Legal Question in Real Estate Law in New Mexico

Re: Commercial Real Estate Foreclosure Protection

Your rights in the event of a default in payment under a mortgage are governed by (1) the terms of the contract, and (2) NM law. The provisions of each of those must be followed to the letter. Your best action if default is inevitable is to attempt a voluntary settlement with the mortgagee. That would include re-conveying the property to him and negotiating any other payments which have been necessitated by the default. Your other option is to read the financing documents carefully, know what your borrower's rights are, and monitor the mortgagee's actions in dealing with the property to ensure strict compliance. Mortgage foreclosures require that suit be filed in the District Court, so you will have the opportunity to require adherence to the terms. Usually foreclosed property is sold at public sale by a Special Master appointed by the Court. You will be able to attend that sale and see what bids are made. Often the mortgagee bids the amount of the mortgage and ends up with the property. Expenses and deficiencies are determined by the terms of the mortgage.

Re: Commercial Real Estate Foreclosure Protection

Personal guarantees mean exactly what they say - you are responsible for any losses the lender suffers on the property. Do what you can to ensure the property sells before foreclosure for enough to cover the loan; anything above that is yours.

Re: Commercial Real Estate Foreclosure Protection

You need to post this question to New Mexico attorneys, as it is going to be a question of New Mexico law. I would say, however, that nobody can really render an opinion without reviewing the entire deal including all of the documentation thereof. I can say that, given this is not a primary residence, and you personally guaranteed the loan, you are not in a very good position if it does go into foreclosure.

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