New York is a judicial foreclosure state, meaning that the lender cannot force eviction and regain ownership of the property without filing a lawsuit in court. For a foreclosure to be considered valid and legal, each stage must be handled with due diligence.
Hence, foreclosure notices must be delivered efficiently to the delinquent borrower. If a borrower is not properly served a Summons and Complaint, the court may dismiss the case entirely. Hiring a foreclosure process server is the best way to ensure legal papers are delivered promptly and accurately.
Steps in a New York foreclosure case
Step 1: Pre-foreclosure
Most mortgage contracts in New York include a breach clause that requires lenders to send a notice of demand before filing for foreclosure. Notices of breach typically provide delinquent borrowers 30 days to settle missed payments and any applicable late fees.
Apart from the breach clause, New York state law also requires lenders to send an additional 90-day foreclosure notice before the case can proceed to court. The pre-foreclosure notice must include the following details:
- the outstanding balance
- the mortgage servicer’s contact information
- number of days the mortgage has been in default
- a minimum of five government-approved non-profit housing counseling agencies that provide free or low-income housing in the borrower’s area.
If the borrower still has not paid their debt, the lender may officially trigger a lawsuit. Borrowers have 20 days to respond to a summons and complaint if the papers were delivered personally, and 30 days if the process service was completed through other methods.
Step 2: Settlement
All owner-occupied or residential foreclosure proceedings may be settled through a court-mandated settlement conference. Matters concerning the initial and outstanding loan amount, the up-to-date balance, the borrower’s financial status, and the reasons for defaulting will be discussed during the conference.
If the parties reach an agreement, the lender is legally required to discontinue the lawsuit.
Step 3: Judgment
If the borrower failed to respond to court summons, the court may rule out a default judgement, which results in the defendant’s automatic loss.
If the settlement conference proved unsuccessful, the lender may file for summary judgement or let the case proceed to trial.
Step 4: Foreclosure auction
If the defendant loses the trial, the property is put on sale at a public auction which usually takes place at the County Courthouse.
New York state law allows reinstatement if a delinquent borrower settles all due payments before the date of sale, even after a non-favorable court decision. However, once the property is sold, the defendant loses the right to regain ownership even by settling all liabilities.
Step 5: Eviction
The foreclosed property may be vacated through a cash-for-keys agreement in which the former owner voluntarily leaves the premises in exchange for cash. Otherwise, the new owner will most likely pursue eviction through the Housing Court. In this approach, the former owner is given a 10-day notice to leave.
Reliable process servers in New York
As one of the leading process servers in New York, you can rely on us to serve even the most evasive defendants expediently and without error. We’ll ensure documents are delivered in compliance with the law for a credible and undisputed foreclosure case.
Request a quote or contact us to know more about our services.