Legal Question in Wills and Trusts in California

The bank is always going to ask that the loan be paid, but that does not mean they are legally entitled to have that done. If the house were in California, the bank can either have a private foreclosure on the house [almost always uses this non-judicial foreclosure procedure] but then can not go after any other assets or a judicial sale and retain the right to go after any amount not recovered. I do not know what the law is in New Mexico, but you could probably google it. You do not tell us whether it was community funds used to buy the property or not.

You should repost your question for New Mexico lawyers. Resolving your questions involves the application of New Mexico's foreclosure laws, and requires legal advice from an attorney licensed to practice law in New Mexico.