Bank of America, NA v. B.A. Mortgage, LLC
Court of Appeals of New Mexico
111 P.3d 226 (2005)
After B.A. Mortgage (defendant) foreclosed and sold the property, generating a surplus, Bank of America (plaintiff), a junior mortgagee that had intervened and timely filed its lien claim but had not yet obtained judgment on the lien, and the mortgagor's assignee of the right of redemption (defendant) both claimed the surplus. The trial court awarded the surplus to the assignee, reasoning the junior mortgagee's lien was extinguished by the sale absent a judgment, and the junior mortgagee appealed.
Whether a foreclosure-sale surplus must be distributed according to lien priority, with a junior mortgagee entitled to the surplus ahead of the right-of-redemption holder even without first obtaining judgment on its lien.