New York foreclosures are handled quite differently than most states. It is very important to know the laws of foreclosure in your own state.

How does New York Foreclosures differ from many other states?

There are judicial and non-judicial foreclosures.

In short, most states use the non-judicial approach. This means that because properties are held by a deed of trust, the foreclosure process does not include the State Courts. A foreclosure is handled at the County level by the Trustee Sales that is arranged by the lender. So, foreclosures in "trust states" take quite a bit less time than judicial foreclosures. In fact, a foreclosure in a "trust state" can take as little as 104 days from the time between a Lis Pendens (notice of mortgage default) and the Foreclosure Auction.

Properties in New York are secured through mortgages instead of deeds of trust. Foreclosures in New York are considered to be judicial foreclosures because the foreclosure proceedings must go through the courts before a property can be sold at a public auction. Because proceedings must go through the courts, it takes about 12 to 18 months after a Lis Pendens has been filed and the property hits the auction block. The reason it takes so long is because all people involved, (including mortgage holder, creditors, tenants of the owner, etc.) have to be served with papers.

Eleven Judicial Foreclosure States

? New York


? Maine


? Connecticut


? New Jersey


? Pennsylvania


? Ohio


? Indiana


? South Carolina


? Florida


? Louisiana


? North Dakota

Now that we are familiar with the differences between judicial and non-judicial foreclosure states, it is important to know the process of a judicial foreclosure. The following are steps that will be taken prior to and after a foreclosure in the state of New York.

What happens before a foreclosure process is put into action?

? The lender may send a warning of impending foreclosure to the borrower. PLEASE NOTE - although this may be done as a courtesy to you, it is NOT a requirement in New York.

? The lender files suit against the borrower for the amount in default.

? The borrower is then notified of the foreclosure proceedings and it required by law to appear in court. At this point, a lis pendens (notice of pending lawsuit) is recorded.

? If the borrower does not appear in court, the court will rule against the borrower, thus allowing the foreclosure sale.

? If the borrower appears in court, the court will consider the case before ruling. If the court rules against the borrower, the foreclosure sale will be scheduled. This will usually take 7 - 9 months.

What happens once a foreclosure has been scheduled?

? The date of sale will usually be scheduled at least 4 months after the court ruling.

? The notice of sale has to be published in the local newspaper once a week for at least 4 weeks before the sale.

? In New York, the foreclosure sales are made by public auction at the county courthouse. The highest bidder will receive the property. Anyone can bid, including the lender.

? The winning bidder will usually have to pay ten percent of the final bid at the sale, and the remaining balance is due within 30 days.

? Once the property is paid in full, the winning bidder takes ownership of the property.

? The borrower will have no rights of redemption after the sale.

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