How does a foreclosure work in NY?
New York is a judicial foreclosure state, which means that the lender has to sue the borrower in order to enforce their rights under the mortgage and note. If the lender wins the lawsuit, it obtains a judgment from the court, which allows the lender to sell the property at an auction.
It is important for you to know where you are at in the Foreclosure Timeline. Please use chart below to give you some understanding and guidance. Once you understand where you are at in this timeline or if you are still confused (we know this process can be very confusing) Call one of our homeowner advocates for further assistance you.
Typical Foreclosure Timeline
Day 1 Payment missed.
Day 15 Late fee assessed.
Day 30+ The lender sends you a Lis Pendens notice starting off a 90 day period in which to work out a solution to foreclosure. The notice must tell you how much you owe including interest and give notice of agencies you may contact for help.
Day 45+ The lender sends you a demand letter stating that you are in breach of the contract and giving you 30 days to pay the amount owed plus late fees.
Day 120+ 90 days after sending the Lis Pendens (pre-foreclosure) notice, the lender begins foreclosure proceedings. The bank files a notice of foreclosure on the property and serves you with a summons and complaint.
Day 140+ You have 20 days to respond after being served with a complaint for foreclosure. If you do not answer the lender may take a judgment against you and proceed with the sale of the property.
Day 180+ The settlement conference. After the complaint for foreclosure is served, the court clerk will schedule within 60 days a settlement conference. This is your chance to meet with a representative of the lender to discuss lowering your payments and your overall loan amount. You need to bring proof of income such as two recent pay stubs and your income tax return.
Sale of Property
Depending on whether you respond to the complaint, it may take several months for the court to enter a judgment against you allowing a foreclosure to proceed. After the judgment is taken, the lender may proceed with the sale. The sale must be published for four consecutive weeks. It is usually held on the courthouse steps and the buyer may take possession.
Please contact us for further information regarding this option as all banks/servicer's don't offer the same solutions.