New York Foreclosure Process – Steps by Lender or Servicer of the Loan
When a homeowner in New York misses one or more mortgage payments, the bank or financial institution that holds their mortgage has the right to start foreclosure proceedings. In New York, the foreclosure process follows these steps:
- The first step in the foreclosure in New York takes place when the lender sends the homeowner a “90 Day Pre-foreclosure notice.” Many homeowners ignore this notice in the hopes that the bank will forget or somehow go away. Homeowners facing foreclosure should contact a New York Foreclosure attorney immediately as acting once a notice is received is extremely important. At this stage, there may be options to help avoid the foreclosure including loan modification.
- At the end of the 90-day notice period, the lender files a “Lis pendens” (a formal notice of a pending legal action) and the lender/bank will “accelerate” payments.
- A formal complaint is filed by the lender and the complaint and summons are served on the homeowner notifying them of the complaint and upcoming court date.
- The homeowner has 20 days to file an answer to the complaint. Filing an answer to a foreclosure complaint is extremely important. The homeowner should consult with a lawyer experienced with the New York Foreclosure process and with filing answers in response to foreclosure actions. Not including defenses in the answer waives the right to bring those defenses up later which can assist the bank with speeding up the foreclosure process.
- Mandatory Settlement Conference is held. The bank and the homeowner have to come to court to explore ways to settle the foreclosure. There might be a few of these conferences. If you didn’t file an answer but appear, the homeowner gets thirty more days to file their answer.
- The discovery process begins in which both the bank and homeowner began to collect information about and from the other party.
- Motion for summary judgment is filed and if the bank/lender/mortgage holder loses, the case is set for trial. This is a key point in the foreclosure process. If a homeowner has not already done so, they should contact an experienced New York Foreclosure Defense attorney immediately to discuss their options as their time is ticking.
- Without representation, the lender usually wins the motion for summary judgment at which point they file a motion for Order of Reference which asks the court to assign a referee to establish how much money is actually owed by the homeowner. Once the referee is assigned, they draft a report outlining the amount owed. In order to properly defend against a motion for summary judgment, the homeowner must file an answer or opposition to the motion.
- Motion for Judgment of Foreclosure and Sale is then submitted by the bank in which the bank asks the court to enter a judgment of sale.
- If the court grants the motion, the Judge will order the sale of your house and the appointed referee chooses a sales date for the auction of your house. Sale dates are advertised at least 21 days prior to the date.
- Public Auction is held and your house is sold to the highest bidder and you are legally evicted from your home so that the new owner can take possession.
At any time during the foreclosure process, the lender and homeowner can enter an agreement to stop the process. This usually occurs when the parties agree to a loan modification or short sale.
Jason Bost is a Foreclosure Defense Attorney and partner with New York’s premier foreclosure defense law firm, Patel, Soltis & Cardenas LLC. You can contact him by email with any questions you might have regarding the foreclosure process in New York or give him a call toll free at 973-200-1111 x 50.