NM Underwriting Summary

Search/Exam

No minimum title search period is required by state law, marketable record title acts or other applicable title examination standards. See Section 59A-30-11(A )NMSA 1978, which requires a search and examination of title prior to the issuance of title insurance solely for the benefit of the underwriter. NM law and regulations require all title insurance agents to own, operate or control a title plant with at least 20 years of historical real estate records, which is certified by the state Insurance Division. See Section 59A-12-13 NMSA 1978 and Rule 13.14.2.8, NMAC.

N.M. Standard Exceptions

Standard exceptions are promulgated by the Superintendent of Insurance (See Rule 13.14.5.9(A) NMAC) and cannot be deleted, modified, changed or amended other than in accordance with the provisions of the New Mexico Title Insurance Regulations and underwriter requirements as follows.

1. Rights or claims of parties in possession not shown by the public records.

Rule 13.14.6.12, NMAC requires satisfactory evidence that the seller/borrower is in sole possession of the property in order to delete the exception. Usually an affidavit is acceptable, but if the seller cannot provide an affidavit, an inspection may be required.

2. Easements, or claims of easements, not shown by the public records.

A recent” survey is required to delete the exception. A recent survey is defined as one meeting the underwriter’s requirements. See Rules 13.14.6.13 and 13.14.1.25(F), NMAC.

3. Encroachments, overlaps, conflicts in boundary lines, shortages in area, or other matter which would be disclosed by an accurate survey and inspection of the premises.

A “recent” survey is required to delete the exception. A recent survey is defined as one meeting the underwriter’s requirements. See Rules 13.14.6.14 and 13.14.1.25(F), NMAC.

4. Any lien, claim or right to a lien, for services, labor or material heretofore or hereafter furnished, imposed by law and not shown by public records.

This exception may be deleted upon satisfactory evidence that there have been no improvements that could result in such claims. For most residential property an affidavit from the seller or contractor is acceptable. See Rule 13.14.6.15, NMAC. For new construction, underwriter approval is required unless 120 days (statutory lien period) have passed since the issuance of the Certificate of Occupancy. An underwriter may agree to delete the exception without satisfaction of priority, upon approval and payment of additional premium.

5. Community property, survivorship or homestead rights, if any, of any spouse of the insured (or vestee in a leasehold or loan policy).

This exception may be deleted from an owner’s or loan policy where the vestee is a corporation, LLC, partnership, trust or other entity. See Rule 13.14.6.16, NMAC. It may be deleted from a loan policy where the borrowers are married, with both vested, or sole and separate pursuant to an agreement of the parties, or single. It may never be deleted from an Owner’s policy where the vestee is an individual.

6. Water rights, claims or title to water.

This exception may not be deleted from any policy.

7. Taxes for the year ____, and thereafter.

See Rule 13.14.5.12, NMAC, which allows modification to except to the second half of the taxes for a given year if the first half is paid and not yet due, or to state “taxes for the year and thereafter, not yet due and payable. If the first half is paid and the second half is not delinquent, the language “not yet delinquent” may be added.

8. Defects, liens, encumbrances, adverse claims or other matters, if any, created first appearing in the public records or attaching subsequent to the effective date hereof but prior to the date the proposed insured acquires for value of record the estate or interest or mortgage thereon covered by this commitment. (Appears in the commitment only.)

N.M. Specific Policy Variation

Unilateral exercise of the mandatory arbitration clause contained within ALTA policy forms has been found unconstitutional by the NM Supreme Court. The following language is required under Schedule B of the policy: “In compliance with Subsection D of 13.14.18.10 NMAC, the company hereby waives its right to demand arbitration pursuant to the title insurance arbitration rules of the American arbitration association. Nothing herein prohibits the arbitration of all arbitrable matters when agreed to by both the company and the insured.” (See Rule 13.14.5.9(C). Otherwise, New Mexico has adopted the ALTA 2006 owner’s and loan policy forms as its promulgated forms.

UPL

Title insurance agents provide complete service on all aspects of escrow and title in the closing of a real estate transaction. No state law requires the involvement of an attorney. Attorneys are rarely involved in a typical residential transaction. Some agents use attorneys to prepare legal documents for a closing. Attorneys are frequently retained to represent the parties in a commercial transaction.

Witness Requirements

No Witnesses are required on a deed or security interest.

Mortgage/Transfer Tax

None

Spousal Joinder Requirements/Homestead

New Mexico is a community property state. All property acquired by husband and wife is presumed to be community property. Sections 40-3-8(B) and 40-3-12(A) NMSA 1978. Joinder of title-holding spouse is required by state statute in the execution of a conveyance deed or a security instrument. If joinder is lacking, the transaction may be ratified by the non-joining spouse, otherwise the deed or security instrument is void. See Section 40-3-13 NMSA 1978. Joinder of the non-title holding spouse is typically added to a conveyance deed and to the security instrument “pro forma”. NM now recognizes same sex marriages and community property laws apply to them in the same way.

Instrument Requirements

Certificates of Release

Title insurance underwriters (not agents) have the authority pursuant to state statute to execute and record releases of mortgages or deeds of trust subsequent to a 90-day period after payment in full of the mortgage or deed of trust and upon 10-day prior written notice to the lender. See Section 48-7-4.1 NMSA 1978.

Who May Serve As Trustee On Deed Of Trust

Per Section 48-10-6, NMSA 1978, a trustee under a deed of trust shall be:

• an organization doing business under the laws of New Mexico as a bank, trust company, savings and loan association, escrow company or title insurance company including an agent or underwriter;

• an individual who is a member of the state bar of New Mexico;

• an organization which is licensed, chartered or regulated by the federal deposit insurance corporation, the comptroller of the currency, the federal savings and loan insurance corporation, the federal home loan bank, the bureau of federal credit unions or any successors; or

• the parent corporation of any association or corporation referred to in this subsection or any subsidiary corporation all the stock of which is owned by or held solely for the benefit of any such association or corporation referred to in this subsection.

The trustee of a deed of trust or its parent or subsidiary corporation shall not be the beneficiary of the deed of trust.