Disclaimer

This article is for educational purposes only and is not legal advice. I am not a lawyer. If you need advice about a specific situation, consult a licensed New Mexico attorney experienced in probate or real estate.

Detailed answer

Why an inherited house might not be a probate asset under New Mexico law

Not every home that belonged to a person at death becomes part of that person’s probate estate. In New Mexico, a house will typically bypass probate and transfer directly to someone else when one of these nonprobate mechanisms exists:

• Joint ownership with right of survivorship: If the decedent owned the house as a joint tenant (or other survivorship ownership) with another person, the surviving co-owner usually becomes sole owner automatically at death.
• Living trust: If the property was placed in a revocable living trust and the trust names a successor beneficiary, title passes according to the trust document without probate.
• Designated beneficiary or transfer-on-death instrument: Where state law and properly executed documents allow real property to transfer on death to a named beneficiary, the named person takes the house outside probate.
• Other nonprobate transfers: Proceeds from life insurance, retirement accounts, or other assets with named beneficiaries also pass outside probate and do not become estate property.

By contrast, a house titled solely in the decedent’s name, with no joint owner, no trust, and no valid transfer-on-death designation, is typically a probate asset and must be administered through the probate process.

For general information about probate in New Mexico, see the New Mexico Courts’ probate self-help resources: https://www.nmcourts.gov/self-help/probate/

What happens to the mortgage when title passes outside probate?

Passing title outside probate does not automatically remove mortgages, deeds of trust, or other liens. Key points:

• If the property passes to a survivor or beneficiary, the mortgage or deed of trust generally remains attached to the property. The lender keeps its security interest.
• The person who now owns the house (the beneficiary or joint owner) becomes responsible for mortgage payments to avoid default and possible foreclosure, unless the lender agrees otherwise.
• If the decedent’s estate was responsible for payments (because the house was a probate asset), the estate’s personal representative (administrator or executor) has the duty to manage estate assets and debts during probate.

Can you make mortgage payments without the administrator’s help to stop foreclosure?

Short answer: maybe — but it depends on whether you now hold title and on the lender’s policies. Practical guidance:

• If the house passed outside probate to you (you are on title now):
  • You have the legal interest in the property and may make mortgage payments to prevent foreclosure. The lender can still foreclose if payments stop because the mortgage encumbrance remains.
  • Contact the lender quickly. Explain that title has passed (provide a death certificate and any recorded documents), request a payoff or loan-modification options, and ask whether you can assume the loan or must refinance.
  • Get any agreement in writing. If you make voluntary payments, keep receipts and records showing payments were accepted and how they were applied.
• If the property is in probate (title did not pass outside probate):
  • The personal representative (administrator or executor) has authority to pay debts from estate funds and to protect estate property. If you are not the personal representative, you do not automatically have authority to bind the estate.
  • If the administrator declines to act and the estate lacks funds or direction, you can ask the court for permission to make payments or to be appointed administrator if you have standing. The court can also remove or replace an administrator for cause.
  • You may be able to make payments as an individual occupant to keep the lender from foreclosing, but the lender is not obligated to recognize you as having authority to act on behalf of the estate. Get written confirmation from the lender if they accept your payment and will apply it so you are protected.

Practical risks and creditor actions

Even if you make payments, the lender’s rights depend on the loan documents, state law, and whether you have legal title. Possible pitfalls:

• The lender may demand full payment (acceleration) if the loan contains a due-on-sale clause and the loan servicer chooses to enforce it after transfer — though many transfers on death or transfers after death are treated differently and lenders often work with successors. You should confirm the lender’s position in writing.
• If you pay but do not hold title and the lender forecloses, you may have little legal protection unless you have an enforceable written agreement with the lender.
• If the house is in probate and the estate lacks assets to continue payments, the personal representative must decide whether to continue payments, sell the property, or abandon it — the court can intervene if needed.

Steps to take right away in New Mexico

1. Confirm who holds title. Obtain a title report or check county land records to see whether title already transferred to a survivor or beneficiary.
2. Get certified copies of the death certificate and any recorded documents (deed, trust assignment, transfer-on-death deed) proving the transfer.
3. Contact the mortgage servicer immediately. Provide documentation and ask about options: loan assumption, loan modification, short sale, reinstatement, or payoff amount.
4. If the property is in probate, talk to the estate’s personal representative. If the administrator will not protect the property, consult an attorney about asking the probate court to compel action or to replace the representative.
5. Document every payment. Ask the lender to provide written confirmation that payments were accepted and how they will be applied.
6. Talk to a New Mexico probate or real estate lawyer if the lender threatens foreclosure, the personal representative refuses to act, or title status is unclear.

For New Mexico court resources about handling probate and estate administration, see: https://www.nmcourts.gov/self-help/probate/

Helpful hints

• Quickly determine whether the property is nonprobate (joint tenancy, trust, beneficiary designation). If yes, the administrator generally has no role in the transfer and you should work directly with the lender.
• If you are listed on title after death, act like the owner: contact the mortgage company, make payments if feasible, and consider refinancing or formally assuming the loan as soon as you can.
• Keep meticulous records: copies of the death certificate, recorded deeds, any trust documents, correspondence with the lender, and payment receipts.
• Ask the lender for written guidance about whether the loan can be assumed, whether a payoff demand exists, and whether they will accept your payments if you are not on title.
• If the property is in probate and the administrator will not act, speak with a probate attorney about filing a petition in probate court to compel protection of estate property or to seek removal/replacement of the administrator.
• Even if foreclosure is threatened, many lenders prefer alternatives (loan modification, forbearance, sale) to foreclosure — but you must communicate and document efforts promptly.
• Use New Mexico court self-help resources for basic forms and information, then get local legal help to handle filings or negotiations that affect rights and title: https://www.nmcourts.gov/self-help/