New York Foreclosure Laws

Foreclosure laws in New York allow judicial and non-judicial proceedings. The presence of a Power of Sale clause in the loan document determines if the foreclosure will be handled in-court or out-of-court. Typical foreclosure timeline is up to 15 months.

Judicial And Non-Judicial Foreclosure Information

Non-judicial foreclosures are applicable when Power of Sale clause is signed in the mortgage loan. This provision authorizes the lender to pursue a foreclosure on a property in the event that the borrower defaults on payments. Initiating an out-of-court foreclosure can be done without obtaining a court order. Borrowers who signed Power of Sale clause are aware of the consequence if they fail to meet the terms stated in the contract. To begin the foreclosure procedure, the lender needs to send a notice to borrower informing him or her of the impending foreclosure on a property in question. This will give time to borrower to cure debt.

New York foreclosure handled within court system requires the lender to file a complaint or lis pendens against the borrower due to defaults on payments. The borrower will be informed of the foreclosure action and is required to show in court. A 20-day timeframe is given to the borrower to answer the complaint. If the borrower does not respond to the lawsuit, the court may rule against the person and a foreclosure sale will be scheduled for at least 4 months after the court ruling.

Under New York foreclosure laws, borrowers or homeowners can stop the foreclosure proceedings up until the date of the foreclosure sale. In order to do this, they have to make a full payment of the arrears and any applicable cost.

Statutory right of redemption is not permitted in New York. For other states that allow redemption, a person whose property has been foreclosed can repossess the said property. In order to accomplish this, the homeowner should make a full payment of the amount outstanding plus applicable costs.

Deficiency judgment is granted in New York foreclosure. If the proceeds of the foreclosure sale is less than the amount of the mortgage loan, lenders may claim for deficiency. When deficiency claim is granted, the borrower needs to pay for the difference between the amount of the property sold for at sale and the amount of the original loan. Petitioner should file for deficiency judgment within 90 days after the property is sold at the foreclosure sale.

Notice Of Sale New York

For four successive weeks, a Notice of Sale should be published in a local newspaper before the auction will take place. The foreclosure sale resembles that of a public auction where the highest bidder is awarded with the property. Right after sale, the winning bidder should give deposit of 10%. The remaining balance should be paid within 30 days before a full transfer of property ownership occurs.