by Jason C. Bousliman, Esq.
McCarthy Holthus, LLP
USFN Member (AZ, CA, CO, ID, NV, NM, OR, TX, WA)

This morning, I sat through the most grueling hearing of my professional life; my client’s future hung in the balance. Losing meant loss of freedom - no car, no social life, nothing. The decision-maker hit me with questions and arguments that stung like roundhouse kicks. Was this a Supreme Court oral argument? Nope. A high stakes parole hearing? Nope. Not even close. Worse, I was at my 15-year-old son’s parent/teacher conference. Seriously. Let me guess: you want to know what this has to do with the statute of limitations for a foreclosure in New Mexico. Have patience; I’ll get there. To start, here’s a run-down of The Great Parent/Teacher Conference Inquisition of 2020:

“Your son NEVER turns his homework in on time!” one teacher exclaimed. 

“Well, I didn’t know that, and I trusted him to follow the classroom rules,” I said. 

“He can always turn in homework late for partial credit,” an administrator proclaimed. 

“I swear I turned it all in…” my son kept quietly uttering.

”Don’t you want your child to succeed?!” my last inquisitor jabbed.

“No,” I said sarcastically, “I was hoping my son could end up on that Dr. Phil show talking about how my lack of holding him accountable led him down a bad path….”

Okay, I admit I didn’t actually say that last part (despite the fact that I was vehemently thinking it at all of them), but the discussion reminded me about the statute of limitation in New Mexico. You know, New Mexico, the place where your foreclosure timelines go to die and where lenders have long asked, “When does the statute of limitation expire?” In other words, “When is the last day for my son to submit his homework for even partial credit?” We now have an answer from the New Mexico Court of Appeals in the case of LSF9 Master Participation Trust v. Moreno, No. A-1-CA-36879 (Ct. App. December 18, 2019) citing LSF9 Master Participation Trust v. Sanchez, 2019-NMCA-055, 450 P.2d 413. 

In Moreno, the initial default occurred on November 1, 2009, and the complaint was filed on December 11, 2015. The District Court held that the six-year statute of limitation expired on November 1, 2015. The complaint was deemed to be filed one month and eleven days too late and was dismissed accordingly. The Court of Appeals disagreed, finding that the statute of limitation runs from the date of each individual missed payment. Therefore, although the bank was not allowed to recover payments due more than six years from the filing date, the bank was entitled to get “partial credit” and recover payments due within the six-year window. 

Profound questions remain on this issue including those concerning de-acceleration, re-acceleration and prior dismissals (with or without prejudice). Consequently, the best practice in any case is to file within six years of the initial default date. It’s the age-old wisdom to do something the first day you can, not the last day you must. However, if faced with this issue in New Mexico, you now have permission to turn in your homework late for partial credit. 

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Spring 2020 USFN Report