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New York Foreclosure Law
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.
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