Paul Clark
In this Blog we open the conversation with
economic loss caused by the current mortgage
crisis.
New
York State Foreclosure Laws
New York State
Foreclosure Laws: 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
New York State
Foreclosure Laws, lenders
may foreclose on deeds of trusts or mortgages in
default using either a judicial or non-judicial
foreclosure process.
Judicial Foreclosure
The New York State Foreclosure Laws judicial foreclosure process is one in which 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.
With New York state foreclosure laws, the sale is advertised for 4
to 6 weeks. The sale is made by public auction to
the highest bidder. Anyone may bid, including the
lender.
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.
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.
Although this type of foreclosure is permitted in
New York State Foreclosure Laws, it is rarely used by lenders.
