In the state of New York, the foreclosure process is judicial, meaning it involves court proceedings. The timeline for foreclosure in this state can be quite lengthy compared to others, often taking a year or more. You can compare these two solutions bankruptcy vs debt settlement, and this article will also provide a detailed overview of the New York State foreclosure timeline.

The Foreclosure Process in New York

Pre-Foreclosure Notice

The foreclosure process begins when the homeowner defaults on their mortgage payments. After at least 90 days of missed payments, the lender is required by New York law to send the borrower a pre-foreclosure notice. This notice must inform the borrower of the default and provide information about how to cure it, among other things.

Lis Pendens Notice

If the borrower fails to cure the default within the 90-day period, the lender can then initiate the foreclosure process by filing a lis pendens (public notice of pending litigation) with the county clerk. The lender must also serve the borrower with a summons and complaint, either in person or by mail.

Response to the Summons and Complaint

The borrower has 20 days to respond if they were served in person, or 30 days if served by mail. If the borrower contests the foreclosure, the case will go to trial. If they do not respond, the lender can seek a default judgment from the court.

Settlement Conference

For owner-occupied residences, the court will schedule a mandatory settlement conference within 60 days of the filing of the proof of service. The purpose of this conference is to explore potential alternatives to foreclosure.

Judgment of Foreclosure and Sale

If no resolution is reached at the settlement conference or if the borrower does not respond to the summons and complaint, the lender can move for a judgment of foreclosure and sale. This judgment authorizes the sale of the property to satisfy the debt.

Auction Sale

The property is then sold at a public auction. The highest bidder becomes the new owner of the property. If there are no bids, ownership reverts to the lender.

Deficiency Judgment

If the sale price of the property is insufficient to cover the debt, the lender may seek a deficiency judgment against the borrower for the remaining amount. However, the borrower has the right to argue that the property was sold below its fair market value.

The Foreclosure Timeline in New York

Given the steps involved, the foreclosure process in New York can take a significant amount of time. On average, it takes about 445 days (or about 15 months) from the date of the first missed payment to the end of the foreclosure process. However, contested foreclosures can drag on for two years or more.

Conclusion

Navigating the New York State foreclosure process can be a complex and stressful endeavor. However, understanding the timeline and stages involved can help homeowners know what to expect and make informed decisions. It’s always recommended to consult with a legal professional when facing foreclosure to ensure you understand your rights and options.

FAQs

What is the typical timeline for a foreclosure process in New York State?

The New York State foreclosure process can take up to 445 days, starting from the date of default until the property is sold at auction. This timeline can vary depending on a variety of factors including the court’s schedule and whether the borrower chooses to fight the foreclosure.

What is the first step in the New York State foreclosure process?

The foreclosure process in New York State begins with a pre-foreclosure notice. This is a written notice from the lender to the borrower that they are at least 90 days behind on their mortgage payments. The notice will outline the amount owed and provide a minimum of 90 days to pay off the default amount and avoid foreclosure.

What happens after the pre-foreclosure notice in New York State?

If the borrower does not pay the default amount within the 90-day period, the lender can then file a lis pendens, which is a public notice of the lender’s intent to foreclose on the property.

How long do I have to respond to a foreclosure summons and complaint in New York State?

Once the summons and complaint are served, the borrower has 20 days to respond if the papers were delivered personally, or 30 days if they were received by another method.

What is a settlement conference in the New York State foreclosure process?

A settlement conference is a meeting between the borrower and the lender aimed at reaching a mutual agreement to avoid foreclosure. This can include loan modification, a short sale, or a repayment plan.

What happens if an agreement isn’t reached at the settlement conference?

If an agreement can’t be reached, the lender can request a judgment of foreclosure from the court. If granted, the property will be sold at auction.

Can I stop the foreclosure process once it has started?

Yes, the foreclosure process can be stopped by paying the default amount, negotiating a modification with the lender, or filing for bankruptcy.

What happens to the property after a foreclosure auction in New York State?

After the foreclosure auction, the highest bidder becomes the owner of the property. If there are no bidders, the property goes back to the lender.

What are my rights as a borrower during the foreclosure process in New York State?

Borrowers have the right to be served with notices, to respond to the complaint, to attend a settlement conference, and to stay in the property until the foreclosure process is completed.

Where can I get help if I’m facing foreclosure in New York State?

If you’re facing foreclosure, consider seeking legal assistance. The New York State Attorney General’s website provides resources on foreclosure prevention, including a list of housing counseling agencies approved by the U.S. Department of Housing and Urban Development.

Glossary

• Foreclosure: A legal process where a lender attempts to recover the balance of a loan from a borrower who has stopped making payments to the lender by forcing the sale of the asset used as the collateral for the loan.
• Borrower: An individual or company that has received money from another party with the agreement that the money will be repaid.
• Lender: An individual, public or private group, or financial institution that provides funds to a borrower with the expectation that the funds will be paid back.
• Collateral: An item of value used to secure a loan, which can be taken by the lender if the borrower fails to pay back the loan.
• Loan Default: A failure to pay a loan according to the terms agreed to in the promissory note.
• Notice of Default: A public notice filed with a court stating that the borrower is in default on their mortgage payments.
• Pre-Foreclosure: The period after a default notice is issued but before the property is sold at auction.
• Auction: A public sale where the property is sold to the highest bidder.
• Short Sale: A sale of real estate in which the net proceeds fall short of the debts secured by liens against the property.
• Deed-in-Lieu: A document that transfers the title of a property from the borrower to the lender to avoid foreclosure.
• Deficiency Judgment: A judgment against a borrower for the remaining balance on a loan if the property fails to sell for enough at auction to cover the debt.
• Redemption Period: A period of time granted to the borrower after a foreclosure sale during which they can reclaim their property.
• Lis pendens: A written notice that a lawsuit has been filed which concerns the title to real property or some interest in that property.
• REO (Real Estate Owned): A class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction.
• Mortgage: A loan to purchase a home or other real estate.
• Equity: The difference between the current market value of a property and the amount the owner still owes on the mortgage.
• Judicial Foreclosure: A type of foreclosure process that is handled through the state court system.
• Non-Judicial Foreclosure: A type of foreclosure process that does not involve the court system.
• Loan Modification: A change made to the terms of a loan by the lender as a result of the borrower’s long-term inability to repay the loan.
• Foreclosure Mediation: A legal process in which a neutral third party (a mediator) helps the borrower and lender communicate and negotiate to try to resolve the foreclosure issue.