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Tuesday, April 11, 2017

Foreclosure Process in New York

In the State of New York there is a formal legal process a lender must follow in order to foreclose on a home it holds the mortgage to. The first step under New York State law is for the lender to provide the homeowner with a formal notice of its intent to foreclose if the mortgage arrears are not paid by a specified date. Said notice must be provided to the homeowner at least ninety (90) days before the lender commences the foreclosure proceeding. The law also provides that the notice contain specific language and that the lender provide the name of at least five (5) non-profit housing counseling agencies. Failure to strictly comply with all of these requirements could be grounds for the dismissal of the foreclosure action.

After the ninety (90) days have elapsed, the lender can then commence formal foreclosure proceedings by filing a Summons & Complaint with the court and serving said papers on the homeowner. Simultaneously with the Summons & Complaint, the lender will file and serve a Lis Pendens, the purpose of which is to put everybody on notice that the title of the property is in litigation. The service of these papers on the homeowner starts the clock ticking for the homeowner to prepare and serve a formal answer to the bank's foreclosure proceeding. The homeowner's answer should respond to the allegations contained in the lender's Summons & Complaint and contain any defenses they might have to the foreclosure action. The time for the homeowner to serve and file their answer is dependent on how the foreclosure papers were served on them. It is imperative that the homeowner serve and file its Answer in a timely fashion. Failure to do so could result in the homeowner waiving certain legal defenses or being held in default. If a homeowner is held in default, the foreclosure process can be accelerated by the lender by first requesting that the court appoint a referee (whose job is to calculate the total amount owed under the mortgage) and then obtaining a Judgment of Foreclosure and Sale thereby allowing the lender to auction the home.

After the Answer if filed with the court and served on the homeowner, New York law provides for a mandatory settlement conference. This is the most important part of the foreclosure proceeding as it is the homeowner's opportunity to try to settle with the mortgage holder in a semi-informal setting. The conference is overseen by a court appointed referee whose job is to make sure both parties are acting and negotiating in god faith. It is during these conferences that a majority of foreclosure actions are settled. Settlement could include mortgage modification, agreement to short sale the property, or other foreclosure alternatives such as a deed in lieu. A homeowner must be familiar with all these types of available options in order to ensure they are making a sound financial decision.

If a settlement cannot be reached, the foreclosure proceeding will then continue through the normal litigation process. This includes conducting discovery (e.g. exchanging of documents, conducting depositions), filing motions, and possibly a trial.

The foreclosure process is a complex one with many legal pitfalls. Our attorney, Steven A. Campanaro, is experienced in representing homeowners throughout every phase of foreclosure proceedings. From the filing of an Answer thru trial, we provide representation and guidance you can trust. Your home is your biggest asset and you should have an experienced attorney on your side to help you protect it. If you were served a Summons & Complaint seeking to foreclose on your home contact our office for a free consultation.

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