The Foreclosure Process in New York

The foreclosure process beings when:

• A homeowner misses a payment.  After 15 days, the lender or a collections agency is likely to call.  The homeowner will also be hit with a penalty fee for not making a payment.
• After 60 days, the lender will issue the homeowner a "notice of default," which notifies the homeowner that he/she has defaulted on their mortgage.   At this time, the homeowner will be asked to pay the outstanding balance on their mortgage.  Late fees are also likely to apply.
• If the homeowner does not pay three months worth of mortgage payments, the lender will file a Lis Pendens, or "suit pending." This is a lawsuit against the homeowner in which the lender is suing the homeowner for defaulting on the mortgage.
• The homeowner has 20 days to respond to the complaint.  If the homeowner answers the complaint within 20 days, he/she can defend themselves at hearing.  If the homeowner fails to respond, then the lender will pursue a summary judgment hearing against the homeowner.
• If the summary judgment is granted, a referee will be appointed by the court to determine the amount the homeowner still owes on his/her mortgage. The referee will then decide how the property will be sold.
• The referee will write everything down in a report to be filed with the court. As soon as the court confirms the report, a judgment of sale will be issued.
• About 45 days after the hearing, either the referee or the sheriff of the county where the property is located will conduct an auction of the property at the time and place specified in the notice of sale. Whoever is the highest bidder will receive the deed to the property at the end of the sale.
• Within one or two days following the foreclosure auction, the homeowner must leave the home.
• After the sale, the lender has the right to sue the homeowner for any money he or she may still owe on the house.  This suit must be filed within 90 days of the sale.