000 (with lesser rates for smaller amounts). Lenders may change a premium or points of not more than 3% of the face amount of an interim construction loan. The recovery of interest on interest prior to judgment is not permitted absent a contract or statute authorizing it.

USURY CEILING

No corporation, limited partnership, or limited or general partner of a limited partnership can plead usury in any action brought on its obligation. Interest rates charged on loan transactions remain subject to common law and Uniform Commercial Code principles on unconscionability.

USURY EXCEPTIONS

Except as otherwise provided when filing a financing statement to perfect a security interest in collateral, if New Mexico law governs the perfection of a security interest or agricultural lien, the office in which to file a financing statement to perfect the security interest or agricultural lien is: <ul>
 <li>the office of the county clerk where a record of a mortgage on the related real property would be recorded if:</li>
</ul> (A) the collateral is as-extracted collateral or timber to be cut; or (B) the financing statement is filed as a fixture filing and the collateral is goods that are or are to become fixtures; or <ul>
 <li>the office of the secretary of state in all other cases, including a case in which the collateral is goods that are or are to become fixtures and the financing statement is not filed as a fixture filing.</li>
</ul> However, the office in which to file a financing statement to perfect a security interest in collateral, including fixtures, of a transmitting utility is the office of the secretary of state. The financing statement also constitutes a fixture filing as to the collateral indicated in the financing statement that is or is to become fixtures.

LOCATION(S) FOR FILING

A mortgage is effective as a financing statement filed as a fixture filing from the date of record if: <ul>
 <li>the goods or accounts are described in the mortgage,</li>
 <li>the goods are or are to become fixtures related to the encumbered real estate,</li>
 <li>the mortgage complies with the requirements for a financing statement, but:</li>
 <li>the mortgage need not indicate that it is to be recorded in the real property records; and</li>
 <li>the mortgage sufficiently provides the name of a debtor who is an individual if it provides the individual name of the debtor or the surname and first personal name of the debtor, and</li>
 <li>the mortgage is recorded.</li>
</ul>

SECURITY INSTRUMENT USED AS FIXTURE FILING

New Mexico is a community property jurisdiction. Local counsel should be consulted for advice on the extent to which spousal joinder is necessary for a guaranty to be enforceable at all (the same holds true for mortgages/deeds of trust, promissory notes, contracts of indemnity, and other loan documents) and/or to be enforceable with respect to specific categories of property, e.g., community property, separate property. The types of property available and the priority order in which such types of property are available to liquidate a guaranty depend on whether the guaranty represents a community debt or a separate debt and whether the debt instrument is signed by one or both spouses. Recourse to a spouse's separate property may not be available unless that spouse signs the note or guaranty. Also, recourse against any community property may be barred unless both spouses sign the guaranty.

UNUSUAL PROVISIONS OR REQUIREMENTS

It is possible that resort to the community property of a married guarantor may be barred unless his or her spouse joins in the guaranty.

SPECIAL PROBLEMS IN ENFORCEMENT

Recovery of a deficiency judgment on a deed of trust securing a residential loan made to a low-income household is prohibited. There is no similar provision governing such mortgages. A “low-income household” is a household in which the current annual income is at or below 80% 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. The determination of whether a household is a low-income household is made as of the time the loan is made on the basis of information obtained during the loan application process. There are no “fair value” limitations on deficiencies, and other limitations are rudimentary: the foreclosing creditor must comply with the statutory requirements of sale, must give notice to all parties, and the winning bid must be of a sufficient amount so as not to “shock the court's conscience” or of a sufficient amount that combined with additional circumstances does not result in unfairness to the debtor. Following a non-judicial sale under a deed of trust, a lender must commence a civil action to recover a deficiency within 6 years from the date of the trustee's sale of the real estate. After the special master's report of a judicial foreclosure sale is confirmed, the foreclosing creditor's attorney files a motion for entry of a deficiency judgment. The Deed of Trust Act provides that the amount of the deficiency after a non-judicial foreclosure shall be an amount equal to the total amount owed to the lender, less the sale price at the nonjudicial sale. The deficiency judgment 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 the costs of the action. The amount of the deficiency in a judicial foreclosure of a mortgage or deed of trust is calculated in a similar manner.

ISSUES AND GUIDELINES RELATED TO SEEKING/OBTAINING DEFICIENCY JUDGMENTS

The statute of limitations for commencing an action for a deficiency judgment after a trustee's sale is 6 years. Similarly, the statute of limitations for actions founded on a note or other contract in writing is 6 years. UCC &sect;&nbsp;3-118 has separate limitations periods and applicable to negotiable instruments. A mortgage or deed of trust may not be foreclosed if suit on the note it secures is barred.

STATUTE OF LIMITATIONS PERIOD

When debt secured by a mortgage or deed of trust has been fully satisfied, it is the duty of the mortgagee, trustee, or assignee to cause the full satisfaction of the debt to be entered of record in the office of the county clerk of the county where the instrument was recorded. There is a penalty for failure to do this and the borrower is entitled to recover attorney fees. An alternative form of release may be filed by a title insurer: if evidence of the full satisfaction has not been recorded within 90 days after the full satisfaction of a debt secured by a mortgage, a title insurer may prepare and record a release; provided, however, no release shall be recorded by the title insurer unless the insurer has, at least 10 days prior to the date of recording, mailed notice of the intent to record to the last known address of the mortgagee, the trustee and beneficiary of a deed of trust, or the assignee of record of the debt or evidence of debt. Except if the debt secured by the mortgage or deed of trust is a series of loans or a line of credit, the debt shall not have been satisfied, even if all sums due thereunder have been paid in full, if the written agreement between the mortgagor or trustor and the mortgagee or beneficiary provides for the securing of a series of loans or a line of credit and the notation “Line of Credit Mortgage” is prominently placed on the mortgage or deed of trust that is recorded. If at any time the obligation secured by the mortgage or deed of trust described in the preceding paragraph is fulfilled, and the balance is zero, the mortgagee or beneficiary shall cause the mortgage or deed of trust to be released of record upon written demand of the mortgagor, trustor, or the successor or assignee thereof. In the event of the death or incompetence of the mortgagor or trustor, the heirs, personal representative, conservator, or guardian of the mortgagor or trustor, as appropriate, may make the demand for release described in this subsection. As to termination of a financing statement, if it covers consumer goods, the secured party shall file a termination statement within 1 month after there is no obligation secured by the collateral covered by the financing statement or, if earlier, within 20 days after the secured party receives an authenticated demand from the debtor. In all other cases involving consumer goods, the secured party shall either send to debtor or file a termination statement within 20 days after the secured party receives an authenticated demand from debtor.

REQUIREMENTS FOR RELEASE OF LIEN

Each person has an exempt homestead in a dwelling house and land occupied by the person or in a dwelling house occupied by the person although the dwelling is on land owned by another, provided that the dwelling is owned, leased, or being purchased by the person claiming the exemption. Such a person has a homestead exemption in the amount of $60,000, and if the homestead is owned jointly by 2 persons, each joint owner is entitled to an exemption of $60,000, but the exemption does not apply or extend to recorded liens of mortgagees. Any resident of the State who does not own a homestead is entitled to exempt real or personal property in the amount of $5,000 in lieu of the homestead exemption. A consensual lien is a waiver of the homestead exemption. A guarantor may waive in advance the homestead exemption.

HOMESTEAD ISSUES

New Mexico is a community property state. Therefore, all property acquired during marriage by either spouse or by both spouses is presumed to be community property. With the exception of purchase money mortgages, both spouses must sign all conveyances, mortgages, leases for terms longer than 10 years, and all contracts to make the same, of real estate that is community property or that is owned by the spouses as tenants in common or as joint tenants. Additionally, a contract of indemnity that is not signed by both spouses does not create recourse to the community property of either spouse. If both spouses do not sign an obligation created after marriage, the interest of the non-signing spouse in the marital residence is not liable for the debt. Due to uncertainties created by New Mexico's community property laws, most lenders require the joinder of both spouses in obligations and encumbrances created by married persons. Generally speaking, a spouse's separate debts must be satisfied first from the spouse's separate property, excluding that in which each spouse own an undivided equal interest as joint tenant or tenant in common, and community debts must first be satisfied first from community property. Dower, curtesy, and tenancies by the entirety have been abolished.

COMMUNITY PROPERTY

MORTGAGE TAX

DOCUMENTARY STAMP TAX

TRANSFER TAX

Courts in New Mexico generally enforce choice of law provisions when the transaction has a reasonable relationship to the jurisdiction whose law is chosen; however, a court will not apply the law of another jurisdiction chosen by the parties if application of such law would violate a fundamental public policy of New Mexico.

ENFORCEABILITY OF AGREEMENTS AS TO CHOICE OF LAW

If the mortgage documents provide that the court may appoint a receiver or if there are other grounds for the appointment of a receiver, such as danger of waste, misapplication of rents, or the like, a court may appoint a receiver to serve under the New Mexico Receivership Act and to take possession of the secured property. It is unusual for a court to appoint a receiver in a residential foreclosure unless the property has been abandoned.

RECEIVERSHIP

Prior to making a mortgage loan in New Mexico, a lender must determine whether it is subject to or exempt from the Mortgage Loan Company Act. If subject to the Act, certain lender activities, including fees and charges that can be collected, are restricted. A lender may charge, take, reserve or receive a premium or points in an amount up to but not exceeding 3% of the face amount of the loan on an interim construction loan.

ANY PROHIBITION OR SPECIAL RULES REGARDING LOAN APPLICATION, LOAN FEES OR COMMITMENT FEES

Unless exempt, a mortgage lender may be subject to the Mortgage Loan Company Act, which requires that a mortgage lender obtain a license from the Financial Institutions Division of the New Mexico Regulation and Licensing Department. Unless exempted, an individual may engage in the business of mortgage loan origination with respect to any dwelling in New Mexico only by obtaining and maintaining an annual license pursuant to the New Mexico Mortgage Loan Originator Licensing Act. All licenses expire December 31 of each year and must be renewed each year. A loan processor or underwriter who is an independent contractor shall not engage in the activities of a loan processor or underwriter unless the independent contractor loan processor or underwriter obtains and maintains a license. A mortgage loan originator licensed in a different state may be granted a valid license for 90 days while the mortgage loan originator completes the education and testing requirements of the Act. A mortgage loan originator license may be issued as long as the applicant has fulfilled several criteria, including completing the pre-licensing education requirements and passing a written test. The minimum standards for license renewal for mortgage loan originators include: <ul>
 <li>Continuing to meet the minimum standards for license issuance;</li>
 <li>Satisfying annual continuing education requirements; and</li>
 <li>Paying all required fees for the renewal of the license.</li>
</ul>

LENDER QUALIFICATION AND/OR LICENSURE

MODIFICATION—UNUSUAL PROVISIONS OR REQUIREMENTS FOR MODIFICATIONS OF EXISTING MORTGAGE LOANS

The Abandoned Mine Reclamation Act provides that the state may impose a lien upon property for which the state has undertaken actions for the restoration, reclamation, abatement, control or prevention of the adverse effects of past mining practices. The lien has priority second only to the lien of ad valorem taxes imposed upon the property.

ENVIRONMENTAL LIEN LAWS

The Real Property, Probate and Trust Law Section of the State Bar of New Mexico adopted a Statement of Policy Regarding Lawyers' Opinion Letters in Mortgage Loan Transactions in 2003. It may be requested by contacting the Section at rpteboard@sbnm.org.

LEGAL OPINIONS

<ol>
 <li> INCEPTION OF LIEN: Every person performing labor upon, providing or hauling equipment for, or furnishing materials to be used in the construction, alteration, or repair of any structure, or a registered surveyor who surveys the real property has a lien upon the same for the work performed. The priority of every mechanic's and materialmen's lien (“M&M Lien”) relates back to the time of the commencement of construction (including the furnishing of materials to) of the structure, except that while the lien of a registered surveyor has a priority equal to other M&M Liens, the work performed by the surveyor does not constitute commencement of construction.</li>
 <li> PRIORITY AS REMOVABLE FIXTURES: An M&M Lien covers those articles that are a permanent part of the structure. Whether an article is a fixture, and a permanent part of the structure, is determined by intent of the owner.</li>
</ol>

LABOR AND MATERIALMEN'S LIEN CLAIMS - PRIORITY ISSUES

The title insurance industry is strictly regulated in New Mexico. Only those policies, endorsements, commitments, and closing protection letters approved by the Superintendent of Insurance are available for use in New Mexico. Changes in the state-approved forms are prohibited. Premiums are fixed by state regulation.

TITLE INSURANCE

Policies promulgated for use in New Mexico include a loan policy and a leasehold loan policy, which are adaptations of ALTA forms.

FORM USUALLY REQUIRED BY LENDER

Endorsements must be approved by the state. Available endorsements typically required by a lender are: <ul>
 <li>deletion of standard printed exceptions 1 through 4 (party in possession, unrecorded easements, survey coverage, and M&M Lien coverage), 5 (unless the insured premises are owned by 1 or more individuals), and 8;</li>
 <li>standard printed exception 6 (water rights and claims relating to water) may not be deleted;</li>
 <li>standard printed exception 7 regarding taxes may be modified to read “Taxes for the year [year], and thereafter, not yet due or payable;</li>
 <li>if there are restrictions covering the subject property, a restrictions, encroachments, and minerals endorsement insuring, among other things, that the restrictions have not been violated or if violated will not cause a forfeiture of title or affect the validity or priority of the insured mortgage lien;</li>
 <li>if applicable, revolving credit endorsement;</li>
 <li>if applicable, variable rate endorsement;</li>
 <li>if applicable, mortgage modification endorsement;</li>
 <li>for a construction loan, a pending disbursement down date endorsement and a foundation endorsement;</li>
 <li>an access and entry endorsement;</li>
 <li>same as survey endorsement;</li>
 <li>a utilities endorsement;</li>
 <li>if applicable, subdivision endorsement;</li>
 <li>environmental protection lien endorsement;</li>
 <li>in some locales a zoning endorsement is available;</li>
 <li>an assignment of rents/leases endorsement; and</li>
 <li>a contiguity of parcels endorsement.</li>
</ul> A limited number of other loan specific endorsements are available. Many of the endorsements described above are not available on residential properties of fewer than 5 dwelling units.

ENDORSEMENTS AVAILABLE

First, the New Mexico Mortgage Loan Originator Act subjects mortgage loan originators to a number of requirements, including licensing (discussed above), testing, and background checks, as well as create a fiduciary relationship between mortgage loan originators and borrowers Second, the Home Loan Protection Act and Mortgaged Loan Company Act further subject creditors to requirements related to home loans. Under the Acts: <ul>
 <li>A creditor shall not make a home loan without documenting and considering the borrower's reasonable ability to repay that loan as well as the borrower's reasonable ability to pay the associated costs including principal, interest, applicable taxes, and mortgage insurance premiums;</li>
 <li>A creditor cannot make an adjustable rate home loan where caps on payment increases may be less than that necessary to reduce principal;</li>
 <li>A creditor shall not charge a borrower any fees other than those that are bona fide, reasonable, and actual, to modify, renew, extend, or amend a home loan, but a creditor cannot charge more than $75 to defer a payment;</li>
 <li>A creditor is to treat each payment as posted on the same business day as it was received;</li>
 <li>A creditor cannot include a provision that gives the creditor sole discretion to accelerate indebtedness, except in those good faith instances where the borrower does not abide by the material terms of the loan; and</li>
 <li>A creditor cannot impose a penalty or premium for prepayment of the balance or any portion of the principal of the indebtedness.</li>
</ul> In addition to making all disclosures required by applicable law, mortgage loan companies should provide a copy of the lock-in agreement within 3 days of locking-in the loan rate, make full disclosure of all material facts, disclose amount of compensation mortgage company will be receiving in a manner that can be understood by a reasonable borrower, and clearly disclose a written mortgage loan summary. Third, the liens of mortgages or deeds of trust on condominium units are subordinate to the lien of the condominium association for its assessments and fines unless otherwise provided in the condominium declaration. Fourth, New Mexico law imposes a duty of good faith and fair dealing in the performance and enforcement of every contract. Fifth, when asserting lender-liability counterclaims, debtors will usually assert claims under the New Mexico Unfair Practices Act, which entitles a successful claimant to recover attorneys' fees and, in egregious cases, treble damages. Finally, New Mexico has adopted the Uniform Assignment of Rents Act. An assignment of rents constitutes a presently-effective security interest in “rents” as defined in the act. The assignment is perfected upon recordation. With several exceptions, the act applies to prior assignments. &nbsp;

New Mexico

Mortgage Law Summary

Continue reading the
Mortgage Law Summary for New Mexico

New Mexico

Mortgage Law Summary

Continue reading theMortgage Law Summary for New Mexico

Continue reading the
Mortgage Law Summary for New Mexico