Court Opinion

ID: 9846517
Source: CourtListenerOpinion
Date Created: 2023-09-24 03:42:57.090407+00
Date Added: 2024-06-11T09:19:36.561653
License: Public Domain

HARTZ, Judge, concurring. I join fully in Justice Minzner’s opinion for the panel. I write separately only to urge the legislature to revisit NMSA1978, Section 39-5-18 (Repl.Pamp.1991). The advisability of statutory redemption, particularly redemption by lienholders, is a matter of some dispute. One purpose of statutory redemption, probably the principal purpose, is to encourage higher bidding at a foreclosure sale, because a bidder who bids “too little” risks losing the property when a party with a right of statutory redemption acquires the property from the bidder by simply paying the bid price plus interest. Yet, some authorities question whether statutory redemption laws actually accomplish this purpose. They express concern that the threat of statutory redemption may actually discourage bidders from entering the auction. See 3 Richard R. Powell, Powell on Real Property ¶ 470, at 37-366 (Patrick J. Rohan rev. ed. 1993). Moreover, when lienholders have a right of statutory redemption, they may sit out the bidding altogether; rather than competing with another bidder and bidding up the price, they can simply wait for the bidding among others to end and then redeem at that price plus any accrued interest. In a state such as New Mexico which permits statutory redemption, it is not for a court to decide that statutory redemption is bad policy. But without knowing more about what policy considerations motivated the legislature to enact statutory redemption, the courts face great confusion and difficulty in determining whether a bare-bones statute like New Mexico’s (1) permits successive redemptions, (2) gives any particular holder of a statutory right of redemption priority over another holder if only one redemption is permitted, and (3) requires a redeeming junior lienholder to pay a senior lien of a prior redeemer. To answer the third question, for example, it is important to know whether the grant to a lienholder of a statutpry right of redemption is solely to encourage higher bidding at the foreclosure sale or whether it is to protect the specific interest of a lienholder in there being a bid high enough to pay all or part of its lien when the fair market value of the property is greater than the sum of all prior liens. Both public policy and the interest in clarity of our statutes argue for legislative reexamination of Section 39-5-18. If the legislature continues to believe that a statutory right of redemption for lienholders is appropriate, litigation could be reduced and the specific goals of the legislature advanced by spelling out in the statute whether successive redemptions should be permitted, the proper procedure — including time limits — for successive redemptions, and the amount that a redeemer must pay to a prior redeemer. Because statutes in a number of other states have addressed these issues, the legislature can obtain substantial guidance by examining those statutes.