NM Stat § 39-5-18 (2021)
2021 New Mexico Statutes|Chapter 39 - Judgments, Costs, Appeals|Article 5 - Sales Under Execution and Foreclosure|Section 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 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 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 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. History: Laws 1931, ch. 149, § 2; 1941 Comp., § 21-219; 1953 Comp., § 24-2-19; Laws 1957, ch. 109, § 1; 1977, ch. 85, § 1; 1987, ch. 61, § 24; 2007, ch. 156, § 1. ANNOTATIONSCross references. — As to redemption of real property sold on execution, see 39-5-21 NMSA 1978. For service of notice on parties, see Rule 1-005 NMRA. The 2007 amendment, effective April 2, 2007, amends and redesignates former subsection B as Paragraph (3) of Subsection A to provide for service on all parties who appeared at the judicial foreclosure case; redesignates former Subsection C as Subsection B; redesignates former Subsection D as Subsection C and provides for the setting of hearings; adds new Subsections D and E to provide new definitions; deletes most of former Subsection E and redesignates the Subsection as Subsection G. Applicability. — Laws 2007, ch. 156, §7 provided that Laws 2006, ch. 32, which is codified as Sections 48-10-3, 48-10-7, 48-10-10, 48-10-11, 48-10-13, 48-10-16, 48-10-17 NMSA 1978, applies to deeds of trust on or after May 17, 2006 and that the provisions of Laws 2007, ch. 156 apply to deeds of trust executed on or after the effective date of Laws 2007, ch. 156, which is April 2, 2008. Redemption by cotenant. — A foreclosure sale does not extinguish a cotenancy until the time for redemption has passed and one cotenant's redemption inures to the benefit of the other cotenant, subject to the right of contribution. Bankers Trust Co. v. Woodall, 2006-NMCA-129, 140 N.M. 567, 144 P.3d 126. Hearing on a certificate of redemption. — In the absence of a debtor's compliance with the redemption statute, which requires the debtor to petition the district court and to deposit the sum of money required by statute, the district court is not required to hold a hearing and issue a certificate of redemption. Chapel v. Nevitt, 2009-NMCA-017, 145 N.M. 674, 203 P.3d 889. Extension of the redemption period. — A debtor must comply with the redemption statute before equity may be invoked to extend the redemption period. Chapel v. Nevitt, 2009-NMCA-017, 145 N.M. 674, 203 P.3d 889. A court may use its equitable power to grant an extension to the redemption period where the debtor fulfills all of the requirements of the redemption statute, but the redemption is not complete because of a clerical error or technical mix-up or where there has been fraud, deceit or collusion on the part of the person against whom relief is sought. Chapel v. Nevitt, 2009-NMCA-017, 145 N.M. 674, 203 P.3d 889. Redemption does not ensure clear title. — The redemption statute does not guarantee that there will be clear title to the property after redemption or require the court to determine the extent of all judgments and liens against a debtor. Chapel v. Nevitt, 2009-NMCA-017, 145 N.M. 674, 203 P.3d 889. Conditional redemption is ineffective. — To effectively redeem property, a debtor cannot impose any conditions upon the debtor's tender of money pursuant to the redemption statute. Chapel v. Nevitt, 2009-NMCA-017, 145 N.M. 674, 203 P.3d 889. Amount to redeem. — To redeem property, the redemption statute requires a debtor to pay only the amount paid at the foreclosure sale, with interest from the date of purchase at the rate of ten percent a year; all taxes, interest and penalties that were paid by the purchaser; and all payments made by the purchaser to satisfy in whole or in part any prior lien or mortgage not foreclosed. The debtor is not required to pay any other sums owed by the debtor to the purchaser, including any deficiency judgment against the debtor, to redeem property. Chapel v. Nevitt, 2009-NMCA-017, 145 N.M. 674, 203 P.3d 889. A junior mortgagee who forecloses its mortgage, along with foreclosure of the senior mortgage, and obtains a deficiency judgment has a right to redeem. Mortgage Elec. Registration Syss., Inc. v. Montoya, 2008-NMCA-081, 144 N.M. 264, 186 P.3d 256. (decided under former law) First person with right of redemption to file for redemption has priority over all others seeking to redeem the property after a mortgage foreclosure. HSBC Bank USA v. Fenton, 2005-NMCA-138, 138 N.M. 665, 125 P.3d 644. Redemption is a statutory right. Brown v. Trujillo, 2004-NMCA-040, 135 N.M. 365, 88 P.3d 881, cert. denied, 2004-NMCERT-004, 135 N.M. 562, 91 P.3d 603. Redemption statutes essentially protect debtors. Brown v. Trujillo, 2004-NMCA-040, 135 N.M. 365, 88 P.3d 881, cert. denied, 2004-NMCERT-004, 135 N.M. 562, 91 P.3d 603. Redemption statute describes what redeemer must pay in order to redeem the property. Chase Manhattan Bank v. Candelaria, 2004-NMSC-017, 135 N.M.527, 90 P.3d 985. The costs that a redeemer must pay to redeem a property are circumscribed by the redemption statute. Chase Manhattan Bank v. Candelaria, 2004-NMSC-017, 135 N.M.527, 90 P.3d 985. Only funds that purchaser may recover under the redemption statute are those funds that the purchaser paid to acquire the property. Chase Manhattan Bank v. Candelaria, 2004-NMSC-017, 135 N.M.527, 90 P.3d 985. Debtor's placing redemption amount in escrow at title company was not the functional equivalent of paying purchaser. Brown v. Trujillo, 2004-NMCA-040, 135 N.M. 365, 88 P.3d 881, cert. denied, 2004-NMCERT-004, 135 N.M. 562, 91 P.3d 603. By conditionally tendering money to purchaser and then filing petition without cash deposit with the trial court, debtor did not substantially comply with either procedure the legislature has created. Brown v. Trujillo, 2004-NMCA-040, 135 N.M. 365, 88 P.3d 881, cert. denied, 2004-NMCERT-004, 135 N.M. 562, 91 P.3d 603. This section and 42-4-17 NMSA 1978 can be construed together. Chase Manhattan Bank v. Candelaria, 2004-NMCA-112, 136 N.M. 332, 98 P.3d 722, rev'd on other grounds, 2004-NMSC-017, 135 N.M. 527, 90 P.3d 985. Redemption in entirety. — It is a general rule that a mortgage is an entire thing, and must be redeemed in its entirety, and that a mortgagee cannot be required to divide either his debt or his security. Seasons, Inc. v. Atwell, 86 N.M. 751, 527 P.2d 792 (1974); Springer Corp. v. Kirkeby-Natus, 80 N.M. 206, 453 P.2d 376 (1969). Owners of subdivision lots included in foreclosure of the subdivision would not be allowed to redeem their lots by paying only a pro rata portion of the sale price. Seasons, Inc. v. Atwell, 86 N.M. 751, 527 P.2d 792 (1974). Court need not grant reimbursement if doing so would, under equitable principles, fail to carry out the purposes of the redemption statutes. Chase Manhattan Bank v. Candelaria, 2004-NMCA-112, 136 N.M. 332, 98 P.3d 722, rev'd on other grounds, 2004-NMSC-017, 135 N.M. 527, 90 P.3d 985. Improvements. — The redemption statute does not allow the purchaser to recover for any funds paid for improvements. Chase Manhattan Bank v. Candelaria, 2004-NMSC-017, 135 N.M.527, 90 P.3d 985. Requiring the redeemer to pay for improvements would contravene the public policy embodied in the redemption statute. Chase Manhattan Bank v. Candelaria, 2004-NMSC-017, 135 N.M.527, 90 P.3d 985. Reimbursement for improvements. — This section, while providing the exclusive procedure and remedy for redemption, does not bar a court from ordering a redeemer to reimburse a purchaser at foreclosure for improvements made by that purchaser before a petition for a certificate of redemption is filed or served, and the court had the authority to order such reimbursement under 42-4-17, NMSA 1978. Chase Manhattan Bank v. Candelaria, 2004-NMCA-112, 136 N.M. 332, 98 P.3d 722, rev'd on other grounds, 2004-NMSC-017, 135 N.M. 527, 90 P.3d 985. Filing allowed in original foreclosure action. — A petition for redemption under this section may be filed in the original foreclosure action. Crown Life Ins. Co. v. Candlewood, Ltd., 112 N.M. 633, 818 P.2d 411 (1991). Recordation of redemption. — The requirement of 39-5-23 NMSA 1978 for recordation of redemption applies to extra-judicial redemption procedure authorized under Paragraph A(1). W. Bank v. Malooly, 119 N.M. 743, 895 P.2d 265 (Ct. App. 1995). Redemption period. — Construing 39-5-17 NMSA 1978 and this section together, it is apparent that a person entitled to redeem is thus given at least 11 (now 10) months from the date of the foreclosure judgment within which to redeem. Springer Corp. v. Kirkeby-Natus, 80 N.M. 206, 453 P.2d 376 (1969). Time allowed for redemption cannot be extended, nor can any condition attached by statute be waived by judicial interpretation. Union Esperanza Mining Co. v. Shandon Mining Co., 18 N.M. 153, 135 P. 78 (1913). The 30-day time limit set by 39-1-1 NMSA 1978 for the court's ruling on a motion does not apply to a petition for a certificate of redemption. Crown Life Ins. Co. v. Candlewood, Ltd., 112 N.M. 633, 818 P.2d 411 (1991). Showing required for equitable jurisdiction. — Because of the strictness of the redemption statute and the beneficial purposes thereof, absent gross disparity between the property's value and the sale price, debtor must make a threshold showing of some causal connection between purchaser's alleged misconduct and debtor's inability to comply with the statute in order to invoke a trial court's exercise of discretion in equity. Brown v. Trujillo, 2004-NMCA-040, 135 N.M. 365, 88 P.3d 881, cert. denied, 2004-NMCERT-004, 135 N.M. 562, 91 P.3d 603. Equitable extension of time for redemption. — The district court had discretion in equity to extend the mortgagor's time in which to redeem the property where the bank's actions in obtaining a release of its mortgage from the Small Business Administration increased the amount of redemption just days before the redemption period would expire. Plaza Nat'l Bank v. Valdez, 106 N.M. 464, 745 P.2d 372 (1987). Reduction of redemption period. — Although the legislature initially granted a nine-month period of redemption for junior lienholders, the legislature also intended to give the parties to the instrument being foreclosed the power to reduce the statutory period to not less than one month by entering into a written agreement contained in the instrument being foreclosed. Sun Country Sav. Bank v. McDowell, 108 N.M. 528, 775 P.2d 730 (1989). Motion for extension of redemption period must be filed before judgment or decree of foreclosure is entered. — In a foreclosure action, where appellant moved for a thirty-day extension of the one month redemption period so that he could assign his right to redeem the foreclosed property, the district court did not err in denying appellant's motion to extend on the grounds that the motion was not filed before the foreclosure judgment was entered, because the deadline set forth in 39-5-19 NMSA 1978 does not render the opportunity to redeem, or at least to request an extension of the redemption period, unreasonable, and appellant, having been aware of the complaint for foreclosure for six months before the default judgment was entered, was not deprived of a reasonable opportunity to request an extension of the redemption period. Wells Fargo Bank v. Pyle, 2016-NMCA-046. Redemption price calculated. — Facts required judicial calculation of redemption price and interest where first sale invalidated by court. See Morgan v. Texas Am. Bank/Levelland, 110 N.M. 184, 793 P.2d 1337 (1990). Redemption amount. — In addition to taxes, interest and penalties as authorized by statute, a purchaser was entitled to additional interest from the date of the purchase to the date of a court ruling on redemption rights, taxes and irrigation assessments, rental proceeds, and insurance premiums. W. Bank v. Malooly, 119 N.M. 743, 895 P.2d 265 (Ct. App. 1995). The trial court erred by not holding a hearing to determine "the amount of money necessary for the redemption" in violation of the mandatory langauge contained in Subsection D. W. Bank v. Malooly, 119 N.M. 743, 895 P.2d 265 (Ct. App. 1995). Right not retroactive. — Right of redemption could not be applied to a foreclosed deed of trust, which was executed before statute was enacted. Bremen Mining & Milling Co. v. Bremen, 13 N.M. 111, 79 P. 806 (1905). Payment to purchaser. — The redemptioner may redeem by paying the redemption money to the purchaser at the foreclosure sale, as shown by the court record, so long as he is not divested of the legal title. First State Bank v. Wheatcroft, 36 N.M. 88, 8 P.2d 1061 (1931) (decided under former law). Under former law redemption from foreclosure could be effected only by payment to the purchaser or his assign, and not to the clerk of the court. Richardson v. Pacheco, 35 N.M. 243, 294 P. 328 (1930); Moise v. Timm, 33 N.M. 166, 262 P. 535 (1927), superseded by statute, Brown v. Trujillo, 2004-NMCA-040, 135 N.M. 365, 88 P.3d 881. Tender invalidated by imposition of conditions. — As a general proposition, applicable at least where it appears that a larger sum than that tendered is in good faith claimed to be due, the tender is not effectual as such if coupled with conditions such that an acceptance of it, as tendered, will involve an admission by the party accepting it that no more is due; thus, where a release in full was demanded as a condition of the alleged tender, this attempt to enlarge the statutory right of redemption invalidated the tender. Union Esperanza Mining Co. v. Shandon Mining Co., 18 N.M. 153, 135 P. 78 (1913). Cash deposit required. — A mortgagor's tender of an unendorsed cashier's check did not comply with the requirement of this section that cash be deposited to effect a redemption. Dalton v. Franken Constr. Cos., 1996-NMCA-041, 121 N.M. 539, 914 P.2d 1036. Rights of junior encumbrances. — The only absolute right of a junior mortgagee, as against a senior mortgagee, is the right to redeem from the senior mortgagee and the rights of an omitted junior encumbrancer remain precisely as they were before the proceedings were instituted to foreclose the first mortgage; they are neither enlarged nor diminished by defective foreclosure. Springer Corp. v. Kirkeby-Natus, 80 N.M. 206, 453 P.2d 376 (1969). Accrual of second mortgagee's redemption rights. — Since second mortgagee's rights, including its right of redemption, were not impaired or affected by original foreclosure to which it was not a party, its right of redemption only accrued upon the entry of a judgment foreclosing its rights. Springer Corp. v. Kirkeby-Natus, 80 N.M. 206, 453 P.2d 376 (1969). Accounting to junior mortgagee. — Where a junior mortgagee purchased at his own foreclosure sale subject to senior mortgages, and during the redemption period was compelled to protect his title by making payments on the prior mortgages, such payments could not be included, under the usual statutory provisions, in the amount required to redeem the property; however, the junior mortgagee was entitled to an equitable lien for such payments, and the court had authority to grant mortgagee's motion for an accounting after redemption by the mortgagor. Leonard Farms v. Carlsbad Riverside Terrace Apts., Inc., 86 N.M. 241, 522 P.2d 576 (1974). Purchase of property by junior lienholder. — Purchase of property at a mortgage foreclosure sale by a junior lienholder did not cut off the right of other persons to statutory redemption. W. Bank v. Malooly, 119 N.M. 743, 895 P.2d 265 (Ct. App. 1995). Assignee's redemption authority. — Holder-by-assignment of a junior lien is authorized to redeem from the judicial sale of foreclosed property. W. Bank v. Malooly, 119 N.M. 743, 895 P.2d 265 (Ct. App. 1995). Appellant need not possess unified redemption interest to redeem. — In a case involving assignment of redemption rights to appellant by some, but not all, heirs of decedent following a foreclosure judgment and sale of decedent's residence, where the district court granted appellee Santa Fe Community Housing Trust's (Trust) petition for redemption and motion for summary judgment, based on a determination that the statutory right of redemption requires a unified interest and possession of title to the property being assigned and redeemed, the effect of which was to reject appellant's assigned redemption interest, the district court erred in concluding that appellant needed to obtain a unified interest to exercise his assigned rights of redemption and that decedent's heirs needed to first obtain title prior to the assignment of their redemption rights, because the plain language of the statute does not require all heirs to act in unity to redeem a former defendant owner's property, and the plain language of the redemption statute does not require that heirs first have title to the entirety of the property to assign or exercise redemption rights. The statutory right to redeem treats certain categories of non-owners, such as assignees, as well as heirs, as defendant owners, and it provides a right to regain actual physical possession of the property by the identified categories of defendant owner, and as such, the right to possess property is not destroyed by a foreclosure sale until the period of redemption expires because a former defendant owner still has the right to possess the whole until then, and because the defendant owners hold the right to possess the property until the expiration of the redemption period, it would be impractical to require an assignee to obtain title during such period. Kaushal v. Santa Fe Cmty. Housing Trust, 2021-NMCA-010.Substantial compliance with statutory redemption requirements. — In a case involving assignment of redemption rights, where appellee Santa Fe Community Housing Trust (Trust) filed a redemption petition with the district court, thus meeting the first requirement of the redemption statute, and attempted to tender a cashier's check, a fully negotiable instrument, for the entire purchase price of the property, which was refused by the district court clerk absent a court order, and where appellee filed a redemption petition, deposited a fully negotiable instrument for the fully required amount of the foreclosure sale within the redemption period, and served his petition on decedent's heirs and the foreclosing bank, both parties substantially complied with the redemption statute requirements and both party's redemption petitions were valid, even though appellant failed to deposit any sum of money in the district court registry and appellee failed to serve his petition on the Trust, both of which failures amounted to "technical deficiencies". Kaushal v. Santa Fe Cmty. Housing Trust, 2021-NMCA-010.Assignee takes free of judgment liens. — Because judgment liens attach only to the property of the debtor, the mortgagor's assignee takes property redeemed after foreclosure free of all prior junior judgment liens not his own. Turner v. Les File Drywall, Inc., 117 N.M. 7, 868 P.2d 652 (1994). Redemption as estoppel. — The redemption of real estate from an execution sale by a judgment debtor estops him from questioning the validity of such sale. Springer v. Wasson, 25 N.M. 379, 183 P. 398 (1919). Vendor's liens. — Code 1915, § 4775 had no application in a case where an implied vendor's lien was established and foreclosed by decree of the court. Eckert v. Lewis, 34 N.M. 13, 275 P. 767 (1929). Where mortgagor's conveyance of the equity of redemption contained covenant that grantees assumed payment of vendor's lien notes, but they defaulted, and property was sold to satisfy lien, and deficiency judgments were secured, the maker of the vendor's lien notes could redeem from foreclosure. Watson v. First Nat'l Bank, 23 N.M. 372, 168 P. 488 (1917). Unenforceable judgment. — Where a judgment embraced both a recovery in personam and an order of foreclosure and sale, but postponed sale under mechanic's lien for 60 days, it is ambiguous and unenforceable. Mozley v. Potteiger, 37 N.M. 91, 18 P.2d 1021 (1933). Trial court's discretion. — The trial court is vested with discretion as to the method in which it chooses to apply insurance proceeds received by the purchaser. There is an abuse of discretion when the trial court's ruling is clearly against logic and effect of the facts and circumstances. Fed. Land Bank v. Burgett, 97 N.M. 519, 641 P.2d 1066 (1982). Failure to set aside sale held erroneous. — Trial court erred in refusing to set aside a foreclosure sale based on inadequacy of price and other equitable circumstances, where the court made no finding as to the value of the property or even as to the approximate range of its worth, although, even under the lowest estimate, the purchase price was less than 23 percent of value, and in all probability represented only about 15 percent of the property's worth. Crown Life Ins. Co. v. Candlewood, Ltd., 112 N.M. 633, 818 P.2d 411 (1991). Award of interest to date of sale not permitted. — The trial court cannot award interest from the date of the foreclosure judgment to the date of the foreclosure sale. Fed. Land Bank v. Burgett, 97 N.M. 519, 641 P.2d 1066 (1982). Law reviews. — For note, "Real Estate Contracts - When Recording of a Lien Instrument Is Not Notice to the Whole World - Actual Notice Required to Protect Second Lien on a Real Estate Contract: Shindledecker v. Savage," see 13 N.M.L. Rev. 177 (1983). For annual survey of New Mexico Law of Property, see 20 N.M.L. Rev. 373 (1990). Am. Jur. 2d, A.L.R. and C.J.S. references. — 30 Am. Jur. 2d Executions § 434 et seq. Mortgagee's possession before foreclosure as barring right of redemption, 7 A.L.R.2d 1131. Redemption rights of vendee defaulting under executory land sale contract after foreclosure sale or foreclosure decree enforcing vendor's lien or rights, 51 A.L.R.2d 672. Redemption rights of mortgagor making timely tender but of inadequate amount because of officer's mistake, 52 A.L.R.2d 1327. Judgment creditors, other than the one on whose execution the sale was made, who may redeem from execution sale, 58 A.L.R.2d 467. Necessity and sufficiency of tender of payment by one seeking to redeem property from mortgage foreclosure, 80 A.L.R.2d 1317. Right of junior mortgagee, whose mortgage covers only a part of land subject to first mortgage to redeem pro tanto, where he was not bound by foreclosure sale, 46 A.L.R.3d 1362. Sufficiency of tender of payment to effect defaulting vendee's redemption of rights in land purchased, 37 A.L.R.4th 286. Constitutionality, construction and application of statute as to effect of taking appeal, or staying execution, on right to redeem for execution or judicial sale, 44 A.L.R.4th 1229. Mortgages: effect on subordinate lien of redemption by owner or assignee from sale under prior lien, 56 A.L.R.4th 703. 56 C.J.S. Mechanic's Liens § 430; 59 C.J.S. Mortgages §§ 813 to 850.