Summary of New York's Foreclosure Laws

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If you are facing foreclosure in New York, it’s important to understand some of the basics, including:

  • the most common type of foreclosure procedure (judicial v. nonjudicial) used in New York
  • how much time you have to respond
  • your rights and protections in the process, and
  • what happens afterwards (for example, whether you’ll be liable for a deficiency judgment).

Below we have outlined some of the most important features of New York foreclosure law. Keep in mind that this is just a summary; we’ve included statute citations so you can get more details from the laws themselves. And be sure to check out Nolo’s extensive Foreclosure section, where you can find information about all aspects of foreclosure, definitions of foreclosure terms (like redemption and reinstatement), and options to avoid foreclosure.

Topic

State Rule

Most common type of foreclosure process

Judicial

Time to respond

Foreclosing party must provide advisory to homeowner at least 90 days before filing foreclosure complaint. Complaint must be accompanied by notice regarding legal options and explanation of foreclosure procedure. Homeowners have 20 to 30 days to respond to complaint, depending on whether they are served personally or by another method. Notice of sale resulting from judgment in favor of foreclosing party must be served by publication.

Reinstatement of loan before sale

Available any time before final foreclosure judgment (foreclosure will be dismissed) and any time before sale (foreclosure will be stayed).

Redemption after sale

Not available

Special protections for foreclosures involving high-cost mortgages

Prior to beginning foreclosure action on high-cost loan, subprime loan, or “nontraditional” loan, foreclosing party must send 90-day notice of intent to foreclose and contact information for government-approved housing counselors. N.Y. Real Prop. Acts. Law § 1304. If lender violated provisions that apply to high-cost loans, homeowner may use this as a defense against foreclosure. N.Y. Banking Law § 6-l, N.Y. Real Prop. Acts. Law § 1302.

Special state protections for service members

New York has a law that is similar to the federal Servicemembers Civil Relief Act that applies to those on federal active duty or state duty pursuant to an order of the governor. Among other things, it provides that a service member may apply to the court for a stay of proceedings (postponement) in a foreclosure action under certain circumstances. N.Y. Mil. Law §§ 301 through 328.

Deficiency judgments

Allowed if homeowner is personally served or appears in the lawsuit. The amount is the amount of the debt less the higher of the fair market value or the sales price.

Cash exempted in bankruptcy

About $12,725 for one person, $25,450 for a married couple under federal bankruptcy exemptions. Up to $11,000 if single; $22,000 if filing jointly under state bankruptcy exemptions.

Notice to leave after house is sold

New owner must give former owner a ten-day notice to quit (leave) and then ask the court for possession. The court petition must be served on former owner five to 12 days before the court hearing on the petition.

Foreclosure statutes

N.Y. Real Prop. Acts. Law §§ 1301 to 1391

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