Disclaimer: This article is for educational purposes only and does not constitute legal advice.
Detailed Answer
When a foreclosure sale produces more funds than needed to cover the debt, New Mexico law requires the court to hold the surplus pending claims from interested parties. Under NMSA 1978, Section 48-10-12 (NMSA 48-10-12), a homeowner, junior lienholder or other party may petition the district court for distribution of those excess proceeds. Follow these steps:
1. Confirm Surplus Availability
Contact the district court clerk in the county where the foreclosure occurred. Request a status report on the sale and inquire whether surplus funds remain. Obtain the case number and sale date.
2. Determine Deadlines
New Mexico law typically requires petitioners to file within one year of the foreclosure sale date. Verify the exact deadline in the sale order or court rules to avoid forfeiting your claim.
3. Prepare the Petition
Draft a pleading titled “Petition for Distribution of Surplus Proceeds.” Include:
- The original case number, sale date and property description.
- The dollar amount of surplus funds held by the court.
- Your interest in the funds (e.g., homeowner, lienholder).
- A statement that no other party has claimed the surplus.
4. File and Serve the Petition
File the petition with the district court clerk. Pay any applicable filing fee. Then serve copies on all parties in the foreclosure case, including the senior mortgagee and any recorded lienholders. Use certified mail or personal service per NMSA 21-1-1.
5. Schedule and Notice a Hearing
Request a hearing date. The court may require you to publish a notice of the hearing in a local newspaper. Follow publication rules in NMSA 1-28-1.
6. Attend the Hearing
Bring originals or certified copies of your documents: proof of identity, the deed of trust, recording information and correspondence showing no competing claims. Present your case and answer any court questions.
7. Receive the Surplus Distribution
If the court grants your petition, the judge will sign an order directing the clerk to disburse the funds. The clerk will issue a check payable to you. Allow several days for processing.
Helpful Hints
- Review local district court rules for specific filing formats and fees.
- Keep certified copies of all documents you file or serve.
- Track deadlines closely—missing a deadline can bar your claim.
- Consider consulting a licensed attorney if multiple claimants contest the surplus.
- Document all communications with the court clerk and opposing parties.