New York

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

In New York , lenders may foreclose on deeds of trusts or mortgages  in default using either a judicial or non-judicial foreclosure process.

Judicial Foreclosure

The 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.

Typically the foreclosure 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, it  is rarely used by lenders.

More information  on New York foreclosure laws.

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