If I Lose My Home to Foreclosure in New York, Can I Get It Back?

Some states have a law permitting foreclosed homeowners to repurchase their home after a foreclosure sale during a "redemption period." However, New York isn't one of them.

You can redeem the property before the foreclosure sale by paying the loan balance in full. Or, you might be able to make another arrangement with the lender before the sale that will allow you to keep the property. For example, the lender might agree to modify your loan, or you could get caught up on what you owe and reinstate the loan. But you must arrange one of these options before the sale happens.

What Is the Right of Redemption After a Foreclosure Sale?

In about half of the states, homeowners get one final chance to save their home, even after a foreclosure sale. The right to redeem the property after a foreclosure sale is called a "statutory" right of redemption because it's set out in the state statutes (laws).

Suppose your state provides a statutory right of redemption. In that case, you get a redemption period, which is a limited amount of time to repurchase the home from the person or entity that bought it at the foreclosure sale. Depending on state law, you must either reimburse the purchaser for the price paid at the sale or pay off the full amount you owed on the mortgage loan, plus foreclosure fees and costs.

Basically, the redemption period gives you some additional time after the foreclosure sale to find funding to buy your home back. The length of the redemption period following the sale, if available, varies widely depending on state law and the particular circumstances.

Right of Redemption After Judicial and Nonjudicial Foreclosures

In some states, foreclosures are always judicial, which means they go through the court system. In others, the foreclosure process is typically nonjudicial (out of court), although these states also permit judicial foreclosures.

Right of redemption in judicial foreclosure states. States that use a judicial process to foreclose often give homeowners the right of redemption after a foreclosure. Even if state law doesn't provide an actual redemption period after the sale, some states allow a very limited amount of time for the homeowner to redeem until certain post-sale formalities are completed. For example, the homeowner might be able to redeem up until the court confirms the foreclosure sale.

Right of redemption in nonjudicial states. Except for a few states, there is generally no redemption period after a nonjudicial foreclosure. States that allow nonjudicial foreclosures sometimes have more than one law for redemption periods—one that applies to nonjudicial foreclosures and another to judicial foreclosures. In general, these states tend to provide a redemption period following a judicial foreclosure, but not after a nonjudicial one.

What Are the Rights of Redemption in a New York Foreclosure?

In New York, you don't get a post-sale redemption period. But you may redeem the home before a foreclosure sale.

No Right to Redeem After a Foreclosure Sale in New York

Foreclosures in New York are "judicial," which means the lender must file a lawsuit in court to foreclose. As part of the foreclosure process, the court will enter a judgment and order the home sold to satisfy the debt.

Unlike many other judicial foreclosure states, New York law doesn't provide a redemption period for foreclosed homeowners after the sale. The relevant New York statute requires conveyance of the home to the purchaser after the foreclosure sale. (N.Y. Real Prop. Acts. Law § 1353).

Right of Redemption Before a Foreclosure Sale in New York

No matter your state, you get the right to redeem the home before a foreclosure sale occurs. This right is called an "equitable right of redemption." It's based on the idea that it's fair to let a homeowner keep the home if they pay off the mortgage debt even if they're already in default and the lender has initiated foreclosure proceedings.

In New York, you can redeem up until the sale of the property. But after the home is sold pursuant to a judgment of sale, you no longer have a right of redemption.

What Are the Costs Involved in Redeeming a Home in New York?

To redeem the home before the sale, you'll have to pay the full amount of the mortgage debt, including costs and interest.

You can find out the procedure and the exact amount needed to redeem your home before the sale by calling the foreclosing lender's attorney. You might also consider consulting with a New York attorney who can guide you through the process.

What Are the Steps to Take to Redeem My Home in New York?

If you want to redeem the property before the sale, contact your loan servicer to find out the amount you must pay.

What Happens If I Can't Afford to Redeem My Home in New York?

Most homeowners going through a foreclosure don't have enough money to redeem. You might have other options for saving your home besides redeeming the property, but you must do so before the sale. For example, you could reinstate the mortgage loan by catching up on the past due amounts. Under New York law, you can reinstate at any time before the sale. (N.Y. Real Prop. Acts. Law § 1341).

But it's a good idea to complete a reinstatement before the final judgment because the court will then dismiss the foreclosure. If you reinstate after judgment but before the sale, the sale will be stayed (postponed). The downfall? If you later default, the court can order enforcement of the judgment, and the lender can sell the house.

Another option is to arrange a foreclosure alternative with the lender that would allow you to stay in the property, such as a mortgage modification or repayment plan.

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Talk to a Lawyer

If you have questions about New York's foreclosure process or want to learn about potential defenses to a foreclosure and possibly fight a foreclosure in court, consider talking to a foreclosure attorney.

Talking to a HUD-approved housing counselor about different loss mitigation options is also a good idea.