Foreclosure Guidelines in New York

Highlights:

Judicial/ Non-Judicial Foreclosure: Available/ Available

Right of Redemption / Deficiency Judgment: No / Yes

Timeline: 120 Days, Can vary depending on individual cases

Deed of Trust / Mortgage as Security Instruments: Deed of Trust, Mortgage

Both Judicial and Non-Judicial foreclosure processes are available in New York.

Judicial Foreclosure process:   

A Judicial foreclosure process requires the lender to file a lawsuit against the borrower if they happen to default on their mortgage payments. The court would verify on the default and if the default is confirmed, it gives some time for the borrower to pay up their dues along with interests and other charges. If the borrower does not pay their dues by the said date, the court will issue an order authorizing the foreclosure process. The foreclosure process is generally conducted by a Sheriff or a Referee.

The foreclosure notice including the date/ time/ location of the foreclosure proceedings is advertised in a local newspaper for 4-6 weeks, before the foreclosure sale. On the sale date, the property is sold off to the highest bidder through a public auction in which even the lender may choose to bid.

Once the foreclosure sale is completed, the officer conducting the sale should arrange for a deed to be given to the highest bidder and is also responsible for paying the loan value along with interests to the lender. Once this payment is made to the lender, the officer collects the receipt for the same.

This sale is not confirmed up to three months after the filing of the sale report in the court, unless authorized otherwise by the court. The officer conducting the sale is  expected to file the receipt and other documents (including a sale report) with the court clerk within 30 days after the foreclosure sale is completed.

Non-Judicial Foreclosure process:

If a power of sale is present in the Deed of Trust/ Mortgage documents, the Non-Judicial foreclosure process can be followed. The power of sale authorizes the lender or their authorized representative (referred to as Trustee) to conduct the foreclosure proceedings. Although the Non-Judicial Foreclosure process is available in New York, its rarely followed.

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