You purchased your dream home in the state of New York and everything started out just as you had imagined it. But you were suddenly forced to take a pay cut at work and your spouse was suddenly put into a position where they needed to find a new job. For the first time since you bought your home, your mortgage payments are in jeopardy. This is a good time to get familiar with the foreclosure laws in New York.
Most mortgage lenders in New York State have a 10 to 15-day grace period for your payment every month. If you make your payment on or prior to the grace deadline, then you won't accrue any late fees and your credit will not get affected.
If you start to get a month or two behind, then look for your lender to start sending letters and making phone calls to get your attention. You should always pick up the phone because working with your lender is always better than allowing the situation to grow.
If you have not contacted your lender about your late payments, then your lender can start a pre-foreclosure process when your payment goes 120 days late. This is an official process where your lender puts you on notice of potential foreclosure and informs you of your options.
The lender must send you an official notice of foreclosure 90 days prior to starting the motion. The date of the notice is the starting date and the property owner has 90 days to either bring the mortgage current with the lender, or making other arrangements within the structure of the mortgage and federal and state laws.
When the 90-day notice expires, the lender files an official foreclosure notice in court. The owner has 20 days to respond to the notice. Once again, the owner can still approach the lender about bringing the mortgage up to date or making other arrangements.
If the homeowner does not respond within the 20 days, then the courts have 60 days to issue a notice of a settlement conference. This is where the owner and the lender meet to see if they can come to some sort of agreement on how to settle the account.
If the two sides cannot find a settlement through the court-mandated conference, then the lender will ask the courts to issue a default judgment. This means that the owner has defaulted on their mortgage and the lender wants to take the necessary steps to seize the property and sell it. However, the owner can put off the default judgment by responding to the court motion with a potential plan for bringing the mortgage to current.
As you can see, there are plenty of laws in place to protect homeowners in New York State from a fast foreclosure. Your lender would rather work with you to come up with a way of bringing the mortgage current than having to go through the expense and unpredictability of foreclosure.