A. Except as provided in Subsections D and E of this section, within six years after the date of a trustee's sale of trust real estate under a deed of trust as provided in the Deed of Trust Act, a separate civil action may be commenced to recover a deficiency judgment for the balance due on the contract for which the deed of trust was given as security. The deficiency judgment shall be for an amount equal to the sum of the total amount owing the beneficiary or the beneficiary's personal representatives, successors or assigns as of the date of the sale, as determined by the court, and, if applicable, the amount owing on all prior mortgages, deeds of trust, liens and encumbrances and real estate contracts with interest less the sale price at the sale by the trustee of the trust real estate. Any deficiency judgment recovered 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 any costs of the action.

B. If no action is commenced for a deficiency judgment as provided in Subsection A of this section, the proceeds of the sale, regardless of amount, shall be deemed to be in full satisfaction of the debt and no right to recover a deficiency in any separate civil action shall exist.

C. Except as provided in Subsections D and E of this section, the Deed of Trust Act does not preclude a beneficiary or a trustee or their respective personal representatives, successors or assigns from foreclosing a deed of trust in the same manner provided by law for the foreclosure of mortgages on real estate.

D. A deed of trust may prohibit the recovery of any balance due after the trust real estate is sold at a trustee's sale or after the deed of trust is foreclosed in the manner provided by law for the foreclosure of mortgages on real estate.

E. No deficiency judgment shall be sought or obtained under any deed of trust securing a residential loan made to a low-income household.

F. No deficiency in recovery of any balance due after the sale at a trustee's sale or a judicial foreclosure sale of trust real estate under a deed of trust securing a residential loan made to a low-income household shall be reported to any credit reporting agencies or disclosed to any person other than the trustor or the trustor's personal representatives, unless the disclosure is required by law.

G. For the purposes of Subsections D, E and F of this section:

(1) "low-income household" means a household in which the current annual income is at or below eighty percent 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; and

(2) "residential loan" means a loan the primary purpose of which is the purchase or finance of a permanent dwelling located in New Mexico and which is primarily secured by a deed of trust encumbering the dwelling and related trust real estate.

H. The determination of whether a household is a low-income household and whether a loan is a residential loan shall be made as of the time the loan is made on the basis of information obtained during the loan application process.

History: Laws 1987, ch. 61, § 17; 1993, ch. 145, § 5; 2006, ch. 32, § 7; 2007, ch. 156, § 6.

The 2007 amendment, effective April 2, 2007, permitted a civil action to recover a deficiency judgment within six years after the date of a trustee's sale of trust real estate under a deed of trust; prohibited deficiency judgments or reports of deficiencies to credit reporting agencies if a residential loan is to a low-income household; defined "low-income household" and "residential loan"; and added Subsection H.

Applicability. — Laws 2007, ch. 156, §7 provided that Laws 2006, ch. 32, codified as Sections 48-10-3, 48-10-7, 48-10-10, 48-10-11, 48-10-13, 48-10-16, and 48-10-17 NMSA 1978, applied to deeds of trust executed on or after May 17, 2006 and that the provisions of Laws 2007, ch. 156 applied to deeds of trust executed on or after the effective date of Laws 2007, ch. 156, which was April 2, 2007.

The 2006 amendment, effective May 17, 2006, deleted the provision in Subsection A that within twelve months after the sale, a civil action may be commenced to recover a deficiency judgment; and added Subsection G to define "low-income household".

The 1993 amendment, effective June 18, 1993, added "action to recover balance prohibited on loans secured by low-income households" to the end of the catchline; substituted "Subsections D and E" for "Subsection D" in the first sentence of Subsection A and in Subsection C; inserted "not encumbering real estate occupied by a low-income household" in Subsection D; and added Subsections E and F.