New Court Rules Encourage Mortgage Officers To Work With Borrowers To Try To Prevent Foreclosures


SANTA FE – The state Supreme Court today passed rules to help New Mexico residents facing the potential loss of their homes following the end of the federal foreclosure moratorium.

Under civil law procedures, the foreclosure lender cannot obtain a judgment against the homeowner until it is confirmed that attempts have been made with the borrower to change the loan and “mitigate losses”. Before filing a foreclosure claim, regulations require homeowners to be provided with information about their loan and possible ways to avoid losing their home. The rules and related court forms are effective for cases filed on or after September 7th.

In a separate case, the Court introduced a timetable for the gradual lifting of the suspension of consumer debt collection orders. Known as arrest and execution orders, the orders allow lenders to receive a portion of a defaulted borrower’s wages or to confiscate and sell certain personal property to pay off a debt. State courts stopped issuing debt collection orders in June 2020.

“We have reached the point of the COVID-19 pandemic where courts can usually handle consumer debt and foreclosures in a fair and orderly manner,” said Chief Justice Michael E. Vigil. “Today’s Supreme Court rulings balance the interests of economically disadvantaged New Mexico residents and their creditors and help the courts deal with anticipated increases in debt and foreclosures as consumer protection expires due to the pandemic.”

Click here to view orders, new rules and forms on the Supreme Court website.


The new rules require borrowers to be notified of loan changes and “mitigation” options prior to filing foreclosure claims in district court. These options may include deferred payment agreements, where loan payments are suspended or reduced for a specified period of time. In addition, homeowners should be provided with a list of resources where they can get help to avoid foreclosure, including legal services and possible financial assistance. The foreclosure party must confirm to the court that the requested information has been provided. Later in the litigation, before the court makes a foreclosure order, proof of negotiation with the borrower to mitigate the loss and change the loan must be provided.

The federal foreclosure moratorium expired at the end of July, but the Federal Housing Administration announced last week that it is extending the moratorium on the eviction of federally insured privately owned property foreclosures until September 30.


As the economy recovers from the downturn during the pandemic, courts will gradually issue new debt collection orders based on when creditors received a judgment against the person who owes them money. Older court decisions will be reviewed primarily by the courts. The suspension of debt collection orders will be fully reversed on February 1, 2022, when the courts will issue foreclosure and enforcement orders in all cases, regardless of when the creditor received the judgment.

Creditors will be required to submit new debt collection applications. Any applications pending when the suspension took effect last year will no longer be accepted.

Creditors can start filing lawsuits and courts will resume issuing debt collection orders according to the following timetable:

· Beginning September 1, 2021 for judgments delivered in 2016 or earlier.

Starting October 1, for judgments rendered in cases not later than December 31, 2018

Effective November 1st for judgments filed no later than December 31st, 2019

Effective January 1, 2022 for judgments filed no later than December 31, 2020.

The Court prepared its rules and orders after receiving advice earlier this summer from the New Mexico Bar Association’s Bankruptcy Section Committee on issues that may arise beyond the expiration of federal and state protection for people facing debt collection, foreclosures, and evictions. during a pandemic. …

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