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Figuring Out New York Foreclosures

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By : Karim El Sheikh    99 or more times read
Before getting into the foreclosure business, you have to make sure that you are familiar with the ins-and-outs of foreclosure laws since they vary from state to state. Not only that, they will directly affect everything from buying foreclosed homes, short sale options and even tax sales. State laws govern everything from preforeclosure to closing a sale and knowing the letter of the law can make a difference between finalizing a sale and losing your investment.

Warning Not Required

In New York, for example, its foreclosure process is strictly judicial with no non-judicial sales taking place through county or sheriff offices. Lenders are not required to send a warning of impending foreclosure to the borrower in the state of New York, for example. But given the length of the processes needed such as sending late notices, notices of default and more, most mortgage holders are aware of the state of their loans before it reaches this point.

Judicial Foreclosures

Lenders must file their suits in the court system against the borrower. They must also obtain a decree of sale from the correct court (usually the one where the property is located in) before they can initiate a foreclosure.

Mortgage owners in default are required to appear before the court to respond. In the event that they do not or do not send an authorized representative, the court can rule against the mortgage holder in absentia. In the event that they do, a set period of time is given to the borrower to pay back the costs and amount before property is sold by the county or a referee. Otherwise the court will rule against the borrower and declare them in default.

Foreclosure proceedings normally take place within 120 days, although periods of up to 445 days have been noted. Proceedings can take up to nine months in some cases, which can result in additional expenses for the lender and the borrower.

In Case of Sale

If the property is foreclosed and put up for sale, a notice of sale must be published in a general circulation publication at least once a week before the sale occurs. Normally foreclosed homes and properties are sold to the highest bidders, which can include the lender. In the event of sale, the property must be paid in full within 30 days. Unlike other states, borrowers cannot redeem their properties through right of redemption once the sale is finalized.

Any purchasers must file a report of sale with the court clerk within 30 days after the sale has been completed and the deed executed or the sale may be considered null and void.

Non-Judicial Foreclosures

Non-judicial foreclosures are rarely used by lenders in the state of New York. In the event that it is, a power of sale clause must exist in the trust or mortgage agreement. Without it, the owner/borrower cannot pre-authorize a sale to pay off a balance in the event of a default. Usually this power reverts to the lender or trustee of the estate.

A little knowledge of how the laws work in New York can help you avoid foreclosures or make a little money investing in New York foreclosed homes.
Foreclosed homes are in every city. Search for all foreclosures in your area.

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