- 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.
