How foreclosure works in New York

The notices you will receive in New York, in order

1. 90-Day Pre-Foreclosure Notice

   Mailed by the lender or servicer at least 90 days before it files a lawsuit

   It is headed 'YOU MAY BE AT RISK OF FORECLOSURE' and must come by certified or registered mail and by regular mail, in its own envelope. It lists at least five housing counseling agencies in your county. Call one right away; this is your best window to work something out before a court case starts.

   N.Y. RPAPL § 1304

2. Summons and Complaint

   Delivered after the 90 days run out and, under federal rules, generally after you are more than 120 days behind

   This starts the lawsuit. The summons carries a notice headed 'YOU ARE IN DANGER OF LOSING YOUR HOME' and warns that sending a payment will not stop the case. You must answer in 20 days if the papers were handed to you, or 30 days if served another way.

   N.Y. RPAPL § 1320; CPLR 320(a)

3. Help for Homeowners in Foreclosure notice

   Delivered with the summons and complaint

   This notice is on colored paper, separate from the lawsuit papers. It says you do not have to leave your home until a sale, that you must keep taking care of the property, and that you should beware of anyone who wants a fee or your deed to 'save' your home. If it was not served, that can be a defense.

   N.Y. RPAPL § 1303

4. Notice of Pendency (lis pendens)

   Filed by the lender with the court when the case starts

   This is a public notice that a lawsuit about your property is pending. It does not mean you have lost the home or must move. After a settlement or modification is signed, the lender must cancel it within 90 days.

   N.Y. CPLR 3408(g)

5. Settlement conference notice

   Mailed by the court; the conference is within 60 days after the lender files proof of service

   If the home is a 1 to 4 unit residence you live in, the court must hold a settlement conference to look at options like a loan modification, short sale or deed in lieu. Go even if you are not ready. You still need to answer the complaint, but going to the first conference gives you 30 more days to do it.

   N.Y. CPLR 3408

6. Order of Reference and Judgment of Foreclosure and Sale

   Signed by the judge after a default, a summary judgment motion or a trial

   The order of reference sends the case to a referee to add up what you owe. The judgment then orders the home sold within 90 days and must list your servicer's name and phone number. If you never answered or filed a notice of appearance, the lender does not have to tell you about the auction.

   N.Y. RPAPL § 1351

7. Notice of Sale

   Published in a local newspaper, usually once a week for 4 weeks before the auction

   This announces the date, time and place of the auction, which is usually held at the courthouse by a referee or the sheriff. Up until the sale, you can still stop it by paying what is owed or by asking the judge to stay it.

   N.Y. RPAPL § 231

The legal steps in New York

1. Missed payments and the 90-day notice

   Under federal rules, your servicer generally cannot start a foreclosure until you are more than 120 days behind. New York adds its own rule: at least 90 days before suing, the lender must mail you a notice headed 'YOU MAY BE AT RISK OF FORECLOSURE' with a list of at least five housing counseling agencies near you. Call one of them right away.

   N.Y. RPAPL § 1304; 12 C.F.R. § 1024.41(f)

2. The lender files a lawsuit

   The lender files a summons and complaint in Supreme Court and a notice of pendency (lis pendens) on your property. With the papers you must get a separate colored notice called 'Help for Homeowners in Foreclosure.' It tells you that you can stay in your home until a sale and warns you about rescue scams.

   N.Y. RPAPL §§ 1303, 1320

3. Answer the complaint in 20 or 30 days

   You have 20 days to answer if the papers were handed to you, or 30 days if they were served another way. Your written answer lists your defenses, such as a missing or defective 90-day notice. The courts' free Foreclosure Answer Program can help you make one.

   N.Y. CPLR 320(a)

4. Mandatory settlement conference

   If the home is your residence and has 1 to 4 units, the court must hold a settlement conference within 60 days after the lender files proof of service. Both sides must negotiate in good faith about options like a loan modification. If you missed the answer deadline but go to the first conference, you get 30 more days to answer.

   N.Y. CPLR 3408

5. Judgment of foreclosure and sale

   If the case does not settle, the lender can win by default, on a summary judgment motion, or at trial. A referee first adds up what you owe, and then the judge signs a judgment of foreclosure and sale. The judgment must list the servicer's name and phone number.

   N.Y. RPAPL § 1351

6. Notice of sale and the auction

   The sale must be held within 90 days of the judgment. Notice is published in a local newspaper, usually once a week for 4 weeks. A referee or the sheriff sells the home at the courthouse to the highest bidder. You can still stop the sale by paying what is owed before the auction.

   N.Y. RPAPL §§ 231, 1351

7. Moving out

   Once the deed is delivered to the buyer, you no longer own the home. If you are still there, the new owner must show you the deed, serve a 10-day notice to quit, and win an eviction case in court. An officer must give at least 14 days' written notice before carrying out the eviction warrant. Ask the court about surplus money from the sale.

   N.Y. RPAPL §§ 713(5), 749

Common questions in New York