New York Foreclosure Laws

Foreclosure Process Overview

New York foreclosures are handled either in court or out of court, although court foreclosures are more common. New York foreclosures can take up to 15 months, which is longer than most other states.

Pre-foreclosure Period

Before initiating the foreclosure process, the lender may send a warning of impending foreclosure to the borrower, but this is not required in New York.

When processing a foreclosure through the court system, the lender files suit against the borrower for the amount in default. The borrower is notified of the foreclosure proceedings and is required to appear in court to respond. In addition, a lis pendens (notice of pending lawsuit) is recorded.

If the borrower does not appear, the court can rule against the borrower, allowing the foreclosure sale. If the borrower appears, the court considers the case before ruling whether the property can be foreclosed on. If the court rules against the borrower, a foreclosure sale is scheduled. The foreclosure proceedings leading up to the court ruling usually take 7-9 months.

Notice of Sale / Auction

The sale is usually scheduled at least 4 months after the court ruling. The notice of sale must be published in a general circulation newspaper once a week for at least 4 weeks prior to the sale.

In New York, foreclosure sales are made by public auction, usually at the county courthouse. The property is sold to the highest bidder and anyone, including the lender, may bid. The winning bidder typically has to pay 10 percent of the final bid at the sale and the remaining balance within 30 days. When the full amount is paid, the winning bidder takes ownership of the property. Borrowers have no right of redemption after the sale.