New York Mortgage Foreclosure Process
More than 2,700 New York homeowners faced foreclosure in February 2011, according to RealtyTrac. "Newsday" reported that February 2011 foreclosures included 700 in Long Island, 340 in Nassau and nearly 400 in Suffolk. The foreclosure process in New York can take up to 15 months, according to RealtyTrac, the longest process in the U.S. Lenders must go through the court system to foreclose on a home in New York and after a foreclosure sale occurs the borrower cannot reclaim the property.
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Judicial Foreclosure Process
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New York uses a judicial process for foreclosures. Supreme Courts, located in each county, hear foreclosure cases. The lender must file a complaint with the court in the same county as the property location. The lender must also file a "lis pendens," which gives public notice of the foreclosure proceeding. The borrower must respond to the complaint by filing an answer with the court. Once the borrower files an answer, the court decides whether the evidence proves the case for foreclosure. In the event a borrower fails to file an answer, the judge can rule in favor of the lender and schedule the sale of the property.
Settlement Conference
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After a borrower receives the complaint, the court schedules a settlement conference. The conference must occur within 60 days and offers an opportunity for the lender and borrower to come to a mutual agreement to settle the default. If a lender and borrower reach an agreement during the settlement conference, the process can resolve without foreclosing on the property. In the event the parties do not reach an agreement, the court rules on the foreclosure complaint.
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Property Sale
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Foreclosure sales typically take place four months or more after the judge makes a ruling and occur in the form of a public auction. Prior to the auction, the lender must publish a notice of the impending sale in a newspaper, once per week, for a minimum of four weeks. Anyone can bid on the property; the highest bidder becomes the new owner.
Right of Redemption
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A "right of redemption" gives the borrower a specified period of time to reclaim the property after the foreclosure sale by repaying all default funds and foreclosure costs to the lender. The state of New York does not offer borrowers a right of redemption.
Deficiency Judgments
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In the event a foreclosure auction does not yield enough money to satisfy the debt owed by the borrower, the lender can file for a deficiency judgment from the court. A deficiency judgment allows the lender to sue the borrower for additional money to recoup losses from a loan. Lenders must file for a deficiency judgment no more than 90 days after the sale of a property.
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References
- RealtyTrac: February 2011 Foreclosure Rate Heat Map
- Newsday: 717 More LI Homes in Foreclosure Process
- RealtyTrac: Foreclosure Laws and Procedures By State
- RealtyTrac: New York Foreclosure Laws
- State of New York Banking Department: Help for Homeowners Facing Foreclosure
- Foreclosure: New York Foreclosure Laws
Resources
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