Can the lender come after you for the rest? Deficiency judgments in New York

Deficiency rules in New York, point by point

• Who can be held liable

  Only people named and served in the foreclosure

  The court can order a deficiency only against someone liable for the debt who was made a defendant and either appeared in the case or was personally served. If you were not properly brought into the case, raise that right away.

  N.Y. RPAPL § 1371(1)

• The 90-day motion deadline

  Within 90 days after the referee's deed is delivered

  The lender must make a motion for a deficiency judgment, with notice to you, within 90 days after the sale is completed by delivery of the deed. New York appeals courts treat that 90 days like a statute of limitations.

  N.Y. RPAPL § 1371(2)

• Fair market value or sale price, whichever is higher

  At the deficiency motion

  The court decides the home's fair market value as of the auction date. The deficiency is the debt, interest, prior liens and costs minus the higher of that value or the sale price, so you can bring an appraisal or sales of similar homes to push the number down.

  N.Y. RPAPL § 1371(2)

• No timely motion means the debt is paid

  Day 91 after the deed is delivered

  If no deficiency motion is made in time, the sale proceeds, whatever the amount, are deemed full satisfaction of the mortgage debt, and no deficiency can be recovered later in any other case.

  N.Y. RPAPL § 1371(3)

• Short sale or deed in lieu

  Before you sign

  The 90-day rule above applies to foreclosure sales. For a short sale or deed in lieu, make sure the agreement itself says in writing that the lender waives any remaining balance, and ask a housing counselor or lawyer to check it before you sign. Both options can be discussed at the mandatory settlement conference.

  CPLR 3408(a)

• How a deficiency judgment is collected

  A money judgment is presumed paid after 20 years

  An income execution can take up to 10 percent of your income, and no more than 25 percent of disposable earnings in any week. Nothing can be taken from weekly disposable earnings unless they are above 30 times the higher of the federal or state minimum hourly wage.

  CPLR 5231; CPLR 211(b)

• If you get a deficiency motion

  Before the motion's return date

  Check whether the motion was made within 90 days of the deed and whether you were served or appeared in the case. File opposition with your own value evidence, and get help from legal services or a free housing counselor through homeownerhelpny.org.

  N.Y. RPAPL § 1371

The short answer in New York

Common questions in New York