How to Stop Bank Foreclosure Actions in NYC

To stop a bank foreclosure in the city of New York requires the borrower to act quickly once they receive the notice of foreclosure. New York City uses the court system to process most foreclosures, this is called a judicial foreclosure. Although New York allows nonjudicial foreclosures, these are very uncommon. Nonjudicial foreclosures allow the lender to sell the property to recover the mortgage debt. Several methods are available to stop either type of foreclosure.

Instructions

1. Contact the Neighborhood Housing Services of New York City at 212-519-2500 or the Parodneck Foundation at 212-431-9700. These are organizations in New York City that have received a federal grant through the State of New York Mortgage Agency (SONYMA), to provide free foreclosure assistance to residents. One of the counselors provided will help you identify state and federal assistance to stop bank foreclosures.

2. Go to a New York City bank branch to apply for a refinance. To refinance you usually need good credit and a steady income. Applying at the branch can expedite the refinance process, allowing you to have the funds to stop the bank foreclosure by paying off the original mortgage.

3. Create a short sale in New York City to stop the foreclosure. Short sales allow the borrower to sell the property to a third party for a portion of the amount owed. You have to speak to your lender to be sure they will accept this lesser amount as your debt being paid in full.

4. Contact a reputable New York bankruptcy attorney to file a chapter 13 bankruptcy. Filing a bankruptcy will stop the foreclosure and lower your monthly payments toward all of your debt. Having an attorney with a good reputation is important since you are dealing with the foreclosure time line.

5. Give up your property to the lender to stop the bank foreclosure. You can follow the deed in lieu process and release ownership to your lender, similar to a voluntary repossession in New York. The lender usually will not accept this option unless you have tried a short sale first.

Tips & Warnings

• When you follow a deed in lieu the lender will mark your debt as paid in full, leaving you without a foreclosure on your credit history.

• A bankruptcy will leave a negative mark on your credit history. Use this option as a last resort, bankruptcies do not come off for seven years.

References

• NY Homes: Foreclosure Prevention Counseling
• Stopping Bank Foreclosure: New York Foreclosure Procedures
• Experian: Frequently Asked Questions