New York Foreclosure Laws and Procedures

If you've fallen behind on mortgage payments in New York, you're not alone and you have options. New York has some of the most borrower-friendly foreclosure laws in the country, offering protections throughout the foreclosure process.

Whether you've just missed one or two payments or have already received a foreclosure notice, understanding how the New York foreclosure process works can help you take control of your situation. From the 90-day preforeclosure notice to settlement conferences and defenses under the Foreclosure Abuse Prevention Act, homeowners in New York have powerful legal rights that could help them avoid foreclosure or stay in their homes longer.

New York has one of the longest timelines in the country, so you should have plenty of time to explore ways to avoid foreclosure. So, don't get caught off guard if you're about to go through a foreclosure. Learn about New York's foreclosure laws and your rights in the New York foreclosure process.

What Are My Legal Rights During Foreclosure in New York?

In a New York foreclosure, you'll most likely get the right to:

• receive preforeclosure notices
• apply for loss mitigation
• attend a settlement conference
• get notice of the foreclosure and the chance to respond in court
• get current on the loan and stop the foreclosure sale
• receive special protections if you're in the military
• pay off the loan to prevent a sale
• file for bankruptcy, and
• get any excess money after a foreclosure sale.

Once you understand the foreclosure process and your rights in New York, you can make the most of your situation and, hopefully, work out a way to save your home or at least get through the process with as little anxiety as possible.

What Is Preforeclosure and How Does It Work in New York?

The period after you fall behind in your mortgage payments, but before a foreclosure officially starts, is generally called the "preforeclosure" stage. Sometimes, people refer to the period before a foreclosure sale happens as "preforeclosure," too.

During this time, the servicer can charge you various fees. Also, federal law says the servicer must usually let you know how to avoid foreclosure. And your mortgage contract might require the servicer to send you a breach letter.

When Can a Lender Start Foreclosure in New York?

Under federal law, the servicer usually can't officially begin a foreclosure until you're more than 120 days past due on payments, subject to a few exceptions. (12 C.F.R. § 1024.41 (2025).) This 120-day period provides most homeowners ample opportunity to submit a loss mitigation application to the servicer.

Required Preforeclosure Notice in New York: 90-Day Notice

If the property is an owner-occupied, one-to-four-family dwelling, or a condominium unit, New York law requires the lender or servicer to send a notice to the borrower 90 days before starting the foreclosure that provides, among other things:

• information about how to cure the default, and
• a list of government-approved housing counseling agencies near the homeowner. (N.Y. Real Prop. Acts. Law § 1304 (2025).)

If the lender or servicer started the foreclosure but didn't send the 90-day notice when required by law or didn't strictly comply with notice requirements, you could have a powerful defense that might result in a dismissal of the foreclosure action.

The 90-day notice may include additional concise, relevant information. In the case of Bank of America v. Kessler, the New York Court of Appeals held that the servicer may include additional concise, relevant information in a 90-day preforeclosure notice. This additional information doesn't void the notice nor prevent a foreclosure action.

How Foreclosure Works in New York

If you default on your mortgage payments for your home in New York, the foreclosure will be judicial. A judicial foreclosure begins when the lender files a lawsuit asking a court for an order allowing a foreclosure sale. The lender gives notice of the suit by serving you a summons, complaint, and information about the foreclosure process. (N.Y. Real Prop. Acts. Law § 1303, § 1320 (2025).)

Lender Standing Requirements in New York Foreclosure Cases

Effective January 1, 2022, SB 5785 amended New York's foreclosure laws. Under the amended law, any foreclosure complaint initiated on a residential mortgage covering a one- to four-family dwelling after the law's effective date must contain an affirmative allegation that the plaintiff (the party initiating the lawsuit, which is usually the lender or loan servicer in a foreclosure) has "standing."

Specifically, New York's amended law requires the plaintiff to say in the complaint for foreclosure that it is the owner and holder of the subject mortgage and promissory note, or that it has been delegated the authority to start a mortgage foreclosure action by the owner and holder of the mortgage and note. (N.Y. Real Prop. Acts. Law § 1302 (2025).)

SB 5785 also requires the plaintiff to state in the complaint that it has complied with certain provisions of New York's existing foreclosure laws.

What Happens at a New York Foreclosure Settlement Conference?

For foreclosure actions involving borrower-occupied properties, New York law requires the court to hold a mandatory settlement conference within 60 days of the filing of the proof of service with the court clerk. At the settlement conference, the lender and homeowner attempt to reach a mutually agreeable way to avoid foreclosure. The court will send a notice to the parties advising them of the time and place of the settlement conference and the documents they should bring to the meeting. (N.Y. Civil Practice Rule 3408 (2025).)

Under state law, if the homeowner appears at the settlement hearing without a lawyer, the court should interpret it as a motion to proceed as "a poor person." Then, the presiding judge must determine whether the homeowner can continue through the foreclosure process unrepresented or if the court should appoint a lawyer (see Rule 3408 of the Civil Practice Law and Rules).

However, a class action lawsuit filed on June 7, 2023, said that courts failed to implement this rule. This case settled, and the New York State Office of Court Administration (OCA) agreed to implement the state law's protections for homeowners across New York State. Under the settlement, before an initial settlement conference is held in a foreclosure case, OCA will send a notice to homeowners to tell them about the purpose of the conference and what information they need to provide so the court can determine if the court should appoint counsel to represent the homeowners.

Also, under this settlement, homeowners in active foreclosure proceedings that began on or after December 1, 2022, and who were unrepresented at their initial settlement conference but didn't get an assessment about whether a lawyer should have been appointed to represent them, get a do-over of the conference, and the court will determine whether the homeowner should be appointed a lawyer.

Answering the Foreclosure Lawsuit

You generally get 20 days to file an answer after service of the foreclosure lawsuit (if the complaint and summons were served in person) or 30 days (if service was by mail or another way). If you don't respond to the suit, the lender will ask the court for, and probably receive, a default judgment, allowing it to hold a foreclosure sale.

What Is Summary Judgment in a New York Foreclosure Case?

But if you choose to defend the foreclosure lawsuit, the case will go through the litigation process. The lender might then ask the court to grant summary judgment. A summary judgment motion asks that the court grant judgment in favor of the lender because there's no dispute about the critical aspects of the case.

If the court grants summary judgment for the lender or you lose at trial, the judge will enter a judgment and order your home sold at auction.

Publication

A sale date is then set, published in a newspaper, and posted publicly in some cases. (N.Y. Real Prop. Acts. Law § 231 (2025).)

How Do Foreclosure Sales Work in New York?

At the sale, the lender usually makes a credit bid. The lender can bid up to the total amount owed, including fees and costs, or it may bid less.

In some states, including New York, when the lender is the high bidder at the sale but bids less than the total debt, it can get a deficiency judgment against the borrower. The property becomes "real estate owned" (REO) if the lender is the highest bidder.

But if a bidder, say a third party, is the highest bidder and offers more than you owe, and the sale results in excess proceeds (more than what's needed to pay off all liens), you're entitled to that surplus money.

What Are the Options Available for Borrowers During Foreclosure in New York?

A few potential ways to stop a foreclosure include reinstating the loan, redeeming the property before the sale, or filing for bankruptcy. Of course, if you're able to work out a loss mitigation option, like a loan modification, that will also stop a foreclosure.)

Or you might be able to work out a short sale or deed in lieu of foreclosure and avoid foreclosure. But you'll have to give up your home with a short sale or deed in lieu of foreclosure transaction.

Reinstating Your Mortgage Loan Before Foreclosure in New York

New York law provides that the homeowner may reinstate the loan at any time before final judgment. The homeowner can also pay the arrearage after judgment but before the sale, and the proceedings will be stayed (postponed). If the homeowner subsequently defaults, then the court can order enforcement of the judgment. (N.Y. Real Prop. Acts. Law § 1341 (2025).)

Does New York Have a Redemption Period After Foreclosure?

One way to stop a foreclosure is by "redeeming" the property. To redeem, you must pay the loan's full amount before the foreclosure sale.

Some states also provide foreclosed borrowers a redemption period after the foreclosure sale, during which they can buy back the home. New York law, however, doesn't provide a redemption period for foreclosed homeowners after the sale. (N.Y. Real Prop. Acts. Law § 1353 (2025).) (The statute requires conveyance to the purchaser after the sale.)

Filing for Bankruptcy to Stop Foreclosure in New York

If you're facing a foreclosure, filing for bankruptcy might help. If a foreclosure sale is scheduled to occur in the next day or so, the best way to stop the sale immediately is by filing for bankruptcy. Once you file for bankruptcy, something called an "automatic stay" goes into effect. The stay functions as an injunction prohibiting the lender from foreclosing on your home or trying to collect its debt, at least temporarily.

In many cases, filing for Chapter 7 bankruptcy can delay the foreclosure by a matter of months. Or, if you want to save your home, filing for Chapter 13 bankruptcy might be the answer. To find out the options available, speak with a local bankruptcy attorney.

What Is a Deficiency Judgment in a Foreclosure?

The borrower's total mortgage debt sometimes exceeds the foreclosure sale price in a foreclosure. The difference between the total debt and the sale price is called a "deficiency." For example, say the total debt owed is $600,000, but the home sells for $550,000 at the foreclosure sale. The deficiency is $50,000.

In some states, the lender can seek a personal judgment against the debtor to recover the deficiency. Generally, once the lender gets a deficiency judgment, the lender may collect this amount—in our example, $50,000—from the borrower.

New York generally allows deficiency judgments.

Can a Lender Get a Deficiency Judgment in New York?

In New York, a deficiency judgment is allowed if a homeowner is personally served or appears in the lawsuit. The amount of the deficiency is the amount of the debt less the higher of:

• the fair market value, or
• the sales price. (N.Y. Real Prop. Acts. Law § 1371 (2025).)

To get the deficiency judgment, the lender must make a motion with the court within 90 days of the consummation of the sale. (The sale is consummated when the deed is delivered to the purchaser.) (N.Y. Real Prop. Acts. Law § 1371 (2025).)

What Is the Foreclosure Abuse Prevention Act in New York?

In New York, the Foreclosure Abuse Prevention Act (S5473) significantly limited the circumstances under which the statute of limitations for a mortgage foreclosure case may be reset or extended.

Under this law, a lender's voluntary discontinuance of an action to foreclose a mortgage, voluntary dismissal of a foreclosure action, or de-acceleration letter doesn't stop the six-year statute of limitations period from running. So, in most cases, a lender is time-barred from foreclosing a mortgage after six years from the first date it accelerates the loan. (However, the terms of a mortgage workout agreement, such as a loan modification, might require the borrower to agree to reset and extend the limitations period.)

The law took effect on December 30, 2022, and applies retroactively to any pending foreclosure action filed before that date for which a final judgment and order of sale had not been enforced.

What Are the Potential Consequences of Foreclosure?

A foreclosure could result in serious consequences, like lower credit scores, a deficiency judgment (as mentioned), or tax ramifications.

Getting Legal Help to Avoid Foreclosure in New York

If you're facing foreclosure in New York, the Homeowner Protection Program (HOPP) offers free support. Call 855-466-3456 to connect with a HUD-approved housing counselor or a nonprofit legal service provider in your area. These professionals can explain your foreclosure options, help you apply for mortgage relief, and guide you through the legal process, all at no cost to you. You can also visit the New York State Department of Financial Services website for more information and resources tailored to homeowners at risk of foreclosure.

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