Can I Reinstate My Mortgage to Save My Home From Foreclosure in New Mexico?

In New Mexico, homeowners facing a foreclosure may be able to stop the process by bringing the loan current, also known as "reinstating" the mortgage.

In New Mexico, homeowners who are facing a foreclosure might be able to stop the process by bringing the loan current, which is called "reinstating" the mortgage.

To reinstate, you must pay the overdue amountincluding principal, interest, fees, and variousin one lump sum by a specified date. This is also called “curing” the default.

Process for New Mexico Foreclosures

Procedurally speaking, foreclosures in New Mexico can be judicial (where the lender files a lawsuit in court) or nonjudicial (where the lender takes a series of out-of-court steps in order to foreclose). (To learn about the difference between judicial and nonjudicial foreclosures, see Will Your Foreclosure Take Place In or Out of Court?)

Reinstating Your Loan Before the Foreclosure Starts

The vast majority of home loan borrowers in New Mexico get 30 days in which to reinstate before the foreclosure starts.

This is because some borrowers are, under New Mexico law, entitled to a preforeclosure notice that gives 30 days to reinstate. Also, the terms of most New Mexico mortgages and deeds of trust require the lender to give a 30-day "right to cure" notice before starting a foreclosure. (Learn about the difference between a mortgage and a deed of trust.)

Reinstating Your Loan After the Foreclosure Starts

After the lender starts the foreclosure, exactly how long you get to reinstate in New Mexico is determined by:

  • state statute (some borrowers are guaranteed the right to reinstate at any time prior to the time title is transferred by means of foreclosure sale)
  • the terms of your mortgage or deed of trust contract (typical contracts allow a reinstatement at any time prior to five days before the sale in a nonjudicial foreclosure or until the court enters a judgment in a judicial foreclosure), or
  • what the lender will allow.

If you want to reinstate after the foreclosure begins, you should check the state statutes and read the mortgage or deed of trust that you signed when you took out the home loan to find out the deadline. If you aren't comfortable looking up the law or interpreting your loan documents, consider consulting with a foreclosure attorney.

You should also ask your mortgage servicer—the company to which you make your payments—what is the last day you can submit a reinstatement payment in order to stop a foreclosure sale. The last day that a lender will accept a reinstatement might be later than what the law or the terms of the contract allow.

As a general rule of thumb, New Mexico homeowners can typically reinstate the loan up until the foreclosure sale takes place. It’s usually not a good idea, though, to wait until the last minute to reinstate a loan. If there is a bank-processing error or some other problem with your payment, you could miss the deadline and end up losing your home to the foreclosure.

How Much It Costs to Reinstate a New Mexico Home Loan

Should you decide to reinstate your New Mexico mortgage loan, you’ll usually have to pay:

  • all of the missed payments (principal and interest)
  • late fees, and
  • the expenses associated with the foreclosure.

How to Request a Reinstatement Amount

If you don’t reinstate by the deadline given in the 30-day notice, you’ll have to call your mortgage servicer to get the specific reinstatement amount you have to pay. You’ll then receive a quote with the reinstatement figures and a good-through date.

By reinstating, you’re put back in the same position as if the default had never occurred. This means you have to resume making regular on-time payments.

Redeeming Your New Mexico Home Instead of Reinstating the Loan

If you’re able to come up with enough money to pay off the entire mortgage debt—not just the overdue amounts—you can “redeem” your home either before or after the sale, rather than reinstating the loan. (When you pay off the total amount borrowed, not just the past-due amounts, this is called “redeeming” your home.)

In New Mexico, you can redeem either:

  • before the foreclosure sale or
  • after the foreclosure sale for a set period of time, usually one month or nine months. (Get general information about the right of redemption.)

In most cases, reinstating (where you only have to come up with enough to catch up on the delinquent amounts) rather than redeeming (where you have to pay off the full amount of the mortgage debt) is more practical for homeowners facing a foreclosure.

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