HELP OUT OF FORECLOSURE: |
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sitting down. Many people don't know what to do, fail
to take action and eventually lose their home with nothing
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Marco
Larocca
Foreclosure
Expert |
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If you need advice, ASK AN EXPERT!
You may have specific questions that need
to be answered. We have special services to help many cases
of foreclosure.
Of course, everyone has different reasons why they're facing
foreclosure. Let us know YOUR specific situation so we can
help you in the best way possible.
I
have a lot of Equity, can't I
Just Refinance using my equity? |
Of
Course You Can! It's called
a Foreclosure Bailout Loan, and
though not many lenders offer it,
we do offer that option to you as
part of our many services. Read
about Foreclosure Bailout
Loans |
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New York
Foreclosure Law
Quick Facts
- Judicial Foreclosure Available: Yes
- Non-Judicial Foreclosure Available: Yes
- Primary Security Instruments: Deed of Trust, Mortgage
- Timeline: Typically 120 days
- Right of Redemption: No
- Deficiency Judgments Allowed: Yes
In New York , lenders may foreclose on deeds of trusts or
mortgages in default using either a judicial or non-judicial
foreclosure process.
Judicial foreclosure
(Foreclosure by Lawsuit) is the primary method of foreclosure
in New York. The lender must file a complaint against the
borrower and obtain a decree of sale from a court having jurisdiction
in the county where the property is located before foreclosure
proceedings can begin. Generally, if the court finds the borrower
in default, they will give them a set period of time to pay
the delinquent amount, plus costs. If the borrower does not
pay within the set period of time, the court will then order
the property to be sold by the sheriff of the county or a
referee.
Judicial foreclosure begins when the lender files a lawsuit.
The lender will sue the borrower and any person who has a
claim to the ownership or a possession interest. The lender,
as plaintiff, has a summons and a complaint served on the
borrower. The summons commands the borrower to come to court
and answer the lender’s complaint; the complaint is
the lawsuit proper, which describes the lender’s legal
and factual basis for foreclosure. A notice of lis pendens
must be filed. The lis pendens is a notice that a lawsuit
is pending, the outcome of which affects title. Often, the
borrower fails to answer. In that event, the court will appoint
a referee to compute a figure for the foreclosure. The court
may then sign a judgment of foreclosure and sale. If the borrower
appears and defends against the lawsuit, then the court will
determine the merits of the defense. The referee will need
an oral hearing. If the lender wins, then a judgment of foreclosure
and sale will be awarded.
Typically the foreclosure sale is advertised for 4 to 6 weeks.
The sale is made by public auction to the highest bidder.
The lender may bid, as well. The lender must distribute the
proceeds according to the terms of the judgment signed by
the judge. Surplus money will normally be held by a referee.
After the property has been sold, the officer conducting
the sale must execute a deed to the purchaser. The officer
must also pay, out of the proceeds, the amount of the debt,
including interest and costs, to the lender and then obtain
a receipt for the payment from the lender.
Within thirty days after the completing the sale and executing
the deed to the purchaser, the officer must file a report
of sale, which must include the receipt from the lender, with
the clerk of the court. Unless otherwise ordered by the court,
the sale can't be confirmed until three months past the filing
of the report of sale.
If the mortgage contains an express covenant to pay, then
the lender may seek a deficiency judgment against the borrower
if the court ordered sale does not produce sufficient funds.
The lender can ask the court for a deficiency judgment for
the amount left unpaid after the foreclosure sale. The motion
for the deficiency judgment must be made within 90 days after
the foreclosure sale. The court must determine the market
value and credit the greater of the market value or the foreclosure
sales price against what remains unpaid on the loan.
After the judicial foreclosure, there is no redemption period.
This is true of non-judicial foreclosure, as well.
Non-Judicial Foreclosure
The non-judicial process of foreclosure is used when a power
of sale clause exists in a mortgage or deed of trust. A "power
of sale" clause is the clause in a deed of trust or mortgage,
in which the borrower pre-authorizes the sale of property
to pay off the balance on a loan in the event of the their
default. In deeds of trust or mortgages where a power of sale
exists, the power given to the lender to sell the property
may be executed by the lender or their representative, typically
referred to as the trustee. Non-judicial foreclosure procedures
are sufficiently intricate to lead to potential title disputes.
Such problems might make it very difficult to evict a tenant.
Junior lien holders might also dispute the title and tie the
matter up in litigation. Thus most lenders will elect a judicial
foreclosure.
Although this type of foreclosure is permitted in New York,
it is rarely used by lenders.
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