An Overview of the Foreclosure Process in New York
    Posted on 06/13/2022

When a property enters into foreclosure, New York state law provides the legal guidelines for the entire process. For some states, their properties are held in deeds of trust rather than mortgages making their foreclosure processes much easier to deal with than in New York. Because New York uses mortgages in lieu of deeds of trust, and it is also a judicial foreclosure state (there are only 10 states in the United States that can be considered judicial foreclosure states), the foreclosure auction process must go through the courts.

How Long Does The Foreclosure Process Take in New York?

For those who are afraid that their property might enter into foreclosure, or are already well into the process, they might be glad to learn that foreclosure proceedings in New York are typically long and drawn-out. The usual foreclosure process in New York takes around 15 months from start to finish. The following is a basic timeline:

-Days 1-15:  The first (or one of several) mortgage payments has not been made by the borrower.

-Days 16-30:  The creditor/mortgage company applies a late charge to the borrower’s account. The actual company that processes the payment for the creditor (known as the loan servicer) will also attempt to establish some form of contact with the borrower as well.

-Days 30-60: If the mortgage is for the house that the borrower resides in, either the loan servicer or lending institution is required to issue what is called a pre-foreclosure notice. They are legally required to issue this notice at least 90 days before the start of the commencement of foreclosure. The pre-foreclosure notice should include details such as how much money is owed by the borrower, as well as the information of five separate non-profit housing advisors from counseling agencies approved by the government.

-Days 45-60: A “breach” or “demand” letter is sent to the borrower stating that they have violated the agreed upon terms of the mortgage loan. These letters give the borrower a limit of 30 days to pay the required balance as well as late charge.

-Days 90 and above: It is at this point that the mortgage company and/or service provider will initiate the legal procedures required in New York for the actual foreclosure process to begin. This can encompass a wide range of possible actions including hiring an attorney to begin the foreclosure dealings, going through the court to officially record the formal notice of foreclosure (also called the ‘lis pendens’), or handing the loan off to the foreclosure department. After the foreclosure has been officially filed through the courts, the borrower will be issued a “summons and complaint” which basically informs them of what has happened regarding the foreclosure.

As soon as the summons and complaint has been served to the borrower, and the lender has filed proof of service with the court, the court then must setup what is called a “settlement conference.” This is where the borrower and lender (or representative of the lender) can meet and attempt to reach some sort of resolution in regards to the case. Remember that it is important to respond to the summons and complaint if one has been filed against you, because if you don’t respond then the court can deem the foreclosure of your property as valid by default.

The entire foreclosure process in New York takes about 15 months to complete from start to finish as previously mentioned. If the foreclosure is ended by sale of the house, the original owner (borrower) loses all rights to the property, and they cannot get their home back.    


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